ERP and accounting software for British Columbia: 7% PST

British Columbia compliance in one view

A British Columbia business charges 5% GST and, on taxable goods, software and certain services, a separate 7% provincial sales tax; it files GST with the CRA and PST with the B.C. Ministry of Finance, pays Employer Health Tax above 1 million dollars of payroll and holds WorkSafeBC coverage. It matters because BC runs a true two-tax system in which the provincial tax is never recoverable.

British Columbia runs a separate provincial sales tax, so PST has its own registration number, its own return and its own rules on what is taxable. The CRA still administers GST, income tax and payroll deductions. The Ministry of Finance administers PST, the Municipal and Regional District Tax on accommodation, and the Employer Health Tax, all through the eTaxBC online service. WorkSafeBC provides workplace insurance.

For the national system of thirteen jurisdictions, the T2 and T4 calendar and the IFRS or ASPE choice, see our Canada page. This page covers what is specific to British Columbia.

• GST 5%: CRA, on the federal GST/HST return
• PST 7% general rate: B.C. Ministry of Finance, filed on eTaxBC
• PST 10% on liquor; 8% on short-term accommodation
• Employer Health Tax: B.C. payroll over 1 million dollars
• Workplace insurance: WorkSafeBC

GST and PST on one invoice

With limited exceptions, PST is charged on the price of taxable goods and services before GST is added, and GST is charged on the price without the PST. The two are calculated side by side, never one on top of the other. A Vancouver supplier selling 2,000 dollars of taxable equipment to a Surrey business charges 5% GST of 100 dollars and 7% PST of 140 dollars, for an invoice total of 2,240 dollars.

The general 7% rate covers most goods, including cannabis products, soda beverages and tobacco, as well as software, legal services, online marketplace services and telecommunication services. Liquor carries 10% and short-term accommodation 8%. Some energy products carry a separate 0.4% ICE Fund tax, which is reported on the PST return and on which neither PST nor GST is charged. Design and consulting services are generally not taxable unless they include taxable goods, software or services.

PST becomes payable when the price, or any part of it, is paid or becomes due, whichever is earlier, and it applies to sales outside the ordinary course of business too, such as the sale of a used company vehicle or office furniture. A system that only applies tax to inventory items will miss these.

• Taxable equipment, price before tax: 2,000.00
• GST 5% on 2,000: 100.00
• PST 7% on 2,000: 140.00
• Invoice total: 2,240.00

PST is a cost: self-assessment and a worked entry

B.C. says it plainly: unlike the GST/HST, there are no PST input tax credits on goods purchased by a business. When a business buys taxable goods, software or services for its own use, it is the end user and pays PST as part of the cost. If the supplier does not charge PST, for example an out-of-province vendor, the buyer must self-assess the PST due and pay it on its own PST return. Goods bought for resale are generally exempt, which is why a reseller quotes its PST number to suppliers.

The accounting consequence is that GST and PST on purchases go to different places. A Burnaby firm buys a 10,000 dollar machine from a B.C. dealer and is charged 500 dollars GST and 700 dollars PST. The GST is recoverable as an input tax credit; the PST is capitalised into the machine and depreciated with it.

Collectors who are registered and remit PST on time are entitled to a small commission for each reporting period, which is booked as income or as a reduction of PST expense. A collector with several PST accounts can claim commission on only one of them, and no commission is available on MRDT returns.

• Dr Machinery (cost including PST) 10,700
• Dr GST recoverable (input tax credit) 500
• Cr Accounts payable 11,200
• Supplier did not charge PST: self-assess on your PST return

Registration, small sellers and filing on eTaxBC

A business located in B.C. must register to collect PST if, in the ordinary course of business in B.C., it sells or leases taxable goods, provides software, provides taxable services such as legal or telecommunication services, provides online marketplace services, or sells accommodation other than solely through an online marketplace facilitator. A business located outside B.C. that makes sales to B.C. customers may also have to register, and online marketplace facilitators collect on behalf of their sellers.

The main exception is the small seller. A business that does not sell from an established commercial premises, with 10,000 dollars or less of gross revenue from retail sales of eligible goods, software and services in the previous 12 months, and an estimate of 10,000 dollars or less for the next 12 months, may not need to register. A small seller then pays PST on its own purchases, including goods for resale, and does not charge PST on its sales.

PST returns and payment are due no later than the last day of the month following the reporting period, so a period ending 30 June is due by 31 July. MRDT is reported on a separate MRDT return, not the PST return, although one payment may cover both. Accommodation providers in the City of Vancouver must file their MRDT returns, including the Major Events MRDT, through eTaxBC; paper returns are not accepted.

Software, SaaS and the paused professional services expansion

British Columbia taxes software broadly. Software for PST purposes includes application and system software, mobile apps, software as a service such as an online word processor used through a browser, and infrastructure as a service such as virtual processors or remote storage. PST applies when the software is purchased for use, or used, on or through a device ordinarily situated in B.C. A stationary device is situated where it is located, so a Toronto-billed company pays B.C. PST on software for desktops in its Vancouver office; a mobile device generally follows its billing address, or its assigned area code where the billing address does not reflect its location.

For a software or cloud vendor this becomes a data problem: the invoice must carry the location of the customer's devices, not just the billing address, and a vendor that does not charge PST because the device is outside B.C. must keep evidence showing why. For a buyer, cloud subscriptions from foreign vendors that do not charge PST must be self-assessed.

