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January 2019

Introduction of a health tax in British Columbia

As announced in last year’s British Columbia budget, a new employer health tax (EHT) was introduced on January 1, 2019. This new tax is meant to fill the gap caused by the reduction in Medical Service Plan (MSP) premiums, which were cut in half in 2018 and will be completely eliminated on January 1, 2020.

This health tax will apply to employers that have a permanent establishment in BC and will be calculated based on the salaries paid to employees working in the province.

Employers

  • If payroll in BC is:
    • $500,000 or less, the EHT does not apply
    • between $500,000.01 and $1,500,000: 2.925% of the payroll in BC in excess of $500,000
    • greater than $1,500,000: 1.95% of the payroll in BC

Charities and non-profit organizations

  • If payroll in BC is:
    • $1,500,000 or less, the EHT does not apply
    • between $1,500,000.01 and $4,500,000: 2.925% of the payroll in BC in excess of $1,500,000
    • greater than $4,500,000: 1.95% of the payroll in BC

The employers concerned must register for the EHT by May 15, 2019.

In 2019, Normandin Beaudry consultants will continue to monitor the matter and will keep you informed of any developments related to the MSP premiums.

Would you like more information?
Contact your Normandin Beaudry consultant or email us.