BC MSP Premiums End December 31, 2019

Since the beginning of 2019, BC has been under a transition to phase out Medical Services Plan premiums. While MSP premiums were reduced by 50%, the Employer's Health Tax (EHT) was introduced. As of January 1, 2020, British Columbians will no longer pay MSP premiums.
Categories: Employee Benefits
Dec 12th, 2019 | By: CapriCMW

Updated December 12, 2019

Since the beginning of 2019, BC has been under a transition to phase out Medical Services Plan premiums. While MSP premiums were reduced by 50%, the Employer's Health Tax (EHT) was introduced, and employers with annual payroll over $500,000 have been paying both EHT and MSP premiums. As of January 1, 2020, British Columbians will no longer pay Medical Services Plan premiums.

Taxable employers must register for the EHT by December 31, 2019 and file and pay their first return by March 31, 2020.

How the tax affects businesses:

Annual Payroll
Tax Rate 
$500,000 or less 0%
$500,000.01 - $1,500,000 2.925% x (payroll - $500,000)
$1,500,000 + 1.95%

 

Non-profit organizations:

Charity and non-profit organizations operating in BC are assessed on payroll per location, not overall annual payroll across BC.

Annual Payroll
Tax Rate 
$1,500,000 or less 0%
$1,500,000.01 - $4,500,000 2.925% x (payroll - $1,500,000)
$4,500,000 + 1.95%

 

The definition of "payroll" includes the following forms of compensation:
  • Salary and wages
  • Advances of salary and wages
  • Payments for casual labour
  • Bonuses, commissions and other similar payments
  • Vacation payments
  • Gratuities or tips paid through an employer
  • Taxable allowances and benefits
  • Directors’ fees paid to directors of corporations
  • Amounts paid by an employer to top up benefits, such as maternity and parental leave
  • Stock option benefits
  • Employer-paid contributions to an employee’s RRSP
  • Employer-paid group life insurance premiums
Employer paid contributions and premiums not subject to EHT include:
  • Registered pension plan contributions
  • Private health services plan contributions and extended health and dental premiums
  • Supplementary unemployment benefit plan contributions
  • Deferred profit sharing plan contributions
  • Retirement compensation arrangement contributions

For employers with payroll in BC and in other provinces, payroll in other provinces is not subject to EHT.

More details about the EHT can be found here.

To estimate your employer health tax (EHT) amount, try the EHT Calculator.



Your CapriCMW Benefits team is here to help with short and long-term strategies around the structure of your employee benefits and retirement programs. Contact a CapriCMW Benefits Advisor for more information.

Recent Blog Posts

Business Insights / Real Estate, property development
How the Land Owner Transparency Act Will Affect Developers in BC

The Land Owner Transparency Act (LOTA), expected to come into force later this year, will introduce…

Feb 19th, 2020 | By: CapriCMW
Business Insights / data breach, privacy breach, PIPEDA
Using Third Party Service Providers for Data Processing: Your Business' Legal Obligations

If your business collects personal information of any kind, you're likely using third party services…

Feb 12th, 2020 | By: CapriCMW
Personal Insurance / extreme weather, home maintenance
10 Ways to Protect Your Home Against Cold Weather

Extreme weather is becoming more common with temperatures hitting historic lows this winter in many…

Feb 5th, 2020 | By: CapriCMW
photo-10.jpg

Confidence and Freedom

At CapriCMW, we provide personalized insurance and custom risk solutions to give you the confidence and freedom to focus on what matters to you. Talk to an Advisor or get a quote today.

Get a Quote    Or call 1-800-670-1877

Can’t find what you are looking for? Ask us!