Fairtax is an industry leader in obtaining government funding in Canada. Our dedicated team of Funding Specialists understands the intricacies of government grant and incentive programs, optimally positioning your organization to secure government funding. We cut through the confusion, uncovering the specific financial resources that allow you to focus on growing through innovation, training employees, and taking your operations to the next level.
Business Development Incentive – Payroll Rebate
The Business Development Incentive – Payroll Rebate (BDIPR) is a return on a company’s eligible gross payroll. It is issued over a set number of years – usually between three and five – and to a set amount. This means that for every dollar a company spends in salaries and benefits, NSBI rebates back a negotiated percentage.
The payroll rebate agreement includes performance targets that a company must achieve in order to receive the rebate, including:
- Number of new positions created
- Average annual salary
The Program supports companies in knowledge-based industries that have a high probability of sustainable growth. It focuses on three targeted sectors:
- Financial Services and Insurance
- Information Technology
- Defence, Security, and Aerospace
Investments are made in profitable companies with strong management and a proven track record of success. In most cases, recipients must agree to create at least 20 full-time positions in NS.
A company must first create a pre-determined number of jobs (based on audited hours) at a minimum average salary in order to be eligible for a rebate. This process ensures that new jobs are created and tax revenue is generated for the province.
Payroll rebates offer a strong financial return for Nova Scotia and they offer a competitive tool to attract new international investment that can help attract new immigrants, create new jobs for graduates, and infuse new skills and knowledge into Nova Scotia’s economy.
- The Nova Scotia Business Inc. (NSBI) receives audited reports on a yearly basis when companies submit a report for payment under the payroll rebate agreement. Once the process is complete, the NSBI provides final payroll rebate numbers
- The performance based payroll rebate is calculated by multiplying the rebate percentage outlined in the agreement by the total gross payroll achieved by the company each year over the term of the agreement. The company is eligible for the payroll rebate provided it has met its average salary and Full Time Equivalent (FTE) minimum targets established in the agreement
- Where a company achieves an average gross salary that is higher than the average gross salary target set out in the agreement, than the payroll rebate amount earned increases accordingly. A payroll rebate agreement sets out maximum targets that caps the amount of payroll rebate a company can earn each year
- In a recently released mandatory performance analysis, NSBI client activity contributed $139.2 million in new provincial tax revenues. Every tax dollar invested via payroll rebates returned $1.54 to the province and taxpayers
- The tax revenue generated by the new jobs created is always higher than the amount paid out by a payroll rebate