Liability for tax

(a) Every employer required under the Income Tax Act to deduct and withhold tax from the wages of an employee is liable for the payment of such tax whether or not it is collected from the employee. If, for example, an employer deducts less than the correct amount of the tax, or fails to deduct any part of the tax, such employer is nevertheless liable for the correct amount of the tax.

(b) If an employer fails to deduct and withhold the tax as required under the Income Tax Act, and thereafter the income tax against which the withheld tax may be credited is paid by the employee, the employer shall not be liable for the withholding tax. However, despite such payment of the withholding tax, such employer shall still be liable for any penalties and interest (which shall accrue from the time at which the tax was required to be paid over to the department until the time at which the tax is paid either by the employee or by the employer) otherwise attributable to the employer's failure to deduct and withhold. Such employer shall not be relieved of liability for the payment of the tax required to be withheld unless the employer can prove that the tax has been paid.