You are using an outdated browser.

This website is not compatible with your web browser.

Please upgrade your browser or activate Google Chrome Frame to improve your experience.

EPR CLIENT NEWS BULLETIN – British Columbia Employer Health Tax – effective January 1, 2019

November 2018

Download Bulletin

Effective January 1, 2019, there will be a new Employer Health Tax (EHT) of 1.95% that applies to the taxable remuneration that is paid to all BC employees.   The government has estimated that 15% of employers in BC will be required to pay this tax. 

The Employer Health Tax (EHT) is calculated as:

  • BC remuneration of $500,000 or less don’t pay employer health tax
  • BC remuneration between $500,000.01 and $1,500,000 (notch rate amount) pay the reduced tax amount as calculated:  2.925% x (BC remuneration – $500,000)
  • BC remuneration greater than $1,500,000 pay the tax on their total BC remuneration as calculated:  1.95% x total BC remuneration

If you are associated with other employers, you must share the $500,000 exemption. If you begin or cease to have a permanent establishment in BC during the calendar year, the exemption amount is prorated.

Employers with BC remuneration greater than $500,000 (exemption amount) in a calendar year must register for the employer health tax.  If you have annual BC remuneration greater than $600,000, your first instalment payment will be due on June 15, 2019. If your annual BC remuneration is between $500,000 and $600,000 you can pay annually.  Employers include an individual, a corporation, a partnership, a trust or a government.

BC is giving employers (who are subject to quarterly instalment payments) the option to calculate and pay EHT based on 25% of their prior year’s 2018 BC remuneration OR the current year’s 2019 estimated tax.

Using either method, the employer is to divide the tax payable by 4. The payment expectations around BC EHT are similar to corporate tax. In contrast, other payroll taxes in Canada base the payment obligation on current-year remuneration, as it is paid.

 Note: The employer health tax is separate and distinct from remitting source deductions or MSP premiums.

B.C. Remuneration

An employer’s B.C. remuneration includes the total of the following:

  • All remuneration paid to the employer’s employees who report for work at the employer’s permanent establishment in B.C., and
  • All remuneration paid to the employer’s employees who do not report for work at a permanent establishment of the employer, but are paid from or through a permanent establishment in B.C.

A more detailed list of taxable remuneration is available here:

https://www2.gov.bc.ca/gov/content/taxes/employer-health-tax/employer-health-tax-overview/eht-remuneration –  click on the “remuneration” link in the first paragraph.

You can use the employer health tax calculator to help you estimate the tax:  https://forms.gov.bc.ca/taxes/employer-health-tax-calculator/

How to Register with eTaxBC?

Registration begins January 7, 2019.

If you will be required to pay installments in the 2019 calendar year, you must register by May 15, 2019 and pay your first instalment by June 15, 2019.  

All other taxable employers must register by December 31, 2019.   You must file and pay your first return by March 31, 2020.

 Employers who are taxable will first need to register for an employer health tax account using eTaxBC. The registration process will take approximately 10 to 20 minutes. Once your registration is processed, you will receive an employer health tax account number. An employer health tax account number is 11-characters long and will be in the following format: EHT-1234-5678.

Once you have registered for an employer health tax account you can enrol for access to eTaxBC, or if you already have an eTaxBC account, you can log on to add access to your employer health tax account.

If you are a registered charitable or non-profit organization with more than one location, please refer to Employer Health Tax for Charitable and Non-Profit Employers for additional rules that apply to determine at which location an employee reports for work.

 Want more details?

Additional information is also available at the following links:

Contact us at EPR Maple Ridge Langley if you have questions.

Experienced Bookkeeper – Position Filled

Our Langley location is looking for a full-time experienced bookkeeper. 

