The BC Employer Health Tax
2019 will see a new tax in British Columbia, the Employer Health Tax (EHT). This new tax will, by 2020, replace MSP premiums, thereby shifting the burden for medical premiums from the employee to the employer. For the employer, the EHT will be a tax-deductible expense.
Relief for small employers
Those small employers with annual payrolls of $500,000.00 or less will not pay any tax. Employers with payrolls from $500,000.01 to $1,500,000.00 will pay a rate of tax of 2.925% on their annual payroll over $500,000.00. Employers with over $1,500,000.00 in annual payroll will pay 1.95% on their entire payroll.
Associated employers must combine all their payrolls to determine the rate that should be used. That is, the $500,000.00 exemption will apply to the entire payroll of the associated employers.
To find out whether or not employers are associated, refer to the Government of BC’s official site:
To calculate the annual EHT:
| Condition | Calculation |
| Annual payroll of $500,000.00 or less | $0.00 |
| Annual payroll more than $500,000.00 up to $1,500,000.00 | (annual payroll – $500,000.00) x 2.925% |
| Annual payroll > $1,500,000.00 | annual payroll x 1.95% |
For employers who do not wish to make the calculation themselves, there is an “employer health tax calculator” on the Government of BC’s website:
https://forms.gov.bc.ca/taxes/employer-health-tax-calculator/#gf_41
Employers with annual payrolls of $500,000.00 or less do not have to register.
Employers with annual payrolls between $500,000.01 and $600,000.00 will pay taxes of $2,925.00 or less and will have to register by December 31, 2019. Those employers must file and pay their first return by March 31, 2020.
Employers with annual payrolls over $600,000 have to register by May 15, 2019 and must make their first quarterly instalment by June 15, 2019. The last instalment payment for the 2019 payroll is due March 31, 2020.
MSP premiums will be eliminated by January 1, 2020.
© 2019 Pelar Davidson
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