B.C. Increased Employment Incentive

The B.C. Increased Employment Incentive was a one-time refundable tax credit for employers. The deadline to apply was December 31, 2021. We'll continue reviewing and processing all applications received before January 1, 2022.

Last updated: January 1, 2022


Submit supporting documents

If you’ve been asked to submit additional documents to support your credit application, include your application confirmation number. You can submit in two ways:

Online

Follow the link provided in our email that requested the supporting documents.

By mail

BC Increased Employment Incentive
Ministry of Finance
PO BOX 9444 Stn Prov Govt
Victoria BC  V8W 9V3


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If you've made an error in your application, please contact us by email at IEIQuestions@gov.bc.ca


How the incentive worked 

The Increased Employment Incentive allowed employers to apply for a one-time tax credit. The credit was 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeded the employer’s total eligible remuneration for all eligible employees in the base period.

The base period was from July 1 to September 30, 2020.

The qualifying period was from October 1 to December 31, 2020.

The credit:

  • Did not have a maximum amount that an employer could claim, but a credit amount less than $10 would not be paid
  • Was not reduced by any provincial or federal support you may have received, such as the B.C. training tax credits or the federal Canada Emergency Wage Subsidy (CEWS)
  • Would offset any provincial tax debts an employer had outstanding at the time the credit was payable, such as the employer health tax or the provincial sales tax

Eligibility requirements

All employers, including employers who did not have to pay the employer health tax, were eligible for the credit if they:

  • Increased their eligible remuneration for the qualifying period compared to the base period
  • Had a permanent establishment in B.C. for the qualifying period, even if they didn’t begin to have a permanent establishment in B.C. until after September 30, 2020

A permanent establishment for the Increased Employment Incentive had the same definition as a permanent establishment for the employer health tax. See permanent establishment under the employer health tax for more information.

Employers may be individuals, corporations, partnerships or trusts.

Public institutions and registered political parties were not eligible for the credit.

Public institutions

Public institutions are defined under section 125.7(1) of the Income Tax Act (Canada) and include:

  • Schools, school boards, hospitals, health authorities, public universities or colleges
  • Organizations described in section 149(1)(a) to (d.6) of the Income Tax Act (Canada)

Public institutions do not include private schools, private colleges and Indigenous businesses as described for the Canada Emergency Wage Subsidy (CEWS). These entities were eligible for the credit.

Partnerships

Partnerships were generally eligible for the credit.

However, if interests in the partnership were held directly or indirectly by one or more entities that were public institutions (except Indigenous governments or Indigenous governing bodies) or registered political parties, their total combined interests must not have exceeded 50% of the fair market value of all of the interests in the partnership at any time between July 1, 2020 and December 31, 2020.

Associated employers

If you were associated with one or more employers on December 31, 2020, you were an associated employer for the purpose of calculating the credit amount.

An associated employer for the Increased Employment Incentive had the same definition as an associated employer for the employer health tax.

For the purposes of the Increased Employment Incentive, charitable or non-profit employers were subject to the association rules.

See associated employers under the employer health tax for more information.

Only one employer within an associated group of employers could claim the eligible remuneration for any employee if that employee was employed by more than one of the associated employers during either the base period or the qualifying period.

Associated employers must have entered into an agreement to decide which employer would claim the eligible remuneration for that employee. For the purposes of calculating the eligible remuneration for that employee, all remuneration paid by the associated employers to that employee was deemed to be paid by the employer who made the claim.


How the credit was calculated

The credit was calculated at 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeded their total eligible remuneration for all eligible employees in the base period.

  • (Total eligible remuneration for all eligible employees in the qualifying period – total eligible remuneration for all eligible employees in the base period) x 15%

Eligible remuneration

Eligible remuneration was the remuneration paid by an employer to or on behalf of an eligible employee in respect of all days in a week in the base period or the qualifying period. 

For each eligible employee, eligible remuneration must not have exceeded the maximum amount of $1,129.33 for each week. The maximum amount was prorated for partial weeks at the beginning or end of the base period or the qualifying period.

