New Employer Health Tax worries businesses
With the end of the fiscal year looming, small-business owners in B.C. say they are considering staff layoffs and reduced hours to cope with the added costs of a new provincial employer health tax.
The Employer Health Tax (EHT), which takes effect Jan. 1, aims to replace the revenues lost from the elimination of Medical Services Plan (MSP) premiums in 2020, which means employers have to pay both the MSP and EHT in 2019.
Businesses with a payroll of at least $500,000 a year will need to contribute more to their taxes under the EHT.
Richard Truscott, vice-president of the Canadian Federation of Independent Business in B.C. and Alberta, said a “common” measure small businesses take to handle increased expenses is to either drive up prices or look at cutting hours or jobs.
“Small businesses don’t have a magic printing press to suddenly create more money inside the business. It’s got to come from somewhere,” he told Starmetro.
Among the solutions Truscott would like the province to consider are raising the minimum payroll threshold from $500,000 to $1.25 million and exempting workers under 18, so that employers wouldn’t be deterred from hiring them.
Pressures rising on small businesses. Read more at thestar.com/vancouver