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Employer Health Tax (EHT)

 

The Employer Health Tax (EHT) is an annual payroll tax that came into effect on Jan-01-2019. It is separate from the existing MSP premiums and current payroll source deductions. The EHT is based on remuneration paid to employees who report for work at or is paid from/through a permanent BC establishment.

Employers with BC remuneration above the exemption amount of $500,000 in a calendar year must register for the EHT to receive an account number AND then enrol for access to eTaxBC in order to manage the EHT account ie: file returns and make payments online. Employers who are required to pay the EHT in 2019 and who already pay MSP premiums for their employees are required to pay both for the 2019 calendar year.

Effective Jan-01-2020 – there are no more MSP premiums.

The EHT is deductible from business income for income tax purposes.

Companies that have an annual EHT greater than $2,925 are required to make instalment payments. All other companies pay annually.

    • Instalment due dates are: Jun-15, Sep-15, Dec-15 and Mar-31.

Companies that are required to make instalment payments for the 2019 calendar year, should have registered by May-15-2019. All other required companies must register by Dec-31-2019.

A simplified way to look at determining a company’s BC remuneration in order to calculate the EHT, is to include all amounts that a company would normally put on a T4 for its employees. The list of inclusions, exclusions and special circumstances in calculating the BC Remuneration is extensive.

A $500,000 exemption is available when total payroll remuneration is less than 1.5 million. When total remuneration is greater than 1.5 million, the exemption is no longer available and the EHT rate decreases from 2.925% to 1.95%.

EHT TABLE

Payroll Amount

Annual Payment

Percentage

         <500,000

0

0

To    750,000

7,313

2.925%

To 1,000,000

14,625

2.925%

To 1,250,000

21,938

2.925%

To 1,500,000

29,250

1.95%

>1,500,000

29,250 + 1.95% over

1.95%

EHT Calculation Examples:

    • Remuneration of less than $500,000 calculates as: 2.925% * (500,000-500,000) = $0.00
    • Remuneration of $900,000 calculates as: 2.925% * (900,000-500,000) = $11,700.00 for the year or 11,700.00 / 4 = $2,925 per quarter.
    • Remuneration of $1,700,000 calculated as: 1.95% * 1,700,000 = $33,150 per year or 33,150 / 4 = $8,287.50 per quarter.

For help in estimating your EHT, please visit the Employer Health Tax Calculator.

For a more in-depth view please visit the government website page for the Employer Health Tax.

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