The Deadline to Register for the BC Employer Health Tax (“EHT”) Is Coming Soon
The EHT registration deadline is quickly approaching for some employers.
Employers who had BC Remuneration of $600,000 or more in the 2018 calendar year will have an EHT instalment requirement for 2019. Employers with an EHT instalment requirement for 2019 must register by May 15, 2019.
This $600,000 BC Remuneration threshold for 2018 must be shared between associated employers, including associated employers that are corporations, individuals, and trusts. Accordingly, you will need to aggregate the BC Remuneration for an associated group to determine if you have exceeded the threshold.
Employers who did not exceed the $600,000 threshold for 2018 but will have an EHT liability for 2019 are required to register by December 31, 2019 – but there is no harm in registering early.
Employers with BC Remuneration amount for the associated group that is less than $500,000 for 2019 are not required to register for the EHT, or to pay the tax, for 2019.
D&H Group LLP published a newsletter providing an overview of the new BC Employer Health Tax (effective for 2019 and future years) on January 3, 2019. This newsletter contained an overview of the EHT, information on determining EHT requirements, and some of the special rules for registered charities and not-for-profit employers. Read our January newsletter here: The New BC Employer Health Tax.
Do I Need to Register for EHT by May 15 and Make EHT Instalment Payments?
If you are an employer (other than a charity or not-for-profit) and you had BC remuneration of $600,000 or greater in the 2018 calendar year, or if you are part of an associated group that had BC remuneration of $600,000 for 2018, you are required to register for the EHT and to make EHT instalment payments for 2019.
Registered charities and not-for-profit employers are required to make instalment payments for 2019 if their 2018 year BC remuneration was greater than $1,600,000.
Special rules apply for employers that began or ceased to have a permanent establishment in BC during the 2018 calendar year, including corporations that were incorporated during the 2018 year and employers who did not have a permanent establishment in BC throughout 2018. In those circumstances, an employer must prorate the $600,000 and $1,600,000 thresholds for the portion of the 2018 year they had a permanent establishment in BC to determine their instalment requirements.
What Instalments Are Required in 2019?
To determine the instalment requirement for 2019, employers need to calculate what their 2018 EHT liability would have been had the tax had been in effect in 2018. The instalment requirement for 2019 is based on this hypothetical 2018 tax amount.
The required instalment payments, due on June 15, September 15, and December 15, are the lesser of:
Late or deficient instalments are subject to interest charges.
ABC Limited had BC remuneration for 2018 of $800,000. ABC Limited used the BC Government’s EHT calculator (see https://forms.gov.bc.ca/taxes/employer-health-tax-calculator/) to estimate the EHT based on $800,000 of BC remuneration.
ABC Limited is required to file an EHT return for 2019 by March 31, 2020. The three instalments paid will be applied against the actual tax liability determined on the return, and the final payment of tax owing for 2019 will be due on March 31, 2020.
If ABC Limited’s 2019 actual BC remuneration is $850,000, then the EHT payable for 2019 will be $10,237.50. On filing the 2019 EHT return, ABC Limited’s tax owing will be:
|Total EHT for 2019:||$10,237.50|
Less: instalments paid
|Balance due March 31, 2020:||$3,656.25|
How do I register?
To complete the registration, you will need to have the following information on hand:
If you have any questions about your EHT requirements, calculating your EHT instalments, or if you would like assistance registering for EHT, please contact your D&H Group LLP advisor.News