Employer Health Tax B.C. Remuneration
Effective immediately, the B.C. government has introduced tax changes to assist in the response to COVID-19. Learn more.
The employer health tax is based on the remuneration an employer pays to their employees and applies to employers with 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.
B.C. remuneration doesn’t include any remuneration paid to employees who report for work at a permanent establishment of the employer outside B.C. for all or substantially all of the calendar year.
The residence of an employer’s employees is irrelevant in determining whether an employer has B.C. remuneration.
Learn more about determining remuneration, such as what to include and exclude, as well as special circumstances like gratuities or tips.
An employee is an individual employed by an employer, including someone
- who holds an office with an employer and receives payment for carrying on the duties of the office, or
- who was formerly employed by an employer or who formerly held an office with an employer and received payment from the employer.
A person who holds office includes a person who is elected or appointed to a position.
When there is an employment relationship, employer health tax applies on any B.C. remuneration paid by the employer to the employee or former employee in a calendar year.
Find out further information on how to determine if an employment relationship exists.
An employee is considered to report for work at a permanent establishment of an employer if the employee comes to the permanent establishment in person to work, or if he or she may reasonably be regarded as attached to the permanent establishment.
The following factors will be considered when determining whether an employee is attached to the permanent establishment:
- Nature of the duties performed by the employee
- The place where the employee regularly performs his or her duties
- The place from which the employee is hired
- The place from which the employee regularly receives instructions or directions from the employer, through any type of communication
- The place from which the employee is supervised
- The place to which the employee submits attendance records and expense claims
- The place from which the employee receives equipment, uniforms, etc.
If you are a registered charitable or non-profit organization with more than one location, please refer to Employer Health Tax for Charitable or Non-Profit Employers for additional rules that apply to determine at which location an employee reports for work.
The determination of B.C. remuneration is based on whether an employer has a permanent establishment in B.C.
In general, an employer has a permanent establishment in B.C. if the employer has a fixed place of business in the province. An employer may also have a permanent establishment in certain other circumstances, such as when the employer carries on business through an employee or agent, or uses substantial machinery or equipment in B.C.
If an employer has a permanent establishment in B.C. for income tax purposes, the employer will likely also have a permanent establishment in B.C. for employer health tax purposes.
Learn more about what defines a permanent establishment for employer health tax.