Nunavut Minimum Wage 2021

Nunavut Minimum Wage 2021

Written by Corrina Murdoch
Fact-checked by Caitlin Wood
Last Updated November 3, 2021

In order to ensure that workers get paid a fair wage, the government sets a legal minimum threshold which the employer must meet. Adjusting on a provincial and territorial basis, this is to account for the cost of living in the area.  As of 2019, 38,780 people reside in Nunavut, meaning the job market is challenging in this province. It only separated from the Northwest Territories in 1999. While it has grown since this time, it remains the least populated part of the country. 

Relative to other Canadian locations, Nunavut has a more restrictive supply chain due to geographical limitations. It also has less infrastructure, and reduced opportunity for employment within the territorial economy. This raises the cost of goods, and thus the cost of living in Nunavut. As such, a minimum wage must make living affordable for everyone. 

Hourly Minimum Wage Rate In Nunavut

Due to the increase in cost of living, as assessed by the Consumer Price Index, Nunavut saw a massive increase in its minimum wage on April 1, 2020. The hourly minimum increased from $13.00 to $16.00. The wage is reassessed every April, though the results of the assessment, including a potential increase, are not yet available. The $16.00 remains in effect in Nunavut during 2021. 

Who Does It Apply To?

Any employee in the territory of Nunavut is required to receive the minimum wage of $16.00 per hour for all worked hours. There is no age restriction on the minimum wage, meaning it applies across the board, whether the worker is a student or of the age of minority. 

While the minimum wage applies to the vast majority of positions, there are exemptions. This threshold does not apply to trappers or workers at commercial fisheries. If the worker is a student in certain professions, not regulated by the Act legislating the minimum wage, then the worker is exempt. 

In the case of fisheries and trapping, if an employer supplies lodging or board, they are entitled to deduct this from the amount paid. According to the Nunavut government website, sectors including traditional harvesting and fisheries constitute a substantial amount of the economic output of the territory. As such, the minimum wage doesn’t apply to a significant portion of the population. 

Looking for a job? Check out our review of LinkedIn.

History Of The Hourly Minimum Wage Rate In Nunavut

Nunavut is a relatively new independent territory, so its history of minimum wage settings is relatively short. Additionally, since the cost of living across the country has increased at an accelerated rate since the turn of the century, the jumps in the minimum wage are noticeable. 

YearHourly Minimum Wage 
March 3, 2003$8.50
September 5, 2008$10
January 1, 2011$11
March 2, 2016$13
April 1, 2020$16

Overtime Rate In Nunavut

Overtime is determined by a daily and weekly maximum of hours worked. Each day, the employee is entitled to overtime if their time worked exceeds eight hours. The threshold for the week is 40 hours. These are deemed standard work hours and, if they are exceeded, the worker is entitled to overtime. 

Maximum work hours are set as well, in the event the employer requires or allows a worker to go into overtime, there is a cap on the duration. The employee can work a total of ten hours in a day and 60 hours in a week. There are available exceptions to this, depending on the employment situation. To access this exception, however, a permit must be issued by the Labour Standards Officer. 

If the employee enters overtime, the remainder of the hours worked are paid out at 150 percent, meaning the hourly rate is $24.00 per hour. This rate only applies to the hours worked in overtime, and not to the total time worked in the pay period. 

Find out why an employer might want to check your credit.

Holiday Pay In Nunavut

Holidays are termed as any recognized holiday that falls within the worker’s period of employment. Pay for these holidays is determined by the wage of the worker. If they are not working on that day, due to the holiday, then the worker is entitled to a shift’s worth of pay. This is determined by the average of the previous week’s days worked. 

If the employee works during a holiday, then there are two options. The employer can pay the full shift at an overtime rate (1.5 times the wage) or choose to give a holiday at an agreed upon time between the worker and the boss. The day must be taken prior to annual vacation and will constitute a general holiday. It is often called a day in lieu. 

Minimum Wage Deductions

Wage deductions are fairly straightforward, largely because they are standardized across the country. Employers are restricted as to what they can deduct from your pay cheque. 

generally explain what can be deducted from your wages. This is governed under the Labour Standards Act which prohibits an employer from making unjust deductions. It specifies that, if there is a supplemental deduction, it must be authorized in writing by the employee. 

Standard deductions include: 

Canada Pension Plan (CPP) Contributions

The Canada Pension Plan is a federal program into which every Canadian is obligated to pay. The amount of 4.95% of the gross earnings (less $3,500 annually) is taken from every paycheck. Your wage is calculated for an annual amount. From there, $3,500 exempted expense is deducted. You pay 4.95% of the remainder, divided up by paycheque. This funds those currently receiving pensions and is meant to be held for those currently contributing, enabling them access to funds upon retirement. 

