Payroll Penalties and Interest

Employers have a variety of obligations under The Workers Compensation Act. To ensure the compensation system works smoothly and efficiently it’s important that employers fulfill these obligations. To respond to cases where an employer fails to comply with their responsibilities, the Act includes provisions for both fines and penalties. 

The following administrative penalties can be charged by the WCB for infractions related to payroll reporting:

Name of Penalty

Infraction

Amount of Penalty

Late Filing Penalty

WCB does not receive required payroll information by the due date.

5% of current year's premiums up to a maximum of $5,000.

Non-Filing Penalty

WCB does not receive required payroll information.

10% of current year's premiums up to a maximum of $5,000.

Under-Reporting Actual Payroll

WCB audit has revealed a substantial under-reporting of actual payroll figures.

15% of the difference in premium between the audited and actual payroll up to a maximum of $5,000

 

Interest

The WCB may also charge or pay interest on accounts where there is a difference of more than 25% between your business' under or overstated payroll estimate and the actual payroll submitted. 

Interest may be added if you underestimate your payroll amount. The WCB compares your 2020 estimated payroll to your 2020 actual payroll as of June 30 and December 31. For the June 30 timeframe, the interest rate is 3.52 %. For the December 31 timeframe, the interest rate is 2.76%.

Interest may be paid if you overestimate your payroll amount. The WCB compares your 2020 estimated payroll to your 2020 actual payroll as of June 30 and December 31. For both timeframes, the interest rate is 0.25%.

Please note, interest on inaccurate payroll estimates will not be charged or owing if:

  • The charge amounts to less $50 for the year; or
  • The credit is less than $10.
     

Related Fact Sheets and Publications

 

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