BRITISH COLUMBIA

British Columbia is one of the provinces that did not harmonize its sales tax with the GST, so a sole proprietor there deals with two separate sales taxes and two administrations. BC also has its own employment standards, workers' compensation system and pay transparency rules. This page sets out what is specific to a sole proprietorship in British Columbia: registering the business name, provincial sales tax, the provincial items on the owner's tax return, and the obligations that come with hiring employees. BC's income tax brackets are on the Provincial and Territorial Tax page in the Individual section. Figures are for 2026.

REGISTERING THE BUSINESS

• Name approval first: a sole proprietor using a name other than their own legal name must first get the name approved through a name request with BC Registries and Online Services.

• Registration: once the name is approved, the proprietorship is registered with BC Registries, usually online through BC Registries' business registration service.

• Business number link: registration can be linked to the CRA business number, so the same number is used for provincial and federal accounts.

• Municipal licences: municipalities issue business licences, and some regions offer an inter-municipal business licence for mobile businesses, such as contractors, working across several neighbouring municipalities.

PROVINCIAL SALES TAX (PST)

• Separate from GST: BC charges a 7% provincial sales tax, administered by the BC Ministry of Finance, in addition to the 5% GST administered by the CRA. The two are registered for, collected and reported separately.

• Who must register: a business that sells or leases taxable goods, or provides taxable services, in BC in the ordinary course of business must register, unless it qualifies as a small seller.

• Small seller exemption: a business whose total gross revenue from taxable sales is $10,000 or less a year, and that meets the other small seller conditions, does not need to register.

• Taxable services: PST applies to some services as well as goods, including services to taxable goods (such as repairs), legal services, telecommunication services and certain software.

• No input credits: unlike GST, PST paid on business purchases generally cannot be recovered. It becomes part of the cost of the item and is deducted as an expense or added to the CCA class.

• Exemptions for resale: goods bought for resale are exempt from PST when the business gives its PST number to the supplier.

THE OWNER'S PERSONAL TAX RETURN

• BC tax: business income is taxed at BC's graduated rates on Form BC428, together with the owner's other income.

• No health premium: BC eliminated Medical Services Plan premiums in 2020, so there is no provincial health premium on the return.

• Credits: provincial credits, such as the BC tax reduction for people with lower incomes, are claimed on Form BC428 and the related BC schedules.

HIRING EMPLOYEES IN BC

• Minimum wage: $18.25 an hour since June 1, 2026.

• WorkSafeBC: employers must register with WorkSafeBC before hiring their first worker. Sole proprietors without workers are not automatically covered but can buy Personal Optional Protection for themselves.

• Employer Health Tax: a payroll tax that applies only to employers whose total BC remuneration exceeds the exemption threshold of $1 million, so most small proprietorships do not pay it.

• Hours and overtime: under the Employment Standards Act, overtime is paid at 1.5 times pay after 8 hours in a day or 40 hours in a week, and at double time after 12 hours in a day.

• Vacation and holidays: two weeks of vacation and 4% vacation pay after one year, rising to three weeks and 6% after five years, and statutory holiday pay for 11 statutory holidays.

• Paid sick leave: employees with at least 90 days of service are entitled to five days of paid sick leave a year.

• Pay transparency: every employer must include the expected pay or pay range in publicly advertised job postings, and cannot ask applicants about their pay history.

KEY POINTS

• Name request first: then register the proprietorship with BC Registries.

• Two sales taxes: 5% GST to the CRA and 7% PST to the BC Ministry of Finance, with no input credits for PST.

• No health premium: MSP premiums were eliminated in 2020.

• First employee: WorkSafeBC registration, BC minimum wage, daily overtime and paid sick leave.

SOURCES

• BC Registries and Online Services: name requests and registering a sole proprietorship.

• BC Ministry of Finance: Provincial Sales Tax registration and small seller exemption; Employer Health Tax.

• British Columbia: Employment Standards Act; Pay Transparency Act; minimum wage effective June 1, 2026.

• WorkSafeBC: registering as an employer and Personal Optional Protection.