How the total eligible remuneration for each period was calculated:

  1. Weekly eligible remuneration in the base period and the qualifying period for each eligible employee was determined
  2. Eligible remuneration for all weeks in each period for each eligible employee was calculated
  3. Eligible remuneration for all eligible employees for each period was calculated

Important: All eligible employees included newly hired employees, existing employees, and employees who left during the base period or the qualifying period.

Remuneration

Remuneration defined for the Increased Employment Incentive was different from remuneration defined for the employer health tax. For example, stock options and wages in lieu of termination notice were not included in the remuneration for the Increased Employment Incentive but are included for the employer health tax.

Remuneration included for calculating the credit amount must have been paid to or on behalf of an eligible employee on or before June 30, 2021 or before the employer applied for this credit, whichever is earlier.

Remuneration included payments, benefits or allowances that were:

  • Paid to an eligible employee
  • Required to be included in the income of the employee under section 5 or 6 of the Income Tax Act (Canada)
  • Not listed under exclusions

Remuneration was based on when an eligible employee actually reported for work in B.C. during the base period or the qualifying period, not when the remuneration was paid.

Non-periodic payments were to be allocated to the relevant period when the work was done.

Important: If an employee did not report for work in B.C. at any time during the base period or the qualifying period, do not include any amount of remuneration that was paid to that employee in respect of the time that the employee did not report for work in B.C.

 

Examples on how remuneration was determined

Below are some examples on how remuneration was determined:

  • If an employer’s last pay period in the base period is the last two weeks in September 2020 and the pay day is in October 2020, the remuneration paid to the eligible employees for work performed in September 2020 should have been included in calculating the remuneration for the base period

  • If an employer hired an eligible employee in December and they worked during the last two weeks of December but didn’t receive their paycheck until January 2021, the employee’s remuneration should have been included in the calculation of the remuneration for the qualifying period

  • If an eligible employee received a one-time payment bonus in January 2021, remuneration should have been allocated to the relevant period during which the eligible employee worked to earn the bonus

 

What was included and excluded from remuneration

Included

The terms below are similar to their definitions under the employer health tax. 

When remuneration was calculated, the following was included:

Excluded

When remuneration was calculated, the following was excluded:

  • Employer-paid contributions or premiums to
    • Registered pension plan
    • Private health services plan
    • Supplementary unemployment benefit plan
    • Deferred profit sharing plan
    • Retirement compensation arrangement
  • Pensions, annuities or superannuation benefits paid by employers to a retired employee
  • Retiring allowances and severances
  • Stock option benefits
  • Wages in lieu of termination notice
  • Death benefits
  • Dividend income
  • Contributions by an employer to a plan or trust if the value of the employer’s contribution had already been included as remuneration

Eligible employees

An eligible employee was an employee of an employer who reported for work in B.C. during the base period or the qualifying period.

Report for work in B.C. means the employee either:

  • Worked in person at their employer’s B.C. permanent establishment
  • Was physically present in B.C. to perform their duties in B.C. and were paid from or through their employer’s B.C. permanent establishment
  • Was on leave while being paid from or through their employer's B.C. permanent establishment and met one of the first two requirements above immediately before going on leave

Eligible employees included:

  • Existing employees who had remained with the employer throughout both periods
  • New employees that were hired in either period
  • Existing employees who left in either period

An eligible employee did not include an employee who dealt with their employer at non-arm's length (e.g. an employer hiring their spouse) unless that person was an employee at the beginning of the base period.

Credit calculation examples

We recommend you review these calculation examples if you had unique employment scenarios:

  • You hired a new eligible employee who:
    • Was hired mid-week in the qualifying period
    • Had remuneration that is more than the maximum weekly salary amount of $1,129.33
  • You moved a part-time eligible employee to full-time employment
  • You hired or rehired an eligible employee in August while retaining all employees
  • You paid your eligible employees monthly

Need help?

Contact us if you have questions about the documents you’ve been asked to provide.

Email:
IEIQuestions@gov.bc.ca

Toll-free (within Canada):
1-877-387-3332

Phone (outside Canada):
1-250-387-3332