BC Eliminating MSP Premiums
New Payroll Tax
The BC Government recently announced that it will be eliminating Medical Services Plan (MSP) premiums effective January 1, 2020.
To replace the lost MSP premium revenues the Province will be introducing an Employer Health Tax. While many organizations already pay MSP premiums on behalf of their employees those organizations which do not pay the premiums for their employees will now be facing a new expense. The full rate of the tax is 1.95% of total payroll as shown below:
|Annual BC Payroll||Annual Tax ($)||Tax As % Of Payroll|
|$500,000 or less||$0||0.0%|
|Over $1,500,000||$29,250 + 1.95% of payroll over $1.5M||1.95%|
This new payroll tax will come into effective January 1, 2019. Therefore, those employers which currently pay MSP premiums will pay both those premiums and the Employer Health Tax in 2019.