Employer Health Tax Update

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The Government of BC released its annual budget in February, which included historic investments in affordable housing. The 2018 provincial budget also presented the government’s steps towards eliminating the Medical Services Premiums (MSP) by 2020, and introduced a payroll tax to replace lost tax revenue with the elimination of MSP. The Employer Health Tax (EHT) will come into effect in 2019.

The provincial government released the implementation details of the Employer Health Tax on July 4, 2018. Members will be interested to know that EHT rates for charities and non-profits are different from private sector employers. Charities and non-profits will calculate their EHT based on locations and pay the total of each location’s EHT.

If payroll for a location is less than $1.5 million, the EHT for that location is zero, i.e. the non-profit or charity does not pay EHT for that location. For locations with payrolls over $1.5 million, a sliding percentage scale is used to calculate the tax amount. Please refer to the notice for more detail on how the tax is calculated, and how to file an EHT return. If you have any questions, please contact Marika Albert, Policy Director, by email: marika@bcnpha.ca or by phone: 778-945-2164.

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