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Paying unused accumulated sick pay credits | Recovering outstanding source deductions
By Annie Chong
|Canadian Payroll Reporter|Last Updated: 04/25/2019

Paying unused accumulated sick pay credits

QUESTION: We have employees retiring this year and we will be paying out any unused accumulated sick pay credits. How do we treat these monies?

ANSWER: A payment made on termination for accumulated sick pay credits qualifies as a retiring allowance, with specific rules for tax treatment and year-end reporting.