Nova Scotia Business Inc. (NSBI) has approved an amendment to the existing IBM business development incentive agreement, which began in November 2012.
Four years into its eight-year payroll rebate agreement IBM is ahead of its plan to create 500 positions.
With the amended agreement the company is projected to create up to 250 more jobs in the province, for a total of 750 jobs over the eight-year span of the agreement.
From its growing Nova Scotia client innovation centre IBM serves more than 30 clients around the world. Nova Scotia employees work on projects such as helping design the cognitive car of the future and helping sports teams evaluate player and team performance.
Today 50 per cent of IBM’s Nova Scotia employees are recent graduates from local educational institutions and young professionals.
The amendment includes an agreed-upon focus of continued hiring of new graduates and new Nova Scotians, as well as higher agreed-upon average salaries required to earn a rebate.
Based on the new maximum growth forecast of the amended eight-year payroll rebate agreement, NSBI estimates IBM would spend a total of $251,397,422 in salaries and benefits. These IBM employees would pay direct taxes of approximately $29,264,000. As a result, over the amended eight-year agreement, IBM would be eligible to earn up to $22,633,683 through the payroll rebate, including this new extension.
IBM would be eligible for a smaller rebate if it creates fewer than 750 jobs.
Quick facts:
— Prior to this amendment, the 2012 payroll rebate agreement with IBM was for eight years, up to 500 jobs, and an incentive capped at $12.2 million
— With this amendment, average salaries are to increase from $50,000 to $73,500
— Payroll rebates are designed in a way that the tax revenue generated for the province by the new jobs in Nova Scotia is always more than the amount spent on the rebate
— Payroll rebates are only paid after a business has generated actual payroll for the Nova Scotia economy
— for every dollar a company spends on the new jobs, it receives between five and 10 cents back
— when a company submits an annual rebate claim, it must send NSBI audited information that confirms the number of jobs it created that year
— payroll rebates are paid through the Strategic Investment Funds.
Information on NSBI transactions can be found at http://www.novascotiabusiness.com/fundingdisclosures.
Source: Release