There are significant changes to the Employer Health Tax (EHT) as announced in Budget 2024. These changes are set to impact many businesses across British Columbia, and we want to ensure you are fully informed and prepared.
Key Changes to EHT:
- Increased Income Threshold: Starting from the 2024 tax year, the income threshold for EHT exemption has been increased from $500,000 to $1 million. This means that employers with B.C. remuneration of $1 million or less will now be exempt from paying the EHT.
- Adjusted Tax Rates: For employers with B.C. remuneration between $1,000,000.01 and $1,500,000, the tax rate has been set at 5.85%. This adjustment aims to provide relief to smaller businesses while ensuring that larger employers continue to contribute fairly.
What This Means for Your Business:
- Exemption for Smaller Employers: If your business’s B.C. remuneration is $1 million or less, you will no longer be required to pay the EHT. This change is expected to provide significant financial relief and support for smaller businesses.
- New Tax Rate for Mid-Sized Employers: Businesses with B.C. remuneration between $1,000,000.01 and $1,500,000 will now be subject to a tax rate of 5.85%. It is important to review your payroll and financial projections to understand the impact of this new rate on your business.
Next Steps:
We recommend that all our clients review their current payroll and financial records to determine how these changes will affect their EHT obligations. Our team is here to assist you in understanding and navigating these changes. Please do not hesitate to reach out to us for personalized advice and support.
