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

VIDEO: Natalie Geldar wows judges to win Duncan Has Talent show/cover tunes

Sierra Compton takes second, and Naomi Davies places third in finals July 13

The clothes are as hot as the weather at the Duncan Day Fashion Show

Downtown businesses get to show their style while audience enjoys it from the shade

Andrea Rondeau column: Heat wave has people taking out their crankiness on others

It’s the kind of heat that has car horns honking, and tempers flaring a little more easily.

Sarah Simpson column: To the guy who told me to ‘listen to my husband’

SURELY, repeat, SURELY, that means somebody out there thinks I’m interesting?

Volunteers hard at work making meals for BC Summer Games

“We just keep cooking and cooking.”

BC Games: Day 2 comes to an end

Hundreds of medals have been handed out at the 2018 BC Summer Games in the Cowichan Valley

Coming up in Cowichan: Medicine walk

Sylvester will teach participants about traditional uses for many of the plants that grow naturally

Brush fire breaks out west of Port Alberni

Fire forces partial closure of Highway 4 heading to Ucluelet and Tofino

Accident on Vancouver Island after artillery gun rolls down hill and damages taxi

Witness says accident happend about 1 p.m. Saturday; RCMP investigating

B.C. mining company, involved in 2014 spill, ordered to pay lost wages

Mount Polley Mining Company must pay wages to 26 employees who were laid off without proper notice

Two significant wildfires burning in southeastern B.C.

More than 20 fires were burning in the Southeast Fire Centre as of Saturday afternoon

Volunteers provide the glue that keeps BC Games moving

The 2018 Cowichan Summer Games had more than 2,300 volunteers on hand across Vancouver Island

No Name brand chicken nuggets recalled due to possible salmonella

Canadian Food Inspection Agency says multiple illnesses reported in B.C., Alberta and Ontario

Lodeiro scores twice to help Sounders beat Whitecaps 2-0

Seattle’s Nicolas Lodeiro opened the scoring in the fifth minute when he converted a penalty kick

Most Read