Will you be impacted by the new Employer Health Tax in B.C.?
This is a question that all employers should be asking beginning in January 2019. The new Employer Health Tax applies to both incorporated and non-incorporated businesses as well as not-for-profits, charities and municipalities.
A business with over $500,000 in annual wages to employees will be subject to the new tax. Employers will need to review their 2018 T4 summary; if the total wages and taxable benefits paid to employees (Box 14 on the 2018 T4 summary) is over $500,000, they must register and pay the tax. Charities and non-profit organizations are exempt unless their wages are in excess of $1.5 million.
The new tax is 2.9% on wages between $500,000 and $1.5 million and 1.95% on employers with wages in excess of $1.5 million.
MSP premiums will continue to be payable on all individuals during 2019, even if the individual works for an employer that will be paying the Employer Health Tax.
Businesses that are required to pay the tax can register beginning in early January 2019. Any employer with wages in excess of $600,000 will need to remit instalments on the tax during 2019.
For more information and to register for the tax, please see the B.C. government website.
If you have questions or need help with the new Employer Health Tax, please contact us at 250-426-1976. We offer a complete range of corporate accounting services.