The province is implementing a number of tax credits this year to address the cost-of-living issues faced by many in B.C.
In addition, the province is following through on a request made by businesses in the province since the Employer Health Tax was implemented.
Ever since the Employer Health Tax (EHT) was implemented, businesses have been asking for the exemption limit to increase from $500,000 to $1 million.
With the current limit, any business with payroll costs above $500,000 has to pay 2.9 per cent of payroll to cover the EHT.
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Starting in 2024, that exemption limit will increase to $1 million, with partial exemption for businesses with payroll between $1 million and $1.5 million. Employers with payroll costs between $1 million and $1.5 million will see their contribution increase to 5.85 per cent. Employers above $1.5 million with payroll will not see a change in their rate of 1.95 per cent.
The B.C. government estimates this change will mean 90 per cent of businesses are exempt from the EHT, saving them around $100 million annually. Employees of exempt businesses will have those costs covered by the B.C. government.
Jeff Bray, president of the Business Improvement Areas of B.C. says he was hoping the exemption limit would be raised to $1.5 million, but this change will help businesses.
“For a lot of small and medium-sized businesses that will make a difference,” Bray said.
“Anything that reduces direct costs, and this is a tax on payroll, not on revenue, so it is a significant saving because you can be making money or losing money you’re still paying the same amount of taxes so that will certainly help.
B.C. Family Benefit
Between July 2024 and June 2025, there will be a 25 per cent increase in the B.C. Family Benefit.
This also expands the benefit to include around 66,000 more families than previously bringing the total number of families receiving the benefit to 340,000 for a cost of $248 million.
Families will receive an average of $445 more over the year.
B.C. Electricity Affordability Credit
Starting in April 2024, the government will be implementing a credit on energy bills to save households an average of $100 over the year, and businesses up to 4.6 per cent.
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Editor’s note: This story has been updated to correct the changes to the Employer Health Tax limits.
Laura Brougham
