B.C. Government Releases Details of Proposed Employer Health Tax

The Ministry of Finance has released a tax notice for the proposed Employer Health Tax (EHT) for guidance and informational purposes only. The EHT is subject to legislative approval, and the details of the tax may change. It is anticipated that legislation to implement the EHT will be introduced in the fall of 2018.

The Government announced the proposed EHT in Budget 2018. The Government has also said that it plans to eliminate MSP premiums fully by January 1, 2020.

The proposed EHT is an annual payroll tax that will apply to employers with payroll in British Columbia effective January 1, 2019.

The proposed rate of tax for B.C. payrolls is as follows:

• Employers with a B.C. payroll of $500,000 or less will not pay EHT;
• Employers with a B.C. payroll between $500,000.01 and $1,500,000 will pay the tax as calculated: 2.925% x (Total Payroll – $500,000); and
• Employers with a B.C. payroll greater than $1,500,000 will pay 1.95% on their total BC payroll.

There is a proposal that charitable and non-profit employers will pay a lesser rate of tax.

The EHT is to apply to employees only, and not to contractors.

For more information, please see the Ministry of Finance Employer Health Tax Notice.