B.C. Increased Employment Incentive

The B.C. Increased Employment Incentive is a one-time refundable tax credit for employers. The deadline to apply is December 31, 2021.

Last updated: August 5, 2021

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How the incentive works

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

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

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

The credit:

  • Does not have a maximum amount that an employer may claim, but a credit amount less than $10 will not be paid
  • Is not reduced by any provincial or federal support you may receive, such as the B.C. training tax credits or the federal Canada Emergency Wage Subsidy (CEWS)
  • Will offset any provincial tax debts an employer has outstanding at the time the credit is payable, such as the employer health tax or the provincial sales tax

Eligibility

All employers, including employers who did not have to pay the employer health tax, are 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 has 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 are 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 are eligible for the credit.

Partnerships

Partnerships are generally eligible for the credit.

However, if interests in the partnership are held directly or indirectly by one or more entities that are public institutions (except Indigenous governments or Indigenous governing bodies) or registered political parties, their total combined interests must not exceed 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’re associated with one or more employers on December 31, 2020, you're an associated employer for the purpose of calculating the credit amount.

An associated employer for the Increased Employment Incentive has 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 are 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 can claim the eligible remuneration for any employee if that employee is employed by more than one of the associated employers during either the base period or the qualifying period.

Associated employers must enter into an agreement to decide which employer will 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 is deemed to be paid by the employer who makes the claim.


Calculate your credit

The credit is calculated at 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeds 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 is 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 exceed the maximum amount of $1,129.33 for each week. The maximum amount is prorated for partial weeks at the beginning or end of the base period or the qualifying period.

To calculate the total eligible remuneration for each period:

  1. Determine the eligible remuneration for each week in the base period and the qualifying period for each eligible employee
  2. Add the eligible remuneration for all weeks in each period for each eligible employee
  3. Add the eligible remuneration for all eligible employees for each period

Important: All eligible employees include 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 is different from remuneration defined for the employer health tax. For example, stock options and wages in lieu of termination notice are 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 be paid to or on behalf of an eligible employee on or before June 30, 2021 or before the employer applies for this credit, whichever is earlier.

Remuneration includes payments, benefits or allowances that are:

  • 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 is 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 is paid.

Non-periodic payments are to be allocated to the relevant period when the work is 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.

Below are some examples on how remuneration is 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 be 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 be included in the calculation of the remuneration for the qualifying period

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

Inclusions

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

When you calculate your remuneration, include the following:

Exclusions

When you calculate your remuneration, exclude the following:

  • 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 has already been included as remuneration

Eligible employees

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

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

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

Eligible employees include:

  • Existing employees who have 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 does not include an employee who deals 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

Before applying, we recommend you review the calculation examples based on unique employment scenarios:

  • You hired a new eligible employee who:
    • Was hired mid-week in the qualifying period
    • Has 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 pay your eligible employees monthly

What you need to apply

To apply for the credit, you’ll need:

 

  • Your federal business number (BN), which is the first 9 digits of your GST/HST or CRA payroll account number
  • A business location address and, if different, a mailing address
  • If your business is incorporated, your incorporation number and date
  • Your business’ North American Industry Classification System (NAICS) Code
  • Information for all of your eligible employees (SIN, first and last name)
  • Your business’ total B.C. remuneration and eligible remuneration for the base period, broken down by employee
  • Your business’ total B.C. remuneration and eligible remuneration for the qualifying period, broken down by employee 
  • A document confirming your banking information (for example, a void cheque, bank statement, or teller stamped letter from your financial institution). This document must include the:
    • Branch (transit) number
    • Institution name (or number)
    • Account number
    • Account holder’s name

 

  • Registered charity
    • Registered charity number
  • Incorporated outside of B.C.
    • A copy of your incorporation documents
  • Partnership
    • Partners name and ID number
    • A copy of your partnership agreement
  • Sole proprietorship
    • SIN, first and last name of the sole proprietor
  • Associated employer
    • Each associated employer’s name and BN


To provide eligible employee information in the application, you may download and complete the Employee Summary Table spreadsheet (XSLX) and upload it in Step 8 of the application process.

To help you complete the spreadsheet, you may refer to the Employee Summary Table instructions.

Download spreadsheet

You may also choose to manually enter the information in Step 8 of the application. However, the online application may time out if it’s been inactive for too long. You’ll lose the information you’ve already inputted if you didn’t save your progress.

 


How to apply

You have until December 31, 2021 to apply.

Save time, apply through your eTaxBC logon

If you have an eTaxBC logon for employer health tax (EHT) or provincial sales tax (PST), log on to access the B.C. Increased Employment Incentive application. When you apply through your logon, the application will auto-fill many of your account details. 

Once logged on, select your EHT or PST account. You can find the application under "I Want To" on the right side.

Log on to eTaxBC

Apply without an eTaxBC logon

If you don’t have an eTaxBC logon for the employer health tax (EHT) or provincial sales tax (PST), you can apply for the credit online using eTaxBC without creating an account.

Apply online


After you apply

Submit supporting documentation

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

Through eTaxBC

A link will be provided in the email requesting the supporting documentation

By mail

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

Check your application status

You can check your application status online by entering your application confirmation number.

Check your application status

Change your application

If you made an error in your application, you have until December 31, 2021 to amend it.

If you submitted the application through your EHT or PST logon in eTaxBC:
 

  1. Log on and select the account where you submitted the application
  2. Select “Submit/amend my IEI application” under “I Want To”
  3. Enter your business information for steps 2 and 3
  4. In step 4, select “Amend a previous application” and enter the confirmation number that was provided in your confirmation email  

If you submitted the application without an eTaxBC logon:
 

  1. Go to the online application
  2. Enter your business information for steps 2 and 3
  3. In step 4, select “Amend a previous application” and enter the confirmation number that was provided in your confirmation email  

Do not submit a new application for the same employer. This will delay the processing of your application.

Your amended application will be reviewed by a staff member. We’ll contact you if we need more information.

Get your payment

After your application is approved, payment will generally be deposited to your bank account within 5 business days. We’ll notify you by email when your payment is processed. You’ll also receive a letter in the mail.


Legislation

Bill 4, Budget Measures Implementation Act, 2021

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Need help?

Contact us if you have questions about:

  • Submitting or amending an application
  • The documentation you’ve been asked to provide

Email:
IEIQuestions@gov.bc.ca

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

Phone (outside Canada):
250-953-3082