Discussion Paper - Inclusion of Principals’ Dividends in Assessable Payroll Consultation
Principals of some companies do not pay themselves for labour through the company’s payroll. Instead, they take dividends from the company’s profits as payment for their labour.
Policy provided that WorkSafeBC may include dividends in assessable payroll where they represented payment for services provided by active principals. However, it was difficult to determine what portion of dividends represented payment for a principal’s activity in a company, and policy provided no guidance on how to do so.
At issue was whether to assess dividends, and if so, how to include them in assessable payroll.
Consultation closed June 19, 2009.