The position requires extensive knowledge and proficiency with:

  • Sage Simply Accounting and both QuickBooks Online and desktop versions
  • Payroll preparation, ROE’s, WCB, T4 and T5018 preparation
  • GST and PST preparation and reporting
  • T1 preparation for individuals and proprietors experience an asset

The successful candidate must be able to work well within a team and have excellent communication, organization, and time management skills. Experience working in a public practice environment with deadlines and a strong understanding of a variety of businesses and their bookkeeping requirements is an asset.

We are an established firm with a great working environment and benefits.

Please respond with your resume and salary expectations by email to vspindor@eprcpa.ca. Thank you to all applicants however only those being interviewed will be contacted.

No phone calls please.

EPR CLIENT NEWS BULLETIN – MEDICAL PRACTITIONERS AND THE GST

April 10, 2018

Download Bulletin      

Unlike most businesses, medical practitioners[1] only need to collect Goods and Services Tax (“GST”) on certain types of supplies and are restricted from claiming an input tax credit (“ITC”) on costs incurred based on the type of supplies provided.

It is important that a medical practitioner correctly evaluate the GST status of their supplies as either taxable supplies, zero rated supplies or exempt supplies.

Taxable Supplies

If a medical practitioner is a GST registrant and provides a taxable supply they will be required to collect and remit GST on the taxable supply.  Taxable supplies are the most common type of supply and medical practitioners making taxable supplies are required to collect the 5% GST (or Harmonized Sales Tax (“HST”) at the applicable rate).  If a medical practitioner is supplying a service or product which is not a zero-rate or exempt supply then the supply would be a taxable supply.  Any GST paid on costs incurred to make the taxable supply would be eligible for an ITC which would offset any GST collected.

Examples of taxable supplies provided by medical practitioners can include the following: providing reports for non-medical reasons, management fees received, administrative services provided, fees received on research projects, expert witness fees, consulting services, fees for any service which are not diagnostic or treatment based in nature.

A taxable supply may be partially an exempt or zero-rate supply and therefore it is important to evaluate the nature of each transaction and determine what type of supply is being provided.

Zero-Rated Supplies

Some supplies are zero-rated under the GST/HST.  GST/HST applies to these supplies at a rate of 0% and similar to making taxable supplies, medical practitioners making zero-rated supplies are entitled to claim the GST/HST paid on costs incurred related to the making of the zero-rated supplies as an ITC.

Examples of zero-rated supplies provided by medical practitioners are qualifying medical devices, prescription drugs and drug-dispensing services[2].

Exempt Supplies

Some supplies are exempt from the GST/HST and GST/HST does not apply to these exempt supplies.  If you are solely providing exempt supplies you do not charge the GST/HST and you generally cannot claim ITCs to recover the GST/HST on costs incurred to make the exempt supplies.

Examples of exempt supplies are most health, medical and dental services performed by licensed physicians or dentists for medical reasons[3].  This does not include what would otherwise be considered a zero-rated or taxable supply.

What Should You Do?

Medical practitioners should identify if they are providing a mix of taxable, zero-rated or exempt supplies, each of which would result in their respective GST/HST treatment.  Taxable supplies would require GST/HST to be collected while zero-rated and exempt supplies would not require GST/HST to be collected.  GST/HST paid on costs incurred to make taxable supplies and zero-rated supplies would be eligible to claim ITCs while costs incurred to make exempt supplies would not.

CRA has provided administrative guidance on types of supplies and examples of taxable supplies, zero-rated supplies and exempt supplies here: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-gst/charge-gst-hst.html#type.

Please note that what has been outlined above is general in nature and that the GST/HST rules are complex.  Before you make any changes to your GST/HST, please consult your tax or accounting advisor.

Maple Ridge: eprmr@eprcpa.ca
Langley: eprly@eprcpa.ca

[1] Medical practitioner is defined as a person who is entitled under the laws of the province to practice the profession of medicine or dentistry

[2] As outlined in Excise Tax Act and its Regulations

[3] As outlined in Excise Tax Act and its Regulations

ArchivesArchivées

Proud member of: