A New Annual Tax On B.C. Remuneration
Starting January 1, 2019, many employers in B.C. will be responsible for paying a new annual tax on B.C. remuneration (eg. salaries, benefits, commissions, bonuses, vacation pay, etc.) paid to employees and former employees.
Employers in B.C. with remunerations above $500,000 must register for the Employer Health Tax. Those with remunerations between half a million and $1.5 million will pay 2.925% on remunerations above $500,000. If a company’s B.C. remunerations are above $1.5 million, it will pay a tax of 1.95% on all of it.
All companies registering for the tax need to provide the following:
- Mailing address and company address (if different)
- Federal business number (BN)
- Permanent establishment date
Incorporation number and date, if a corporation
Charities and non-profits are also responsible for paying the Employer Health Tax if their B.C. remunerations are above $1.5 million. Between $1.5 million and $4.5 million, charities are taxed at a rate of 2.925% for all B.C. remunerations above $1.5 million. Those with remunerations greater than $4.5 million will pay 1.95% on the entire amount of B.C. remunerations.
Registration for the Employer Health Tax begins on January 7, 2019, and those paying instalments in 2019 – any company whose Employer Health Tax remittances exceed $2,925 annually — must register by May 19, 2019, and pay the first instalment by June 15, 2019. Everyone else must register by December 31, 2019, and pay their first return by March 31, 2020.
“The professional staff at Canwest Accounting can help companies by applying for the tax on their behalf, tracking it, reconciling payments and staying on top of it so companies are compliant,” says Sharlane Bailey, Owner of Canwest Accounting, which has offices in Victoria and Langford. “We can also help by going through accruals so companies know what to expect and budget for the additional tax payment.”
The suggestions and advice provided by Canwest Accounting should not be relied upon in place of professional advice. You are responsible for checking the accuracy of relevant facts and opinions provided.