BRITISH COLUMBIA (B.C.) EMPLOYER HEALTH TAX BEGINNING ON JANUARY 1, 2019
Varennes,
Effective January 1, 2019, British Columbia is introducing a new Employer Health Tax (EHT). This tax applies to employers with B.C. remuneration greater than $500,000.00 in a calendar year.
This maestro*EXPRESS presents an overview of the EHT and the guidelines allowing the configuration of the deductions applicable to maestro*. The information is provided for general guidance only; we recommend that you peruse the Government of British Columbia website to validate and stay up to date regarding the details of this new tax.
Employers Subject to the EHT
The EHT only applies to employers with annual B.C. payroll in excess of $500,000 for the remuneration of employees:
- Who report for work to an establishment located in British Columbia; or
- Who are paid from an establishment located in British Columbia.
Remuneration
The remuneration used to calculate the EHT includes all types of employment income, such as salaries and wages, overtime, bonuses, commissions, advances of salaries and wages, vacation pay, holiday pay and many other payments, benefits or allowances. Please refer to inclusions/exclusions listed under the EHT remuneration on the British Columbia government website for further information.
Tax Rate for Most Employers & Employer Registration
An exemption of $500,000.00 is applied for payrolls of less than $1.5 million, with a tax rate of 2.925%. There is no exemption for payrolls over $1.5 million, but the tax rate is lower.
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Employers with B.C. remuneration of $500,000.00 or less |
Exempt and no need to register |
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Employers with B.C. remuneration between $500,000.01 and $600,000.00 |
Pay the reduced tax amount as calculated: 2.925% x (B.C. remuneration - $500,000.00) Need to register by December 31, 2019 |
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Employers with B.C. remuneration between $600,000.01 and $1,500,000.00 |
Pay the reduced tax amount as calculated: 2.925% x (B.C. remuneration - $500,000.00) Need to register by May 15, 2019 |
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Employers with B.C. remuneration greater than $1,500,000.00 |
Pay the tax on their total B.C. remuneration as calculated: 1.950% x total B.C. Remuneration Need to register by May 15, 2019 |
Employers must already be enrolled for access to eTaxBC in order to remit EHT. Once an employer is registered he will receive an employer health tax account number. The employer health tax account number will be displayed in the following format: EHT-1234-5678.
If an employer is already enrolled with eTaxBC, its employer’s health tax account can be added to an existing eTaxBC account logon. If employers have eTaxBC questions they may contact: 1-877-388-4440 (option 1).
Installment Dates
Please refer to the EHT Calculator to find out your payment amounts and remittance dates.
Although the official installment dates are quarterly for employers having a payroll over $600,000.00 the government has advised the CPA that they will accept payments at a greater frequency (e.g. monthly).
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In maestro*, the Government Remittances report (maestro* > Time Management > Payroll > Reports > Government Remittances) includes the amount calculated for this new tax (when all configurations have been made). Employers who choose to pay the EHT on a monthly basis can still use the amount calculated in the report to make their payment. Those who decide to make their installments according to the suggested government remittance dates must not forget to exclude the new EHT deduction from their remittances. |
Payment Options
The following options for payments will be available to the employers on January 7, 2019:
PROCEDURE (FOR MAESTRO*)
A. Identify the annual payroll amount for the year 2018
First, employers must obtain their annual payroll amount for the year 2018.
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maestro* > Time Management > Payroll > Payroll > Miscellaneous Reports |
The total payroll amount shows at the bottom of the report, under the Gross column.
Make sure the Active Year, displayed in the lower right corner of maestro* main window, shows 2018. If already in 2019, change the year temporarily to retrieve the data that applies to year 2018 by clicking on the date.
B. Determine the amount payable for 2019
Use the Employer Health Tax Calculator provided on the B.C. government website to calculate the total amount of EHT to be paid in 2019 based on the total payroll amount for year 2018.
C. Calculate your tax rate
Calculate the tax rate applicable to your business by dividing the amount payable for 2019 (obtained using the EHT Calculator) by the total gross salary estimated amount for year 2018. The resulting rate must be entered into maestro*.
D. Update maestro* Government Tables
Employers must set their tax rate to maestro* Government Tables for year 2019.
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This step must be done in 2019 only, before doing the first payroll of the year. |
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maestro* > Time Management > Maintenance > Payroll > Government Tables |
E. View EHT paid amounts
The amount paid by the employer for the EHT is displayed on each Detailed Payroll List on the line entitled EHT/HSF.
