The employer health tax is an annual tax on an employer's B.C. Remuneration paid to employees and former employees in a calendar year beginning on January 1, 2019.

Employer Health Tax B.C. Remuneration

The employer health tax is based on the remuneration an employer pays to their employees and applies to employers with B.C. Remuneration.

An employer’s B.C. Remuneration includes the total of the following:

• All remuneration paid to the employer’s employees who report for work at the employer’s permanent establishment in B.C., and
• All remuneration paid to the employer’s employees who do not report for work at a permanent establishment of the employer, but are paid from or through a permanent establishment in B.C.

B.C. Remuneration doesn’t include any remuneration paid to employees who report for work at a permanent establishment of the employer outside B.C. for all or substantially all of the calendar year.

The residence of an employer’s employees is irrelevant in determining whether an employer has B.C. Remuneration.

EHT Calculations

Employers with B.C. Remuneration:

• Of $500,000 (exemption amount) or less don’t pay employer health tax ($1,500,000.00 for Charitable or Non Profit Employers)
• Between $500,000.01 and $1,500,000 (notch rate amount) pay the reduced tax amount as calculated:
  • 2.925% x (B.C. Remuneration - $500,000)
• Greater than $1,500,000 ($4,500,000.00 for Charitable or Non Profit Employers) pay the tax on their total B.C. Remuneration as calculated:
  • 1.95% x total B.C. Remuneration

Part-Year Employers

Employers that either begin or cease to have a permanent establishment in B.C. in a calendar year are required to pro-rate the exemption amount and the notch rate amount as follows:

• To pro-rate the exemption amount:
  • $500,000 x number of days with a permanent establishment in B.C. / 365 days
• To prorate the notch rate amount:
  • $1,500,000 x number of days with a permanent establishment in B.C. / 365 days

Instalment Payments

Do I need to pay my employer health tax in instalments?

You’re required to pay instalments in a calendar year if the employer health tax amount you must pay was greater than $2,925 for the previous calendar year. If the employer health tax amount you must pay is less than $2,925 you can choose to pay in instalments or make one payment when you file your employer health tax return for March 31.

How do I calculate my employer health tax instalments?

If an employer is required to make instalments for a calendar year, instalments are calculated as 25% of the lesser of:

• The employer’s employer health tax payable for the previous calendar year, and
• The employer’s estimated employer health tax payable for the current calendar year.

Note:

An employer that is new to B.C. and starts to have a permanent establishment in B.C. in 2019 or a later calendar year is not required to make instalments for that year.

For example, if an employer starts to have a permanent establishment in B.C. in 2020, the employer will not be required to make instalments for the 2020 year. The employer may be required to make instalments for the 2021 year if the employer’s employer health tax amount is greater than $2,925 for the 2020 calendar year.