# BC MSP Premiums End December 31, 2019

> In 2019, BC started phasing out Medical Services Plan premiums. As of Jan. 1, 2020, British Columbians will no longer pay MSP premiums.

Since the beginning of 2019, BC has been under a transition to phase out Medical Services Plan premiums. While MSP premiums were reduced by 50%, the Employer's Health Tax (EHT) was introduced, and employers with annual payroll over $500,000 have been paying both EHT and MSP premiums. As of January 1, 2020, British Columbians will no longer pay Medical Services Plan premiums.

Taxable employers must register for the EHT by December 31, 2019 and file and pay their first return by March 31, 2020.

How the tax affects businesses:

Annual PayrollTax Rate $500,000 or less0%$500,000.01 - $1,500,0002.925% x (payroll - $500,000)$1,500,000 +1.95%

Non-profit organizations:

Charity and non-profit organizations operating in BC are assessed on payroll per location, not overall annual payroll across BC.

Annual PayrollTax Rate $1,500,000 or less0%$1,500,000.01 - $4,500,0002.925% x (payroll - $1,500,000)$4,500,000 +1.95%

The definition of "payroll" includes the following forms of compensation:

Salary and wages

Advances of salary and wages

Payments for casual labour

Bonuses, commissions and other similar payments

Vacation payments

Gratuities or tips paid through an employer

Taxable allowances and benefits

Directors’ fees paid to directors of corporations

Amounts paid by an employer to top up benefits, such as maternity and parental leave

Stock option benefits

Employer-paid contributions to an employee’s RRSP

Employer-paid group life insurance premiums

Employer paid contributions and premiums not subject to EHT include:

Registered pension plan contributions

Private health services plan contributions and extended health and dental premiums

Supplementary unemployment benefit plan contributions

Deferred profit sharing plan contributions

Retirement compensation arrangement contributions

For employers with payroll in BC and in other provinces, payroll in other provinces is not subject to EHT.

More details about the EHT can be found here.

To estimate your employer health tax (EHT) amount, try the EHT Calculator.

Your Acera Benefits team is here to help with short and long-term strategies around the structure of your employee benefits and retirement programs. Contact an Acera Benefits Advisor for more information.