In 2018, the BC provincial government announced a $1.9 billion tax hit over 75,000 businesses that was implemented on on January 1, 2019. This tax is known as the Employer Health Tax (EHT).
To replace lost revenues from the elimination of Medical Service Plan (MSP) premiums, the BC government introduced the EHT. The new tax imposes an additional cost for employers of up to 1.95 per cent on total payroll. Businesses with payroll under $500,000 are exempt from paying the tax.
As currently structured, the EHT is not business-friendly. This tax came as a brand new costs for many businesses, and we understand your serious concern for the tax.
This is why since day one, we have opposed it. Despite our warning and opposition, the province introduced the tax. At the very least, the provincial government needs to change the structure of the tax to be more business friendly. Check out or research report in the box below to learn more on how we're fighting for the tax to be reformed.
Our EHT Research Report
In June 2019 we released our new report, The Employer Health Tax: Room for Remedy, as business owners geared up to pay their first bill on June 15 for the new $2 billion Employer Health Tax (EHT).
In our report, we recommend the BC government to:
- Increase the small business exemption (e.g. from $500,000 to at least $1.25 million);
- Ensure the tax is fully graduated (i.e. keep the tax calculation the same at all payroll thresholds: 1.95% X [payroll - $500,000], and apply the small business exemption to all payroll thresholds);
- Create a more even split on revenue replacement between businesses and individuals, such that businesses are not having to absorb the majority of the cost to replace MSP revenues;
- For a full list of recommendations, see here.