The base was due to widen again. On 18 September 2026 the Province announced that it is pausing, through a temporary regulation, the expansion of PST to professional services that had been scheduled for 1 October 2026. As a result, accounting and bookkeeping, architectural, geoscience and engineering services, non-residential real estate commissions and services, and security and private investigation services remain exempt from PST, as of September 2026. Businesses that had registered for PST only because of that expansion are told to cancel the account through eTaxBC.

Employer Health Tax and WorkSafeBC

The B.C. Employer Health Tax is separate from source deductions. Employers whose B.C. remuneration in a calendar year exceeds the 1 million dollar exemption must register. Payroll of 1 million dollars or less pays nothing. Between 1,000,000.01 and 1,500,000 dollars, a notch rate of 5.85% applies to the amount above 1 million dollars. Above 1.5 million dollars the exemption falls away entirely and the rate is 1.95% of total B.C. remuneration. Charitable and non-profit employers have their own thresholds.

The province's worked examples show how steep the notch is. An employer with 1,200,000 dollars of B.C. remuneration pays 5.85% x 200,000 = 11,700 dollars. An employer with 1,550,000 dollars pays 1.95% x 1,550,000 = 30,225 dollars. A 350,000 dollar increase in payroll between the two raises the tax by 18,525 dollars, which is why growing employers budget for EHT as they approach 1.5 million dollars.

WorkSafeBC coverage is legally required for all employers unless they are exempt, and an employer for this purpose includes a sole proprietor, partnership, corporation or society that hires workers or unregistered subcontractors. Premiums are based on assessable payroll and the employer's classification, so WorkSafeBC assessable earnings, the EHT base and the T4 totals should all reconcile to the payroll ledger.

• B.C. remuneration 1,000,000 or less: no EHT
• 1,200,000: 5.85% x 200,000 = 11,700
• 1,550,000: 1.95% x 1,550,000 = 30,225

Company law: waiving the audit and the statements

British Columbia's Business Corporations Act sets its own rule on audit. Section 203 requires a company to have an auditor, but if all of the shareholders, whether or not their shares otherwise carry the right to vote, resolve by unanimous resolution to waive the appointment of an auditor, the company need not appoint one. The waiver may be given before, on or after the date an auditor would be required, and it is effective for one financial year only.

Section 200 goes further than most Canadian statutes: all shareholders may, by unanimous resolution, waive the directors' obligation to produce and publish financial statements at all. Owner-managed companies often use both waivers, but the company still needs full books for its T2 return, its GST and PST returns and its lenders, and records must be kept for the CRA's six-year period in Canada unless the CRA permits otherwise.

Cities and regions: where the rules differ

GST, PST and the Employer Health Tax are province-wide, so a business in Vancouver, Surrey, Burnaby, Richmond, Victoria, Kelowna, Abbotsford, Coquitlam, Kamloops or Nanaimo charges the same 5% and 7% on the same goods, software and services.

Local variation comes through accommodation. The Municipal and Regional District Tax of up to 3% is collected only in participating municipalities, regional districts and other eligible entities, on behalf of those communities, to fund local tourism, so a hotel group with properties in Victoria, Kelowna and a non-participating area applies different rates at each. In the City of Vancouver the additional Major Events MRDT of 2.5% applies from 1 February 2023 until 31 January 2030, on top of 8% PST and 3% MRDT. Software vendors meet a different kind of geography: where a mobile device's billing address does not show where it is used, the assigned area code, such as 250, 604, 778 or 236, is one of the ways to decide whether the device is ordinarily situated in the province.

How Skyline Nexus ERP handles British Columbia requirements

Skyline Nexus ERP is a cloud ERP with a double-entry general ledger under Fiscal Authority. Tax rates can be combined into a tax group of sub-taxes, so a B.C. sale can carry 5% GST and 7% PST as two separate tax lines, and other rates, such as 10% on liquor or 8% on accommodation, can be set up as rates of their own. When auto-posting is on, final sales, purchases, payments and expenses post balanced journals in the background, and the VAT Return screen prefills tax-exclusive bases and tax for a date range and location, which your bookkeeper uses for the CRA GST return and the eTaxBC PST return. Expense categories map to their own GL expense accounts, and the ledger's VAT settings name the input and output tax accounts, so how non-recoverable PST on purchases is posted should be agreed during set-up.

Each B.C. site can be a business location with its own invoice numbering, stock and user access, and the trial balance, profit and loss and balance sheet filter by location. The Asset Management module depreciates machinery by straight line, declining balance, sum of years digits or units of production, so PST capitalised into an asset is expensed with it. Cost centres and Budget vs Actual let a growing employer track payroll levies such as the Employer Health Tax against plan.

Points to plan for. Canadian payroll, including CRA source deductions, T4 slips, Records of Employment, the Employer Health Tax and WorkSafeBC reporting, is part of the Canadian roll-out rather than live today; until your go-live, run payroll in a Canadian payroll service and post its journal. Tax rates carry no effective-date history, so a future change to the PST base or rates is handled by creating the new rate on the day. MRDT, reported on its own return, is best set up as its own tax rate, with its ledger treatment agreed during set-up.

Rates, regimes and deadlines in this summary change, and many countries are actively legislating on e-invoicing. This is general information, not tax or legal advice — confirm the current position with the authority named above or with your tax adviser before you rely on it.