The employer health tax (EHT) is being introduced to B.C. effective January 1, 2019, as part of efforts to eliminate MSP premiums. EHT is based on an employer’s B.C. remuneration paid to employees and former employees in a calendar year.
Employers should assess themselves whether EHT is required to pay and the amount of EHT. An online employer health tax calculator1 can be used to estimate the tax.
|B.C. Remuneration paid in a Calendar Year||EHT Amount|
|$ 500,000 or less||–|
|Between $500,000.01 and $ 1,500,000||2.925% x (B.C. remuneration – $500,000)|
|Greater than $ 1,500,000||1.95% x total B.C. remuneration|
- Associated employers share the $ 500,000 exemption if combined B.C. remuneration is no greater than $ 1,500,000. EHT applies association rules under ITA with modifications.
- Part-year employers are required to pro-rate (# of days with a permanent establishment in B.C. / 365 days) the exemption amount ($ 500,000) and the notch rate amount ($ 1,500,000).
Employers with B.C. remuneration greater than $500,000 in a calendar year must register for the EHT using eTaxBC to get an EHT account number.
|Quarterly Instalment||Annual Payment|
|Registration opening date||January 7, 2019|
|Registration due date||May 15, 2019||December 31, 2019|
The following information is required for registration:
- Federal business number
- A mailing address and business location address (if different)
- The date your permanent establishment started in B.C. (if later than December 31, 2017)
- Your incorporation number and date, if your business is incorporated
– Filing and payment
If an employer’ EHT in the previous calendar year exceeded $2,925, you must make quarterly instalment payments based on the lesser of:
- a) 25% of the previous year’s tax, or
- b) 25% of the current year’s estimated tax.
However, if an employer chooses to pay instalments based on 25% of the current year’s estimated tax and the instalments are less than 25% of both the current year’s and the prior year’s actual tax, interest will be charged on the difference.
- Instalment payments are required in 2019. The previous year’s tax is considered the amount of tax that would have been payable if the employer health tax were in force January 1, 2018.
|B.C. Remuneration paid in the Previous Calendar Year||Payment Frequency||Payment Due Date|
|$ 500,000 or less||–||–|
|Between $500,000.01 and $ 600,000*||Annual payment||Mar 31 of the following calendar year|
|Greater than $600,000||Quarterly Instalment||Instalments: June 15, Sept 15 and Dec 15 during the calendar year;
Remaining amount: Mar 31 of the following calendar year
* 2.925% x ($ 600,000 – $ 500,000) = $ 2,925
References and Resources: