Options for Provincial Medical Liability Processing
Here are a few things you must look at to understand Provincial medical liability processing for Canada.
Rate Retrieval
You can use one of these rates for processing provincial medical liability:
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The rate associated with the default Provincial Medical Account Number for employee's province of employment.
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The rate associated with the Provincial Medical Account Number Override you enter at the Location, or Department levels.
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The rate associated with Provincial Medical Account Number Override on the assignment.
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If no rates are defined at the payroll statutory unit (PSU) level, then no provincial medical liability is calculated.
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When defining overrides, you must specify the PSU and province first, as this presents the account specific to that province.
Calculation of Liability
The employer liability is calculated as a percentage of the provincial medical subject wages for a period, less the exemption amount, if applicable. The liability is calculated in the report, except for Quebec, which is calculated within the payroll run. The period is specified by the Starting Payment Date and Ending Payment Date. The liability is based on the rates and the thresholds defined by you at the PSU level. The thresholds are dependent on the annual provincial medical subject wages year-to-date.
British Columbia Employer Health Tax (EHT)
EHT is a British Columbia Health Tax payable by employers whose annual remuneration exceeds a predetermined exemption threshold. Employers are required to pay EHT on the annual subject wages paid to British Columbia employees. The exemption may be shared across associated groups of employers.
The amount of EHT payable is calculated by multiplying the British Columbia Provincial Medical subject balance by the rates entered on the PSU. The rate varies based on the total annual subject wages for the current year.
The Liability for EHT is calculated as either one of the following:
- In the Provincial Medical Report. This is the default option.
- In the payroll run
To calculate the provincial medical employer liability for British Columbia in the payroll run select the Calculate liability in payroll run option for each province while configuring the PSU.
To continue to calculate the liability in the Provincial Medical Report, leave the option deselected. This is the default.
If you select the option to calculate the liability in the payroll run, the following applies:
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Related balances are available in the Statement of Earnings, balance view, element entries, and so on.
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The Provincial Medical Liability results element will include provincial medical account information.
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The element is available for costing.
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The employer liability will appear on global reports.
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The Provincial Medical report doesn't produce any output.
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As the calculation is processed for each employee, there may be rounding differences when compared with the liability calculated using total wages for the province, as processed in the Provincial Medical Report.
Manitoba Health and Post Secondary Education Tax
Health and Post Secondary Education Tax (HAPSET) is a Manitoba tax payable by employers whose annual remuneration exceeds a predetermined exemption threshold. Employers are required to pay HAPSET on the annual subject wages paid to Manitoba employees.
The amount of HAPSET payable is calculated by multiplying the Manitoba Provincial Medical subject balance by the rates entered on the PSU. The liability is calculated in the Provincial Medical Report.
The Liability for HAPSET is calculated as either one of the following:
- In the Provincial Medical Report. This is the default option.
- In the payroll run
To calculate the provincial medical employer liability for Manitoba in the payroll run select the Calculate liability in payroll run option for each province while configuring the PSU.
To continue to calculate the liability in the Provincial Medical Report, leave the option deselected. This is the default.
If you select the option to calculate the liability in the payroll run, the following applies:
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Related balances are available in the Statement of Earnings, balance view, element entries, and so on.
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The Provincial Medical Liability results element will include provincial medical account information.
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The element is available for costing.
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The employer liability will appear on global reports.
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The Provincial Medical report doesn't produce any output.
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As the calculation is processed for each employee, there may be rounding differences when compared with the liability calculated using total wages for the province, as processed in the Provincial Medical Report.
Ontario Employer Health Tax
Employer Health Tax (EHT) is an Ontario payroll tax for health insurance premiums that's paid by the employer. Employers are required to pay EHT on the annual subject wages paid to Ontario employees less the annual exemption, if applicable. The amount of EHT payable is calculated by multiplying the Ontario Provincial Medical subject balance by the provincial medical rates entered on the PSU. By default, the liability is calculated in the Provincial Medical Report.
You can optionally generate the Ontario EHT as an employer liability in the payroll run by configuring the option for the payroll statutory unit. Employers who don't qualify for the EHT exemption and therefore have only one rate set up, may choose to calculate the EHT liability in the payroll run.
Use the Manage Legal Entity HCM Information task in the Setup and Maintenance work area to define the provincial medical account and the related information at the PSU level. To calculate the liability in the payroll run, select the Calculate liability in payroll run check box for the PSU for Ontario.
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You can only configure this option if there is no exemption for the account. Each account must contain only one rate or you will receive an error if you attempt to select this option.
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You can configure different rates for different effective dates.
By default the check box is left deselected and the liability is calculated in the Provincial Medical Report.
Selecting the option to calculate liability in the payroll run, triggers these actions:
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Related balances are available in the SOE, balance view, element entries, and so on.
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The Provincial Medical Liability results element will now include Ontario EHT account information.
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The element is available for costing.
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The employer liability is displayed in the relevant reports.
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The account is excluded from the Provincial Medical Report.
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Since the calculation is now processed for each employee, there may be rounding differences when compared with the liability calculated using total wages for the province, as processed in the Provincial Medical Report.
Quebec Health Services Fund Rate
The Quebec Health Services Fund Rate is assigned by Revenu Quèbec. Employers are required to pay the Quebec Health Services Fund amount on the annual subject wages paid to their employees.
The amount of Quebec Health Services Fund payable is calculated by multiplying the Quebec Provincial Medical subject balance by the rates entered on the PSU. The liability for the Quebec Health Services fund is calculated during the payroll run. It's calculated as a straight percentage of earnings without any exemptions or thresholds.
Newfoundland and Labrador HAPSET Rate
Employers are required to pay Newfoundland and Labrador HAPSET on the annual subject wages paid to employees in that province. The exemption is shared across associated groups of employers.
The amount of HAPSET payable is calculated by multiplying the Newfoundland and Labrador Provincial Medical subject balance by the rates entered on the PSU. The liability is calculated in the Provincial Medical Report.
Wage Basis Rules
These balances are created and tracked for provincial medical:
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Provincial Medical Gross that represents the gross earnings paid to employees in the province.
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Provincial Medical Subject that represents:
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The earnings taken into consideration when determining the amount used to calculate the provincial medical liability.
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Provincial Medical Gross minus the Provincial Medical Exempt balances.
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Provincial Medical Exempt represents wages that are exempt from the wage basis rules, or wages that have been exempted from provincial medical at the assignment.