Finance Minister Carole James has been under fire for the payroll tax being imposed to replace Medical Services Plan premiums. (Hansard TV)

Non-profits, schools get break on B.C. health payroll tax

Exemption for charities $1.5 million, three times for-profit businesses

Non-profit organizations will get a break on the B.C. government’s new health care payroll tax when it takes effect next year.

Finance Minister Carole James released the details of the new tax Wednesday, so businesses, local governments and other agencies can prepare. The official notice to employers reveals a $1.5 million exemption for charities and qualifying non-profit organizations, three times the exemption offered to businesses when the tax was announced in the B.C. budget in February.

In an interview with Black Press, James clarified that while school districts, health authorities and universities will pay the tax, their budgets from the province will be adjusted to cover the additional costs in the transition period.

“We will be providing resources to school boards, to health authorities, social services, community organizations, universities and colleges,” James said. “Unlike the previous government, we’re not downloading the costs.”

Reimbursing provincial agencies for the cost of the payroll tax is estimated to cost the province $90 million a year.

The tax is to replace revenue collected from Medical Services Plan premiums, paid by individuals and employers. The rate was cut by half last year and is to be eliminated by 2020.

The tax applies to “any entity with a payroll,” says the memo to employers. That includes municipalities, which are preparing to raise property taxes to cover costs they expect to double in 2019. James said.

RELATED: No break from health tax for municipalities

RELATED: Payroll tax a big bill for greenhouse growers

As of January 2019, employers pay 1.95 per cent of their payroll for businesses and organizations with payrolls of more than $1.5 million. A lower rate applies for payrolls between $500,000 and $1.5 million, and those below $500,000 are exempt.

Non-profits that are not registered charities but get the higher exemption are defined as being operated “solely for social welfare, civic improvement, pleasure or recreation” and “any other purpose other than profit.” The higher exemption will also apply to each location of a large non-profit, allowing most to escape additional costs, James said.

The payroll tax applies whether employers pay their employees’ MSP premiums or not. James emphasized that while property taxes may go up, individuals stand to save $800 a year if they have been paying their own MSP premiums.

The finance ministry calculates that with the exemptions, 85 per cent of B.C. businesses will not pay the employer health tax, and fewer than five per cent will pay the full rate of 1.95 per cent a year. Those top five per cent will be responsible for paying 96 per cent of the tax.

Just Posted

Update: Park pipeline protesters say arrest is a ‘declaration of war’

Led by Kanahus Manuel, the Tiny House Warriors moved into park in Clearwater last week

Police investigating more racist slogans on First Nations signs

Police are investigating racist graffiti being posted on First Nations signs in the Kamloops area

Update: Kamloops wildfire now mapped at 500 hectares

Firefighters worked overnight on what was a fast-growing wildfire east of Kamloops.

France doubles up Croatia 4-2 to win World Cup

Played in Moscow Russia, latest Fifa World Cup marks the highest scoring final since 1966

Extreme mountain trail course opens for business in North Thompson Valley

By Jaime Polmateer / The Times Clearwater’s Smokin’ True Ranch held the… Continue reading

Trudeau asks transport minister to tackle Greyhound’s western pullout

Prime Minister Justin Trudeau says he’s asked Transport Minister Marc Garneau to find solutions in Greyhound Canada’s absence.

Crashes reach ‘all-time high’ across B.C.: ICBC

Auto insurer recorded more than 350,000 crashes n in 2017

Pressure on for ride hailing, bus options in B.C.

Premiers to press Ottawa for help replacing Greyhound service

Usain Bolt to make run at pro soccer in Australia

Olympic sprint great has long expressed his love of the game

Duchess of Sussex wears dress by Calgary’s Nonie to Mandela exhibition

Nonie is believed to be the first Canadian based ready-to-wear designer for the duchess

Amazon’s hopes its Prime Day doesn’t go to the dogs

Shoppers clicking on many Prime Day links after the 3 p.m. ET launch in the U.S. got images of dogs

Trudeau blasts Putin, Russia following Finland summit but stays mum on Trump

Strong words come one day after a controversial summit between Putin and Trump in Finland

Temperature records break across southern B.C. as heat continues

Whistler broke a 70-year-old record high of 32.2 C with a temperature of 32.9 C

Hawaii volcano boat tours continue after ‘lava bomb’ injuries

“An explosion occurred near the shoreline hurling hot lava rocks towards the boat and injuring several passengers.”

Most Read