B.C. Increased Employment Incentive

The B.C. Increased Employment Incentive was a one-time refundable tax credit for employers. The deadline to apply was December 31, 2021. 

On this page

• Eligibility requirements
• Definitions
• Eligible employees
• How the credit was calculated

The Increased Employment Incentive allowed employers to apply for a one-time tax credit. The credit was 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeded the employer’s total eligible remuneration for all eligible employees in the base period.

The base period was from July 1 to September 30, 2020.

The qualifying period was from October 1 to December 31, 2020.

The credit:

• Did not have a maximum amount that an employer could claim, but a credit amount less than $10 would not be paid
• Was not reduced by any provincial or federal support you may have received, such as the B.C. training tax credits or the federal Canada Emergency Wage Subsidy (CEWS)
• Would offset any provincial tax debts an employer had outstanding at the time the credit was payable, such as the employer health tax or the provincial sales tax

Eligibility requirements

All employers, including employers who did not have to pay the employer health tax, were eligible for the credit if they:

• Increased their eligible remuneration for the qualifying period compared to the base period
• Had a permanent establishment in B.C. for the qualifying period, even if they didn’t begin to have a permanent establishment in B.C. until after September 30, 2020

Employers may be individuals, corporations, partnerships or trusts. Public institutions and registered political parties were not eligible for the credit.

Note: For the Increased Employment Incentive, charitable or non-profit employers were subject to the association rules.

Definitions

For more information about employer types, see Employer health tax.  

Eligible employees

An eligible employee was an employee of an employer who reported for work in B.C. during the base period or the qualifying period.

Report for work in B.C. means the employee either:

• Worked in person at their employer’s B.C. permanent establishment
• Was physically present in B.C. to perform their duties in B.C. and were paid from or through their employer’s B.C. permanent establishment
• Was on leave while being paid from or through their employer's B.C. permanent establishment and met one of the first two requirements above immediately before going on leave

Eligible employees included:

• Existing employees who had remained with the employer throughout both periods
• New employees that were hired in either period
• Existing employees who left in either period

An eligible employee did not include an employee who dealt with their employer at non-arm's length (e.g. an employer hiring their spouse) unless that person was an employee at the beginning of the base period.

How the credit was calculated

The credit was calculated at 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeded their total eligible remuneration for all eligible employees in the base period.

• (Total eligible remuneration for all eligible employees in the qualifying period – total eligible remuneration for all eligible employees in the base period) x 15%

Eligible remuneration

Eligible remuneration was the remuneration paid by an employer to or on behalf of an eligible employee in respect of all days in a week in the base period or the qualifying period. 

For each eligible employee, eligible remuneration must not have exceeded the maximum amount of $1,129.33 for each week. The maximum amount was prorated for partial weeks at the beginning or end of the base period or the qualifying period.

How the total eligible remuneration for each period was calculated:

1. Weekly eligible remuneration in the base period and the qualifying period for each eligible employee was determined
2. Eligible remuneration for all weeks in each period for each eligible employee was calculated
3. Eligible remuneration for all eligible employees for each period was calculated

Important: All eligible employees included newly hired employees, existing employees, and employees who left during the base period or the qualifying period.

Remuneration

Remuneration defined for the Increased Employment Incentive was different from remuneration defined for the employer health tax. For example, stock options and wages in lieu of termination notice were not included in the remuneration for the Increased Employment Incentive but are included for the employer health tax.

Remuneration included for calculating the credit amount must have been paid to or on behalf of an eligible employee on or before June 30, 2021 or before the employer applied for this credit, whichever is earlier.

Remuneration included payments, benefits or allowances that were:

• Paid to an eligible employee
• Required to be included in the income of the employee under section 5 or 6 of the Income Tax Act (Canada)
• Not listed under exclusions

Remuneration was based on when an eligible employee actually reported for work in B.C. during the base period or the qualifying period, not when the remuneration was paid.

Non-periodic payments were to be allocated to the relevant period when the work was done.

Important: If an employee did not report for work in B.C. at any time during the base period or the qualifying period, do not include any amount of remuneration that was paid to that employee in respect of the time that the employee did not report for work in B.C.

What was included and excluded from remuneration 

Included 

The terms below are similar to their definitions under the employer health tax. 

When remuneration was calculated, the following was included:

• Salaries and wages
• Bonuses, commissions and other similar payments
• Honorariums
• Advances of salaries and wages
• Vacation pay
• Gratuities or tips paid through an employer
• Other taxable allowances and benefits paid to or on behalf of an employee
• Directors’ fees
• Amounts paid by an employer to top up benefits (e.g. maternity or paternity leave)
• Employer-paid contributions to an employee’s Registered Retirement Savings Plan (RRSP)
• Employer-paid group life insurance premiums
• Employer-paid contributions to employee trusts and employee profit sharing plans

Excluded

When remuneration was calculated, the following was excluded:

• Employer-paid contributions or premiums to
  • Registered pension plan
  • Private health services plan
  • Supplementary unemployment benefit plan
  • Deferred profit sharing plan
  • Retirement compensation arrangement
• Pensions, annuities or superannuation benefits paid by employers to a retired employee
• Retiring allowances and severances
• Stock option benefits
• Wages in lieu of termination notice
• Death benefits
• Dividend income
• Contributions by an employer to a plan or trust if the value of the employer’s contribution had already been included as remuneration