Do I have to pay BC employer health tax?

Only if your BC payroll for the calendar year is over $1,000,000. Employers at or under $1,000,000 pay no employer health tax (EHT) and do not need to register. Between $1,000,000 and $1,500,000 the tax is 5.85% of the amount over $1,000,000; above $1,500,000 it is 1.95% of total BC payroll with no exemption. Associated employers share one $1,000,000 exemption.

Updated October 30, 2026. Figures from the BC Government employer health tax pages linked below.

Rates for 2026 (regular employers)

$1,000,000 or less: no tax.
$1,000,000.01 to $1,500,000: 5.85% x (BC remuneration minus $1,000,000).
Over $1,500,000: 1.95% of total BC remuneration.
Charities and non-profits: a $1,500,000 exemption; 2.925% of the amount over $1,500,000 up to $4,500,000; 1.95% of total remuneration above $4,500,000. Qualifying locations can each have their own exemption.

Key dates

Register: by December 31 of the first year you owe the tax.
Instalments: June 15, September 15 and December 15, but only if last year's EHT was over $2,925. Each is 25% of the lesser of last year's tax and this year's estimate. No instalments are due in your first year.
Annual return and balance: March 31 of the following year (March 31, 2027 for 2026).

How to register

Online through eTaxBC: about 10 to 20 minutes. You need your federal business number.
Account number: arrives by mail in the format EHT-1234-5678.
Partial year: the exemption is prorated if you were an employer for only part of the year.

Associated employers

One exemption shared: associated employers (for example, two companies controlled by the same owner) share the $1,000,000 exemption between them. Registered charities and non-profits do not have to share.
Why it matters: two companies with $700,000 of payroll each are under the line separately but over it together.

Penalties and interest

Late return: 5% of the balance owing plus 1% for each complete month late, up to 12 months.
Repeated failure after a written demand: 10% plus 2% a month, up to 20 months.
Interest: prime plus 3% on late payments and late or short instalments.
Income tax: EHT paid is deductible from business income.

Worked examples (estimates for illustration)

Kelowna roofing company, $900,000 BC payroll: under $1,000,000, so no EHT and no registration.
West Kelowna builder, $1,240,000: ($1,240,000 minus $1,000,000) x 5.85% = $240,000 x 5.85% = $14,040.
Vernon manufacturer, $2,000,000: $2,000,000 x 1.95% = $39,000.
Two associated companies, $700,000 + $650,000 = $1,350,000: they share one exemption, so EHT on the group is ($1,350,000 minus $1,000,000) x 5.85% = $20,475, split as they allocate the exemption.

FAQ

Is there still a $500,000 registration threshold?
No. That threshold applied to 2023 and earlier years.

Do I deduct EHT from employees' pay?
No. It is an employer tax, not a payroll deduction.

Does the exemption apply to owner-managers' salaries?
Remuneration paid to employees, including owners on salary, counts toward BC remuneration.

Every situation is different, so talk to your accountant about your specifics.

Want a second set of eyes? Email info@murtaghco.ca or book a 30-minute call. Devon Murtagh, CFA, FRM.

Sources: BC Government: Employer health tax overview; BC Government: Charities and non-profits; BC Government: Register for EHT; BC Government: EHT FAQ; BC Government: EHT penalties and interest.