B.C. Employer Health Tax: what you need to know

Payroll (also known as remuneration) is employment income and taxable benefits under the Income Tax Act (Canada) and includes:

• Salary and wages
• Advances in salary and wages
• Payments for casual labour
• Bonuses, commissions and other similar payments
• Vacation payments
• Gratuities or tips paid through an employer
• Taxable allowances and benefits
• Directors’ fees paid to directors of corporations
• Amounts paid by an employer to top up benefits (e.g. top up for maternity or paternity leave)
• Stock option benefits
• Employer-paid contributions to an employee’s Registered Retirement Savings Plan
• Employer-paid group life insurance premiums

Employer paid contributions or premiums that are not subject to the employer health tax:

• Registered pension plan contributions
• Private health services plan (i.e., extended health) contributions
• Supplementary unemployment benefit plan contributions
• Deferred profit sharing plan contributions
• Retirement compensation arrangement contributions

Additionally, pension, annuity or superannuation payments paid by an employer to a retired employee are not included within payroll.

*The EHT is only levied on employee remuneration, therefore payments made to independent contractors will not be liable to EHT.

Employers with B.C. payroll greater than $500,000 will be required to file and pay employer health tax online. Charities and non-profit employers with a payroll over $1,500,000 (per location) will also have to register online. Registration for filing and paying employer health tax will start in January 2019.  You can register and find more information here.

Instalment Payments

If your employer health tax in the previous calendar year exceeded $2,925 (e.g. employers with B.C. payroll over $600,000 OR charities and non-profit employers with B.C. payroll over $1,600,000), instalment payments are required in the 2019 calendar year. The previous year’s tax is considered the amount of tax that would have been payable if the employer health tax were in force January 1, 2018.

If you fall under this category, you must make quarterly instalment payments based on the lesser of:

• 25% of the previous year’s tax, or
• 25% of the current year’s estimated tax

The instalment payment due dates are:

• June 15
• September 15
• December 15
• March 31 – Final payment with return

What is required for registration?

To register, all applicants will require the following information:

• Your federal business number (BN)
• A mailing address and business location address (if different)
• Permanent Establishment date
• Your incorporation number and date, if your business is incorporated

Some applicants will require additional documentation:

• Registered Charity
• Registered Charity Number
• Incorporated outside of B.C.
• A copy of your incorporation documents
• Partnership
• A copy of your partnership agreement

You can bay online using eTax BC, or us a bank or financial institution. The three ways you can make a payment through your bank or financial institution are:

1. Electronic funds transfer
2. Bill payment service
3. Wire transfer