Sam Tecle
Associate
Article
Tax season has arrived and BC employers should be aware of the Employer Health Tax (&"EHT"), which the BC provincial government implemented on January 1, 2019. The EHT is an annual payroll tax that is calculated on the remuneration that an employer pays to its current and former BC employees in a calendar year. Despite the provincial government's implementation of the EHT in 2019, this year marks the first year of EHT reconciliation. Qualified employers must file their EHT by March 31, 2020.
Employers that are required to pay the EHT are divided into three categories:
As mentioned above, BC's EHT is calculated on the remuneration that an employer pays to its current and former BC employees in a calendar year. “Remuneration” includes all payments, benefits, or allowances that must be included in an employee's income. An employer's BC remuneration includes the total of:
Importantly, remuneration does not include certain employer paid contributions or premiums, death benefits, retiring allowances or severances, pensions, or annuities paid to retirees. Also, BC remuneration does not apply to employees who report for work at a permanent establishment of the employer outside BC for all or substantially all of the calendar year.
The following breakdown provides the amount of EHT that each type of employer is required to pay:
A for-profit employer with BC remuneration in 2019:
A charitable or non-profit employer with BC remuneration in 2019:
An associated employer: If an employer is associated with other employers and the associated employers' BC remuneration is between $500,000.01 and $1,500,000, each associated employer must share the $500,000 exemption. If the associated employers' combined BC remuneration is greater than $1,500,000, the associated employers are not eligible for the EHT exemption.
Employers that are subject to the EHT should have registered through eTaxBC by December 31, 2019. Registration can take up to 21 days to process, so an employer that is subject to the EHT must create an account to file and pay the EHT for 2019 by March 31, 2020 to avoid a late penalty and interest charges.
For all questions related to BC's Employer Health Tax, a member of the Gowling WLG Employment, Labour and Equalities would be pleased to assist.
Find out more about our Group and how to contact a specific lawyer.
NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.