BC Taxes — Frequently Asked Questions
20 plain-language answers to the questions Canadian business owners ask RN Canada about BC Taxes.
As of 2026, British Columbia's provincial sales tax (PST) is 7%. Combined with the 5% federal GST, most goods and services in BC carry a total tax of 12%. PST and GST are separate taxes with separate rules and filings. RN Canada's sales-tax calculator computes BC's combined 12% on your transactions.
The BC Employer Health Tax is a payroll tax on BC remuneration. As of 2026, employers with payroll up to $1 million are exempt; payroll of $1M–$1.5M pays a 5.85% notch rate on the excess over $1M; payroll over $1.5M pays 1.95% on the entire amount. RN Canada's employer-payroll-cost calculator estimates your BC EHT.
As of 2026, BC EHT applies once your BC remuneration exceeds $1 million in a calendar year. Below $1M you owe nothing. Between $1M and $1.5M you pay 5.85% on the portion above $1M, and above $1.5M the 1.95% rate applies to your whole payroll. RN Canada's employer-payroll-cost calculator pinpoints your EHT threshold.
As of 2026, BC's provincial corporate tax is 2% on small-business income and 12% on general income. Adding federal tax (9% small / 15% general), the combined rates are about 11% small-business and 27% general. RN Canada's corporate-tax calculator estimates your combined BC corporate liability.
As of 2026, if BC remuneration is between $1M and $1.5M, EHT equals 5.85% multiplied by the amount of payroll above $1 million. For example, $1.2M payroll yields 5.85% × $200,000 = $11,700. This "notch" phases out the exemption. Above $1.5M, the flat 1.95% applies to all payroll. RN Canada's payroll calculator runs this for you.
As of 2026, the combined sales tax in British Columbia is 12% — 5% federal GST plus 7% provincial PST. Unlike HST provinces, BC keeps GST and PST as two separate taxes, each with its own registration, return, and exemption rules. RN Canada's sales-tax calculator computes BC's 12% and helps you separate the two filings.
As of 2026, you generally must register for BC PST if you sell or lease taxable goods, software, or certain services in BC and exceed minimal-presence thresholds, including many out-of-province sellers. PST registration is separate from GST. RN Canada handles BC PST registration and filing alongside GST through its bookkeeping and tax service.
Yes. As of 2026, BC Employer Health Tax paid is generally a deductible business expense for corporate or personal income tax, since it is a cost of employing staff. This reduces your taxable income but does not change the EHT itself. RN Canada records EHT correctly in your books to ensure the deduction is captured.
As of 2026, BC applies progressive personal income tax brackets ranging from about 5.06% on the lowest income up to roughly 20.5% provincial on the highest, layered on top of federal rates. BC's top combined marginal rate exceeds 53%. RN Canada's income-tax and take-home-pay calculators estimate your BC personal tax.
As of 2026, BC charges 7% PST and an Employer Health Tax above $1M payroll, while Alberta has neither. BC's general corporate rate (12%) is higher than Alberta's (8%), though small-business rates match at 2%. Overall Alberta is lighter for taxes. RN Canada, with offices in both, helps founders choose the right province to operate.
Often yes. As of 2026, out-of-province and online sellers that make taxable sales into BC above small thresholds must register for and collect 7% BC PST, even without a physical location in BC. Rules cover goods, software, and certain digital services. RN Canada advises sellers on BC PST registration obligations and filing.
As of 2026, once BC remuneration exceeds $1.5 million, the Employer Health Tax is 1.95% applied to the entire payroll — not just the excess. So $2M payroll yields 1.95% × $2,000,000 = $39,000. Below $1.5M, the exemption and 5.85% notch apply instead. RN Canada's employer-payroll-cost calculator models all three EHT tiers.
As of 2026, most pure professional services in BC (legal, accounting, consulting) are not subject to PST, but PST often applies to tangible goods, software, telecommunications, and certain related services. The line can be nuanced for bundled offerings. RN Canada reviews your BC revenue streams to determine which are PST-taxable.
As of 2026, BC PST filing frequency (monthly, quarterly, semi-annual, or annual) is assigned based on the amount of PST you collect, with larger collectors filing more often. Returns and payment are due by a set day after each period. RN Canada manages BC PST filing schedules so deadlines aren't missed.
Yes. As of 2026, BC offers a small-business corporate rate of 2% on active business income up to the $500,000 federal small-business limit for Canadian-controlled private corporations, with general income taxed at 12%. RN Canada's corporate-tax calculator estimates your BC liability across both tiers and plans to protect the small-business limit.
As of 2026, the BC Employer Health Tax is paid entirely by the employer based on total BC remuneration; it is not deducted from employee paycheques. This makes it a hidden cost of hiring in BC that Alberta employers don't face. RN Canada's employer-payroll-cost calculator shows the true loaded cost per BC hire.
Yes. As of 2026, associated employers in BC must share a single $1 million EHT exemption across the group, preventing a business from splitting payroll to dodge the tax. Each group allocates the exemption among members. RN Canada reviews associated-company structures to apply BC EHT correctly and avoid surprise assessments.
As of 2026, BC PST generally applies at 7% to many software purchases and subscriptions used in BC, including cloud and downloaded software, with some exemptions. This catches SaaS businesses and buyers off guard. RN Canada helps BC companies determine PST on software they buy or sell and file accordingly.
As of 2026, BC employers pay federal CPP (5.95%), CPP2 (4% on earnings $74,600–$85,000), and EI, plus the BC Employer Health Tax once payroll exceeds $1 million. BC has no separate provincial CPP. RN Canada's employer-payroll-cost calculator totals all BC employer payroll costs per employee.
As of 2026, BC allows PST refunds in specific situations — for example PST paid in error, on goods bought for resale, or on certain exempt purchases — by applying to the BC Ministry of Finance within set time limits. Documentation is required. RN Canada identifies recoverable BC PST and prepares refund applications for clients.