Zero Declaration versus Nil Declaration

When an employer does not have to declare wages and payroll taxes for a certain tax period, , they still need to submit a timely payroll tax return. In this case, they can file either a nil declaration or zero declaration. What is the difference between these two declarations?

An employer must always submit a payroll tax return, even if they have no wages or payroll taxes to declare. In this case, they can make either a nil declaration or a zero declaration.
An employer makes a nil declaration when they did not have any employees during the tax return period. In the payroll tax return, they do not enter any employee details. Additionally, they leave the collective section of the return blank or enter ‘0’ in that section.

Employees on payroll but no wage payment

A zero declaration occurs when the employer had employees on payroll during the reporting period but did not make any wage payments. In such cases, the employer still fills out all employee information but enters ‘0’ for wages, withholding taxes, and hours worked. A nil return may occur, for instance, for a director-owner (DGA) with an annual salary. For reporting periods in which the DGA did not receive any wages, the employer submits a nil return. The nil return is also applicable when an employer hires an employee in the middle of a month but pays their first wage in the following month. For the month in which the employee does not receive any wages, the employer files a nil return.

Both employees with wages and without wages

It’s possible that an employer, for a given reporting period, needs to report wages and withholding taxes, but also had employees on the payroll during that period who didn’t receive any wages. These employees still need to be included in the payroll report. The employer fills out all employee information for them, entering ‘0’ for wages, withholding taxes, and hours worked. They also provide the correct insurance indicators. In this situation, it is not a zero declaration.

Conclusion:

• Nil return: The payroll tax return for a specific period in which the employer had no employees on the payroll.
• Zero return: The payroll tax return for a specific reporting period in which the employer had employees on the payroll but did not pay them any wages.

Source: Rendement Online