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Reporting shareholder earnings
Employers report their shareholders' earnings to WorkSafeBC on two forms:
- Employer Payroll and Contract Labour Report (which all employers submit once a year)
- Employer's Remittance Form (which employers with quarterly accounts remit four times a year)
Shareholders' earnings should be included as part of the overall calculation of wages and salaries.
Active directors, shareholders, and other corporate officers should report the same gross earnings they report to the Canada Revenue Agency (CRA).
Report dividends in your calculation of shareholder earnings
The actual dividends (known as "after-tax earnings") declared to the CRA should be included in your WorkSafeBC calculation of wages and salaries if the amount represents more than 50 percent of an active shareholder's earnings.
Example to help you determine whether to include dividends in your calculation:
An active shareholder receives a T-4 for $15,000 and no other non-dividend earnings, such as management fees or stock options. The shareholder also receives a dividend of $35,000. Therefore, the total earnings for this shareholder are $50,000. In this example, the non-dividend earnings represent 30 percent of the total earnings, while the dividend earnings represent 70 percent. Since the dividend earnings are more than 50 percent of total earnings, they are assessable and should be included in the calculation of assessable payroll, up to the annual maximum. For 2006, the maximum assessable payroll is $62,400. So, in the example, the firm would include the $35,000 dividend in its calculation, making the total $50,000 in earnings assessable.