This provincial program is a one-time refundable tax credit for B.C. employers impacted by COVID-19.
To support businesses and encourage the rehiring of employees as the economy begins to reopen, the B.C. government introduced the Increased Employment Incentive.
The program allows employers to apply for a one-time tax credit. The credit is 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeds the employer’s total eligible remuneration for all eligible employees in the base period.
The base period is from July 1 to September 30, 2020.
The qualifying period is from October 1 to December 31, 2020.
The deadline to apply is December 31, 2021.
- Does not have a maximum amount but a credit amount less than $10 will not be paid
- Is not reduced by any provincial or federal support you may receive, such as the B.C. training tax credits or the federal Canada Emergency Wage Subsidy (CEWS)
- Will offset any provincial tax debts an employer has outstanding at the time the credit is payable, such as the employer health tax or the provincial sales tax
All employers, including employers who did not have to pay the employer health tax, are 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 are not eligible for the credit.
Indigenous businesses as described for the CEWS are not public institutions and are eligible for the credit.
Partnerships are generally eligible for the credit.
However, if interests in the partnership are held directly or indirectly by one or more entities that are public institutions (except Indigenous governments or Indigenous governing bodies) or registered political parties, their total combined interests must not exceed 50% of the fair market value of all of the interests in the partnership at any time between July 1, 2020, and December 31, 2020.
If you’re associated with one or more employers on December 31, 2020, you're an associated employer for the purpose of calculating the credit amount.
For the purposes of the increased employment incentive, charitable or non-profit employers are subject to the association rules.
Only one employer within an associated group of employers can claim the eligible remuneration for any employee if that employee is employed by more than one of the associated employers during either the base period or the qualifying period.
Calculating Your Credit
The credit is calculated at 15% of the amount that the employer’s total eligible remuneration for all eligible employees in the qualifying period exceeds their total eligible remuneration for all eligible employees in the base period.
To calculate your credit follow (A – B) X 15% where:
- A is the total eligible remuneration for all eligible employees in the qualifying period
- B is the total eligible remuneration for all eligible employees in the base period
Eligible remuneration is the remuneration paid by an employer to or on behalf of an eligible employee for the base period or the qualifying period. For each eligible employee, eligible remuneration must not exceed the maximum amount of $1,129.33 per week.
If the eligible employee did not report to 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 to work in B.C.
The maximum amount is prorated for partial weeks at the beginning or end of the base period or qualifying period.
To calculate the total eligible remuneration for each period, add the eligible remuneration of each eligible employee for each period.
For remuneration to be included in the calculation, it must be paid to or on behalf of an eligible employee on or before June 30, 2021, or before the employer applies for this credit, whichever is earlier.
This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.