The New Year is underway, and this is a reminder that the Government of British Columbia took its first steps toward eliminating its resident-paid Medical Service Plan (“MSP”) premiums by introducing its employer-paid “Employer Health Tax” (“EHT”), which is being rolled out gradually in 2019.

Effective January 1, 2019, all non-exempt employers with employees who report for work at or receive remuneration through a permanent establishment of the employer in B.C. must register for and pay EHT installments in 2019. While B.C. residents will continue to pay MSP premiums alongside their employers’ EHT installments for 2019, the MSP premiums will be fully phased-out and EHT installments fully phased-in by January 1, 2020.

Below, we have set out some information and registration deadlines employers need to know.

Who must pay EHT and in what amount?

Employers with B.C. remuneration of greater than $500,000 per calendar year will be required to register for and pay EHT as follows:

  • C. remuneration of $500,000.01 to $1,500,000 pay:
    • 925% x (B.C. Remuneration – $500,000)
  • C. remuneration of greater than $1,500,000 pay:
    • 95% x total B.C. remuneration

Note: Associated employers must share the $500,000 exemption.

Charitable or non-profit employers with B.C. remuneration of greater than $1,500,000 per calendar year will be required to register and pay EHT as follows:

  • C. remuneration of $1,500,000.01 to $4,500,000 pay:
    • 925% x (B.C. remuneration – $1,500,000)
  • C. remuneration of greater than $4,500,000 pay:
    • 95% x total B.C. remuneration

Note: Each B.C. location of a charitable or non-profit employer is entitled to the $1,500,000 exemption as long as the B.C. location has B.C. remuneration of less than $4,500,000.

When do we have to register for and pay EHT?

Registration for EHT opened January 7, 2019. Non-exempt employers who would have paid more than $2,925 in EHT in the previous calendar year (2018) must register by May 15, 2019 and must pay their first quarterly installment by June 15, 2019. All other non-exempt employers must register by December 31, 2019, and must file and pay their first EHT return for the previous calendar year (2019) by March 31, 2020.

As all non-exempt employers will have to register for EHT in 2019, we would encourage you to review the Government of British Columbia’s website for up-to-date information regarding EHT and contact your legal counsel to learn more about the applicability of EHT to your business.