Category Archives: Payroll

Payroll taxes? Remittance? When do I have to file? Do I have to file with WCB (Worksafe)? Am I an employee or self-employed? If you have other questions, please feel free to submit them to us.

B.C. Minimum Wage Increases on June 1, 2019

On June 1, 2019 the B.C. general minimum wage will increase to $13.85 per hour and the B.C. liquor servers minimum wage to $12.70.

The Factsheet prepared by the B.C. Employment Standards Branch outlines the June 1, 2019 increases, the increases that will come into effect on June 1, 2020 and June 1, 2021 and the increases for those employed in B.C. as live-in home support workers, live-in camp leaders and resident caretakers.  Please note on June 1, 2021 the B.C. general minimum wage and B.C the liquor servers minimum wage will be the same – both will be increased to $15.20 per hour.

 

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2019 Change in CPP and EI rates AND the introduction of B.C. Employer Health Tax

Increase in CPP rates

CPP rates will increase gradually from 2019 to 2025.

In 2018 and prior years, CPP retirement benefits were intended to replace one quarter of a taxpayer’s average work earnings.  The purpose of the CPP rate increases is to have CPP retirement benefits replace one third of a taxpayer’s average work earnings.

Phase one of the CPP rate increase will have the current CPP rate of 4.95% increase by the following increments:

2019: 0.15%

2020: 0.15%

2021: 0.20%

2022: 0.25%

2023: 0.25%

By the end of the series of increases, the 4.95% contribution rate will have increased to 5.95%.

Phase two of the CPP rate increase will require a 4% premium to be paid on earnings in excess of the year’s maximum pensionable earnings (YMPE) up to 107% of the YMPE.

For example, if the YMPE is $70,100 in 2024, the additional limit will be $75,007.  The 4% rate will be applied to the difference between the $75,007 and the YMPE of $70,100 ($4,907) – resulting in $196.28 in additional premiums payable.

For 2025 and later calendar years, the 107% multiplier will be increased to 114%.

Change in EI Rates

Employment Insurance rates will be reduced to 1.62% in 2019.  This is a decrease of 0.04% from the 2018 rate of 1.66%.

The maximum insurable earnings for 2019 is $53,100.  The maximum insurable earnings in 2018 was $51,700.

The maximum employee premiums for 2019 will be $860.22 – this is an increase of $2.00 compared with 2018.  The maximum employer premium will be $1,204.31 – this is an increase of $2.80 compared with 2018.

Introduction of B.C. Employer Health Tax

The B.C. Employer Heath Tax (EHT) comes into effect on January 1, 2019.

The purpose of the B.C. EHT is to replace the revenue derived from Medical Service Plan premiums previously paid by residents of B.C.  Although residents of B.C. have had their MSP premiums reduced by 50%, it is the B.C. government’s intention to eliminate MSP premiums paid by residents of B.C. by 2020.

Employers with remuneration of $500,000 or less are exempt from EHT.

Employers with B.C. remuneration between $500,001 and $1,500,000 pay a reduced tax of 2.925% of the portion of B.C. remuneration that is above the $500,000 exemption.

Employers with B.C. remuneration greater than $1,500,000 pay tax at 1.5% of the total B.C. remuneration.

If you are associated with other employers, you must share the $500,000 exemption with the other employers.

How to register: Registration begins on January 7, 2019 and should be completed through your eTaxBC account.

When to remit: Using the lessor of your 2018 BC remuneration paid and your estimated 2019 BC remuneration, calculate your 2019 employer health tax liability.   If your employer health tax liability is greater than $2,925, you are required to make quarterly instalments on or before the following dates: June 15th, Sept 15th, Dec 15th and March 31st with the filing of the EHT return.

When to file the EHT return:  On or before March 31st each year.  The 2019 EHT return will be due on March 31, 2020.

Be a Santa and not a Scrooge to your staff

T’is the time of year to thank your employees for their hard work and dedication.  You may do this with gifts and a holiday party.  As you want to be a Santa and not a Scrooge, it is important to plan the gifts and social event so that they are not considered taxable benefits according to the Income Tax Act and consequently included in your employees’ employment income for the year.

Here are some of the main points:
All cash or near-cash gifts (i.e. gift certificates or gift cards) are considered taxable benefits.
If an employee receives non-cash gifts during the year with a value of $500 or less, the non-cash gifts are not considered a taxable benefit. 
If the value of the non-cash gifts received by an employee during the year total $600, then the employee will be deemed to have received a taxable benefit of $100 ($600 less $500).
Holiday parties in which all employees are invited and cost $100 or less per person are not considered a taxable benefit. 
If the holiday party costs $200 per person, the entire cost of the holiday party is considered a taxable benefit.

September 15, 2016 B.C. minimum wage increase

The minimum wage in British Columbia increased today as follows:

General: $10.85 per hour

Liquor server: $9.60 per hour

Live-in home support worker: $108.50 per day or part day worked

For information on other the rate increases please refer to the Province’s minimum wage factsheet.

Are your employees’ tips subject to CPP and EI withholdings?

A recent Tax Court of Canada case revisited the topic of employee tips and whether the employer is responsible to withhold CPP and EI on the tip amount earned by employees.

If the employer controls the tip amount or controls the distribution of the tip, then CPP and EI should be withheld.  An employer is considered to have control in these situations:

  • The employer adds a mandatory service charge to a client’s bill to cover tips;
  • The employer adds a percentage to a client’s bill to cover tips;
  • Tips allocated to employees using a tip sharing formula determined by the employer;
  • Tips that an employer includes in his or her business income, later expenses and redistributes to employees in the form of pay;
  • Tips that the employees are required to turn over to their employer and are later distributed to the employees;
  • Cash tips that are deposited in the employer’s bank account and become the property of (or even commingled with the property of) the employer and subsequently paid out to the employees.

If the employee receives a tip directly from customers, then the employer is not responsible to withhold CPP and EI.  An employee is considered to receive direct tips in these situations:

  • A client leaves money on the table at the end of the meal and the server keeps the whole amount;
  • A client gives a tip directly to a bellhop, door person, car attendant, porter; etc.
  • Tips pooled and/or shared among employees in a manner determined by the employees (as opposed to the employer);
  • When paying the bill by credit card, a client includes an amount for a tip on the credit card and the employer returns the tip amount in cash to the employee;
  • When paying the bill by debit card, a client includes an amount for a tip and the employer returns the tip amount in cash to the employee;

Please visit the Canada Revenue Agency’s webpage on Tips and Gratuities for more information.