BC EMPLOYER HEALTH TAX CHANGES
Employer Health Tax
British Columbia’s NDP Government has implemented an Employer Health Tax (EHT) effective January 1, 2019. The EHT is in conjunction with the elimination of the Medical Services Plan premiums (MSPP) effective January 1, 2020.
The EHT will be calculated as follows:
Employers with B.C. remuneration:
- Of $500,000 or less don’t pay employer health tax
- Between $500,000.01 and $1,500,000 pay the reduced tax amount as calculated:
- 2.925% x (B.C. remuneration - $500,000)
- Greater than $1,500,000 pay the tax on their total B.C. remuneration as calculated:
- 1.95% x total B.C. Remuneration
If you are associated with other employers, you must share the $500,000 exemption. If you begin or cease to have a permanent establishment in B.C. during the calendar year, the exemption amount is prorated. The exemption amount is $1,500,000 per calendar year for registered charitable and non-profit employers. For all other employers the exemption amount is $500,000 per calendar year.
The EHT is separate and distinct from remitting source deductions or MSP premiums and as such you will be required to register and open a new account with the Provincial Government. Employers with B.C. remuneration above the exemption amount in a calendar year must register for the EHT.
If the lesser of your 2018 actual B.C. remuneration and estimated 2019 B.C. remuneration is $600,000 or more you will be required to register by May 15, 2019 and to make quarterly instalments commencing June 15, 2019. If your B.C. remuneration is more than $500,000 but less than $600,000 you are not required to make instalments, but you must register by December 31, 2019.
The first EHT return must be filed by March 31, 2020 for the year ended December 31, 2019. If Lee and Sharpe will be assisting you with your 2018 T4 reporting, we will contact you to arrange registration and instalments, if required.
Please do not hesitate to contact us if you have questions.
All the best,
Lee & Sharpe