The BC government has introduced a new incentive program for BC employers.

The program offers employers a one-time tax credit, equal to 15% of the increase in remuneration from the base period to the qualifying period. There is no maximum credit amount and it is not affected by any other government support you may have previously applied for.

You may benefit from this credit if you have hired a new employee(s) during the qualifying period, or have moved a part-time employee to full-time

The base period is July 1 to September 30, 2020
The qualifying period is October 1 to December 31, 2020

Eligible employers can be an individual, corporation, partnership, or trust, and must:

  • Have increased their eligible remuneration for the qualifying period compared to the base period
  • Have a permanent establishment in BC, during the qualifying period
  • Not be a public institution or registered political party

In the case of associated groups, if you are associated on December 31, 2020, you are considered an associated employer for the purposes of this credit.

Associated employers are eligible if they meet all the requirements, however, only one employer in an associated group may make a claim for an employee that is employed by one or more of the associated employers during the base and qualifying periods.

Eligible employees must report for work in BC during the base and qualifying period.

In the case of a non-arm’s length employee, they must have been an employee at the beginning of the base period in order to be considered an eligible employee.

Eligible remuneration includes payments, benefits and allowances paid to eligible employees to a maximum weekly amount of $1,129.33. The remuneration must also be paid on or before June 30, 2021 or the day on which the application is made, whichever is earlier.

Eligible remuneration should be prorated for partial weeks at the start and end of the periods.
For more details about specific inclusions and exclusions in remuneration, follow this link:
https://www2.gov.bc.ca/gov/content/covid-19/economic-recovery/increased-employment-incentive/definitions#remuneration

Calculation Example:

  • Step 1 – Calculate base period eligible remuneration = total wages July 1 to September 30, 2020 for all eligible employees (maximum of $1,129.33 per week, per employee)
  • Step 2 – Calculate qualifying period eligible remuneration = total wages October 1 to December 31, 2020 for all eligible employees (maximum of $1,129.33 per week, per employee)
  • Step 3 – Calculate Incentive credit = (Wages for qualifying period – Wages for base period) x 15%

To illustrate a calculation example, consider the following scenario. Note that for simplicity, we have assumed each period has exactly 13 weeks.

Base Period  
Weekly Pay Total Remuneration Eligible Remuneration  
Employee 1 1,500.00 19,500.00 14,681.29 *max weekly eligible earnings is $1,129.33
Employee 2 1,000.00 13,000.00 13,000.00
Employee 3 850.00 11,050.00 11,050.00
New Employee 0.00 0.00 0.00
43,550.00 38,731.29
Qualifying Period  
Weekly Pay Total Remuneration Eligible Remuneration  
Employee 1 1,500.00 19,500.00 14,681.29 *max weekly eligible earnings is $1,129.33
Employee 2 1,000.00 13,000.00 13,000.00
Employee 3 850.00 11,050.00 11,050.00
New Employee 1,200.00 15,600.00 14,681.29 *max weekly eligible earnings is $1,129.33
59,150.00 53,412.58
Increased Employment Incentive = ($53,412.58 - $38,731.29) x 15%
Increased Employment Incentive = $2,202.19

The application deadline is December 31, 2021 and can be done through your eTaxBC login or online through the BC government website.

For more information about this program and more calculation examples, you can visit the following link:
https://www2.gov.bc.ca/gov/content/covid-19/economic-recovery/increased-employment-incentive#eligible-remuneration

Written by: Laura Kristian, CPA

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