WCB Alberta Premium Payments 2020 and 2021
In March 2020, the Alberta government announced new measures to provide immediate financial relief to private sector employers in direct response to the COVID-19 pandemic. This included:
- Premium payments for 2020 deferred until 2021
- Refund of any 2020 premiums paid
- 50% of 2020 premiums waived for small and medium sized private sector employers once invoicing resumes in 2021
- No interest charged on unpaid 2020 premiums
While this has provided much welcome assistance for employers struggling to figure out how to navigate these uncertain times, a reckoning is rapidly approaching and employers need to start preparing now for when WCB Premium invoicing resumes in 2021.
Employers will still be required to report their actual assessable earnings for 2020 plus their estimated assessable earnings for 2021 by February 28, 2021. Employers that took advantage of the Canadian Emergency Wage Subsidy (CEWS) will have to remember to include the applicable amounts in the actual assessable earnings they report for 2020. More information about CEWS and how it applies to annual reporting can be found here.
How will WCB premiums be calculated in 2021?
Invoicing for 2021 will be calculated using the actual assessable earnings for 2020 and the estimated assessable earnings for 2021. Since 2020 premiums payments were deferred and any payments made prior to the deferral were refunded, the usual premium adjustments for 2020 will not be necessary.
Small and medium sized private sector employers with $10 million or less in assessable earnings for 2020 will have 50% of their premiums waived. Therefore, these employers will be invoiced for 50% of their 2020 premiums plus 100% of their estimated premiums for 2021.
For private sector employers with greater than $10 million in assessable earnings, 2020 WCB premiums were deferred in their entirety to 2021 and no premium waivers for 2020 have been offered. Therefore 100% of their 2020 and 2021 premiums will be due in 2021.
Employers whose assessable earnings in 2020 were close to the $10 million mark should pay close attention to their actual assessable earnings for 2020, as that may impact whether or not they are eligible for the 50% premium waiver.
Additional information on WCB Rate Setting can be found here.
What does this mean for employers?
While this may result in a significant financial break for small and medium sized employers, it still means that premium payments in 2021 will likely be higher than usual, given that employers will be paying their 2020 premiums at the same time.
For large employers, their assessed 2020 premiums may be less than what was estimated prior to the pandemic but since they will be invoiced in 2021 for 2 full years of premiums, the financial hit could be substantial.
With the impact that COVID-19 has had on the economy and specifically employee wages, 2020 actual assessable earnings for any organization may be considerably less than what was originally estimated. Additionally, estimated assessable earnings for 2021 may also be substantially less than what was estimated pre-pandemic and the resulting 2021 WCB premium invoicing may not be as frightening as being charged 2 years of premiums.
Regardless of the size of the organization, WCB premium payments need to be factored into 2021 budget forecasts.
- If you paid any WCB premiums in 2020, ensure that you have received a refund.
- If you took advantage of CEWS to help pay your employees, ensure that you report the appropriate amounts when filing your actual assessable earnings for 2020.
- Make sure you are adequately budgeting for your combined premiums in 2021.
As always, we are available to answer your questions and/or address your concerns to the best of our ability. You can reach us directly at BCL.Calgary@bclconsulting.ca , BCL.Edmonton@bclconsulting.ca, by phone at 1-844-377-9545 or you can connect with us on Facebook, Twitter, or LinkedIn.