British Columbia Payroll Instructions

2023 British Columbia Payroll Info

British Columbia uses a 'step' table for income tax withholding calculations. Tax withholding tables and formulas changed in 2023 (the steps are indexed for inflation every year). The BC calculation uses an additional credit table, which is automatically included in the payroll import.

Employee Dependents

Enter the number of employee dependents into the Local Exemptions field in each employee’s account record.

British Columbia Provincial LCP

The LCP program has been restored, although most employees probably will not use it.

If your employees take a deduction for the labour-sponsored funds annual provincial tax credit (LCP), create a tax item for their LCP credit. To do so, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items.
  2. Click the New button.
  3. Call the Tax Item "LCP credit" plus the employee's name.
  4. Click on the Calculation Method popup field and choose Direct Dollars.
  5. Type in the amount of the credit-- take the lesser of $2000 or 15% of the purchase value of approved shares of labour-sponsored venture capital corporation stock, and d ivide it by the number of pay periods.
  6. Click on the Tax Type popup field and choose Employee Credit.
  7. Click OK.

You'll also need to assign the credit to the employee. follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Packages.
  2. Click the New button.
  3. Put a checkmark next to each tax that applies to this employee (including the British Columbia LCP).
  4. Click OK.
  5. Open the Payroll tab on the left, and choose Employees.
  6. Locate the employee's record.
  7. Click the Payroll Setup button.
  8. Enter the tax package that you just created into the Tax Package field.
  9. Click OK.

If two or more employees use different amounts for LCP, each one will require a separate tax item with the correct amount, and a tax package that includes their deduction.