Employment Insurance (EI) Premium 

Another essential premium is Employment Insurance into which both the employer and employee pay. The contribution rate is 1.58 percent, to a maximum insurable amount of $56,300. The worker pays a maximum annual contribution of $889.54. 

Income Tax

The next, and easily the most substantial, standard deduction is income tax. This is broken into territorial and federal amounts. The 2021 federal tax rate is at 15% for the first $49,020 earned. A minimum wage job rings in at a gross annual earning of approximately $33,280, meaning it would be taxed at this rate federally. Territorial tax is a separate deduction, also withdrawn from each pay cheque. In Nunavut, during 2021, the first $46,740 is taxed at a rate of 4%. 

Learn more about the tax forms that your employer requires you to fill out.

Other 

Extending from court-ordered garnishees due to alimony to matters of child support or insolvency, any legally valid deduction will be taken from your cheque. It is the legal obligation of the employer to deduct this amount and forward it correctly, pursuant to the court order. 

Minimum Wage Tax Rate In Nunavut: An Example

Let’s say you work the regular 40 hour work week at the minimum wage of $16.00. Assuming there are no holidays during this given week and no overtime worked, this is how the pay would appear:

Gross Pay: $16.00 x 40 hours = $640

Deductions 

CPP: ($16.00 x 40 x 52 = $33,280 annually) 

Subtract the $3,500 exception = $29,780
Divided by 52 weeks to determine weekly deduction = $572.69
$572.69 CPP taxable x CPP rate of 4.95% = $28.34

EI: Rate of 1.58 %

$640 x 1.58 percent = $10.11
This will not exceed the cap for EI, so will remain in force for those on minimum wage.

Federal Income Tax: Rate of 15% for minimum wage, less the $12,421 basic personal amount.

So, taking your annual gross estimate of $33,280 – $12,421 = annual taxable amount of $20,859.  This is then divided into increments, in this case, weekly. 
$20,859 taxable income / 52 pay periods = $401.13 taxable per pay period
$401.13 x 15% = $60.17 Federal Income Tax Deduction

Territorial Income Tax: Rate of 4% for minimum wage, less the basic personal amount of $16, 467. By taking your annual gross pay of $33,280 – $16, 467 = annual territorially taxable amount of $16, 813. As with the federal pay, this is then divided by the payment increments. 

$16,813 taxable income / 52 pay periods = $323.33 taxable amount per pay period. 
$323.33 x 4% = $12.93 Territorial Income Tax Deduction

Gross Pay: $640
Net Pay: $528.93

This assumes that there are no separate garnishees on the account. It also assumes that the employee is paid weekly at minimum wage, without overtime. Any amount that is overpaid during the course of the working year is issued in the form of an income tax refund at the end of the year. 

Nunavut has the lowest territorial income tax, limiting the amount that is deducted from the paycheque. It assists those working on minimum wage above the cost of living. Other ways to bridge the gap caused by the standardized federal amount include the Nunavut Northern Allowance. This can help provide a way to help those bearing the added cost of living in these areas, particularly if the worker relies on minimum wage. 

Final Notes 

Nunavut has the highest minimum wage in Canada as well as the lowest provincial or territorial tax rate. Broken into categories of food, transportation, utilities, leisure, childcare, clothing, and housing, the cost of living in Nunavut is high in each category. It is particularly noticeable in the realm of rental costs, considering a one bedroom in the city runs $2,566 per month. Childcare costs a similar amount on a monthly basis in addition to the higher food prices in the province due to supply chain logistics. 

In order to offer the best possible opportunity for workers, minimum wage is an essential tool. When used in conjunction with the other services available to residents, living in this territory is far easier. Understanding your rights as a worker, including your right to minimum wage, is essential to ensuring that the workforce is properly compensated. This facilitates a strong economy; which, over the long term, has the potential to reduce the cost of living in this area. 


Rating of 5/5 based on 1 vote.

Corrina Murdoch has been a dedicated freelance writer and editor for several years. With an academic background in the sciences and a penchant for mathematics, she seeks to provide readers with accurate, reliable information on important topics. Working as a print journalist for several years, Corrina expanded her reach into the digital sphere to help more people gain insight into the realm of finances. When she's not writing, you can find Corrina swimming and spending time with family.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Save With Loans Canada

Special Offers

Earn An Extra 15% Cash Back

Earn An Extra 15% Cash Back
HOT!

Apply for a Tangerine credit card by December 31, 2021, and earn an extra 15% back (up to $150).*

View Offer
Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Locator
Find The Best Rate
In Your Region
OR
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.