BC Payroll Deductions 2026: Complete Employer Guide

British Columbia Payroll Overview

British Columbia is Canada's third-most populous province, home to Vancouver and Victoria. Understanding BC payroll requirements is essential for employers in the province.

2026 BC Provincial Tax Brackets

BC has 7 tax brackets - one of the most graduated systems in Canada:

| Taxable Income | Tax Rate | |----------------|----------| | $0 - $49,279 | 5.06% | | $49,279 - $98,560 | 7.70% | | $98,560 - $113,158 | 10.50% | | $113,158 - $137,407 | 12.29% | | $137,407 - $186,306 | 14.70% | | $186,306 - $259,829 | 16.80% | | Over $259,829 | 20.50% |

BC Basic Personal Amount (2026): $12,932

BC vs. Other Provinces

BC's starting rate (5.06%) is among the lowest in Canada, but rates climb quickly:

| Income Level | BC Rate | Ontario Rate | Alberta Rate | |-------------|---------|--------------|--------------| | $50,000 | 5.06-7.70% | 5.05-9.15% | 10% | | $100,000 | 10.50% | 9.15-11.16% | 10% | | $200,000 | 16.80% | 12.16% | 12% | | $300,000 | 20.50% | 13.16% | 15% |

BC is competitive at lower incomes but has higher rates for high earners.

MSP (Medical Services Plan)

Good news: BC eliminated MSP premiums in 2020. There's no longer any health premium deduction from employee pay.

Employer Health Tax

However, BC now has an Employer Health Tax (EHT):

| BC Payroll | EHT Rate | |------------|----------| | Up to $500,000 | Exempt | | $500,000 - $1,500,000 | Graduated (2.925% on amount over $500K) | | Over $1,500,000 | 1.95% on total payroll |

Most small businesses under $500K payroll pay nothing.

Required BC Payroll Deductions

Every BC pay stub must include:

Federal Deductions

CPP - 5.95% (max $4,034.10/year)
EI - 1.64% (max $1,077.48/year)
Federal Income Tax - Based on federal brackets

Provincial Deductions

BC Provincial Tax - Based on brackets above

No BC-Specific Employee Deductions

Unlike Quebec with QPIP, BC has no additional mandatory employee deductions beyond standard CPP, EI, and income taxes.

BC Employment Standards

Minimum Wage (2026)

$17.40/hour (one of the highest in Canada)

Overtime

After 8 hours/day: 1.5× rate
After 12 hours/day: 2× rate
After 40 hours/week: 1.5× rate

BC has both daily AND weekly overtime thresholds.

Statutory Holidays

BC has 10 statutory holidays including:

Family Day (February)
BC Day (August)

Vacation Entitlement

2 weeks (4%) after 1 year
3 weeks (6%) after 5 years

Vancouver-Specific Considerations

Employers in Metro Vancouver should note:

TransLink Employers Payroll Tax: 1.98% on employers with >$500K payroll
Higher cost of living affects salary expectations
Competitive tech market drives compensation

Victoria & Island Considerations

Provincial government jobs are major employer
Tourism industry has seasonal variations
Lower payroll tax threshold may apply differently

BC Pay Stub Requirements

BC's Employment Standards Act requires pay statements showing:

Pay period
Wage rate
Hours worked (regular and OT)
Deductions itemized
Gross and net wages

Common BC Payroll Mistakes

1. Missing Daily Overtime

BC has daily overtime after 8 hours, not just weekly. Track both!

2. Forgetting Statutory Holiday Pay

Employees eligible from day one in BC (unlike some provinces requiring 30 days).

3. Incorrect Vacation Calculation

BC requires vacation on ALL wages, including overtime.

4. Not Tracking Banked Overtime

BC allows OT banking by written agreement. Track carefully.

BC Sales Tax (PST)

While not a payroll issue, BC has:

7% Provincial Sales Tax (PST)
5% GST
12% total (not combined HST)

This doesn't affect payroll but impacts employee purchasing power.

Using PaystubPRO for BC

Our system handles all BC requirements:

✅ All 7 BC tax brackets
✅ Correct basic personal amount
✅ Daily and weekly overtime tracking
✅ CPP/EI at federal rates
✅ ESA-compliant pay stub format

Create your BC pay stub in 2 minutes - first one FREE!

Summary

BC payroll is straightforward once you understand:

The 7-bracket tax system
Daily AND weekly overtime rules
No MSP premiums (eliminated 2020)
Employer Health Tax for larger employers

PaystubPRO makes BC payroll easy. Try it today!