BC Employer Health Tax (EHT): 2026 Complete Employer Guide

What is the BC Employer Health Tax (EHT)?

The BC Employer Health Tax (EHT) is a payroll tax administered by the British Columbia Ministry of Finance. It applies to employers who have BC remuneration above the annual exemption threshold and is the BC government's funding mechanism for the public healthcare system (replacing MSP premiums, which were eliminated on January 1, 2020).

EHT is not collected by CRA — it is administered by the BC Ministry of Finance through the eTaxBC online portal.

2026 EHT Rates and Exemptions

Standard Employers (For-Profit)

Charities and Non-Profits

The 5.85% notch rate is designed to phase out the exemption smoothly between $1M and $1.5M of remuneration.

How to Calculate BC EHT — Worked Examples

Example 1 — Small business, $850,000 in BC remuneration

• ●BC remuneration: $850,000
• ●Exemption: $1,000,000
• ●EHT owed: $0 (fully exempt)

Example 2 — Mid-sized business, $1,250,000 in BC remuneration

• ●BC remuneration: $1,250,000
• ●Amount over exemption: $1,250,000 − $1,000,000 = $250,000
• ●EHT rate: 5.85%
• ●EHT owed: $250,000 × 0.0585 = $14,625

Example 3 — Large business, $2,000,000 in BC remuneration

• ●BC remuneration: $2,000,000 (above $1.5M threshold)
• ●EHT rate: 1.95% on entire remuneration
• ●EHT owed: $2,000,000 × 0.0195 = $39,000

Example 4 — Charity, $1,800,000 in BC remuneration

• ●BC remuneration: $1,800,000
• ●Amount over $1.5M exemption: $300,000
• ●EHT rate: 2.925%
• ●EHT owed: $300,000 × 0.02925 = $8,775

What Counts as "BC Remuneration"?

EHT is calculated on BC remuneration — not all wages. BC remuneration includes:

• ●Salaries, wages, and bonuses
• ●Vacation pay
• ●Statutory holiday pay
• ●Commissions
• ●Taxable benefits (most are EHT-taxable)
• ●Stock options exercised by BC employees
• ●Director's fees paid to BC residents
• ●Pay in lieu of notice

Excluded from BC remuneration: - Severance pay (in addition to pay in lieu) - Pension contributions (employer portion) - Workers' compensation payments - Reasonable expense reimbursements - Wages paid to employees who do not report to work in BC

For employees who work in multiple provinces, you must allocate remuneration based on where the work was actually performed.

Registration for BC EHT

You must register for EHT if your BC remuneration in a calendar year exceeds: - $1,000,000 (for-profit employers) - $1,500,000 (charities and qualifying non-profits)

Register through eTaxBC: https://www.etax.gov.bc.ca

After registration, you'll receive a BC EHT account number used for all filings and payments.

If your BC remuneration is below the threshold, you do not need to register or file. However, if you anticipate exceeding the threshold mid-year, register proactively to avoid scrambling.

EHT Filing and Payment Deadlines

Annual EHT return

The EHT return is filed online through eTaxBC and is due March 31 of the following year. For example, the 2025 EHT return is due March 31, 2026.

Quarterly instalment payments

Employers whose EHT for the prior year was more than $2,925 must make quarterly instalment payments:

Each quarterly instalment should be 25% of the lesser of: - Estimated current-year EHT - Prior-year EHT

Employers below the $2,925 threshold pay only the annual amount when the return is filed.

Multiple Employers in an Associated Group

The BC EHT exemption is shared across associated employers (companies under common control). The exemption threshold of $1,000,000 (or $1,500,000 for non-profits) is allocated among the associated group via an annual election.

If you operate multiple BC corporations under common ownership, you cannot stack exemptions. Plan the exemption allocation carefully — getting it wrong creates costly EHT overpayments or underpayments.

Common BC EHT Mistakes

1. Failing to register on time. If you cross the threshold mid-year, you owe EHT for the full year. 2. Misallocating multi-province employees. Only BC-attributable remuneration is EHT-taxable. 3. Forgetting quarterly instalments. BC Ministry of Finance charges interest on missed instalments. 4. Not allocating the exemption among associated companies. Each company gets a portion, not the full amount. 5. Including non-EHT items. Severance, expense reimbursements, and pension contributions are excluded. 6. Filing or paying late. Penalties of 10% of the unpaid amount, plus daily interest.

How Outsource Bookkeeping Handles BC EHT

For our BC payroll clients above the exemption threshold: - We calculate BC remuneration accurately every pay period - Track quarterly instalment requirements - File the annual EHT return through eTaxBC - Reconcile EHT to general ledger and accruals

For multi-province clients, we allocate remuneration correctly. For groups of associated BC employers, we coordinate exemption allocation.

[Book a free consultation](/contact) to discuss your BC payroll and EHT compliance.

Related Resources

• ●[Vacation Pay BC Calculation Guide](/blog/vacation-pay-bc)
• ●[Record of Employment (ROE) Guide](/blog/record-of-employment-canada-guide)
• ●[Monthly Bookkeeping Checklist](/blog/monthly-bookkeeping-checklist)