British Columbia – Workers’ Compensation Assessable Earnings

On January 12, 2024, British Columbia (BC) released updated guidance setting out how assessable payroll is to be determined. There have been no policy amendments provincially, but the guidance has changed to better align with the practices of the Canada Revenue Agency.

Change to the assessable payroll practices

Assessment Practice Directive 5-245-2A replaces the Assessable earnings guide (2020)

Premiums to WorkSafeBC are paid directly by employers on a quarterly or annual frequency.

Details of the change

Previous practice permitted employers to exclude from assessable payroll certain benefits that were reported in T4 Box 14 or 71 (employment income). Starting 2024, specific inclusions and exclusions have been published to reduce the differences between WorkSafeBC payroll assessments and T4 Box 14/71 reporting. Among the changes:

• Taxable benefits reported to T4 Box 14 are to be included.

  Previously, these non-cash benefits could be excluded: “contributions or premiums for: a private health services plan, Employee counselling services, Employment insurance/disability plan, Group term life insurance premiums”

Powerpay has already released changes for the above inclusion of impacted taxable benefits. Powerpay will recalculate the assessable earnings back to January 2024, with your next run. No further action required.

For customers with the HR code (used to calculate estimated WCB premiums), YTD adjustments may be required for this code as it will not automatically adjust based on the above noted assessable earnings recalculation. Read below for information on the action you may need to take.

Additional changes

Previously, these could be excluded:

• Tuition fees reported on a T4,

  • uniform/clothing amounts,

  • personal use of a work vehicle and loan interest taxable benefits

  • disability benefits, short or long-term paid by the employer are to be included (previously LTD benefits were excluded).

• Self-funded leave amounts are to be included but the subsequent payout of those amounts during the leave is not.

• Salary continuance is to be included, but only for the remainder of year 1, after which they are to be excluded. This clarifies the previous understanding that these amounts were entirely excluded.

• Gifts, honorariums, and awards were previously included, but if they are less than $500 and of a one-time nature they are to be excluded.

• Unused sick credits are to be excluded when paid as part of termination pay.

Before the next due date, employers with BC employees must review their configurations to assess the potential impacts of these changes given their current pay codes against the current guidance.

• You must review your Payroll Setup Earnings Report. Go to the Payroll Setup Reports page. From the Reports menu, select Company Reports > Payroll Setup. to consider any additional codes that may require updating.

• If changes are required, complete the Earnings Code Request form and/or the Deduction and Contribution Code Request form as required.

Adjustments to assessable wages may be required for the first quarterly payment due in 2024, if applicable.

Important: If you are a Managed Services customer, do NOT attempt to make configuration changes. Instead submit a Support ticket to have those changes made on your behalf.