If you are starting a business in BC in 2026, the election on October 24 is background noise compared with what Budget 2026 already did. For anyone starting a business in BC, campaign promises, if kept, take effect in 2027 at the earliest. The tax and payroll rules below are in force now, and they shape how you pay yourself, when you hire, and what your first equipment costs. Here are the five that matter most for a new firm, what each one costs you, and the three registrations you should complete before the campaign is even over.

Starting a business in BC: the five changes, side by side

Change In force What it means for a new business
1. Lowest personal rate 5.06% to 5.60% 2026 tax year Every dollar of salary you draw in the first bracket costs more
2. Bracket and credit indexation paused four years 2026 to 2029 Raises push you into higher effective tax even if real income is flat
3. Employer Health Tax exemption $1 million Since 2024 No EHT until payroll passes $1 million; a cliff at $1.5 million
4. Minimum wage $18.25, indexed every June Since June 2026 Budget a raise every June; five employer-paid sick days on top
5. 15% manufacturing credit; SR&ED expanded Budget 2026 Refundable help if you make things or do research; nothing if you sell services

1 and 2: how you pay yourself just got more expensive

Most people starting a business in BC in 2026 incorporate and then pay themselves a mix of salary and dividends. Two Budget 2026 changes hit that decision directly, and neither got the attention the PST did. The lowest personal rate rose from 5.06% to 5.60%, per the province's budget tax changes page. That is a half-point on the first bracket of everything you draw.

The quieter one is the four-year pause on indexing brackets and non-refundable credits. Normally the bracket thresholds rise with inflation so that a cost-of-living raise does not push you into a higher rate. Until 2029 they do not move. If you pay yourself $60,000 this year and $66,000 in two years to keep pace with rent, more of that raise is taxed at the next rate up. Nobody voted on a rate increase; the increase arrives anyway. Talk to your accountant about the salary and dividend split before your first payroll, because the answer in 2026 is different from the one in 2024.

signing incorporation documents, the first step in starting a business in bc
BC Registries needs a registered office address in the province before you file.

The small-business rate stays at 2% provincially, 11% combined, on the first $500,000 of active income. Retained earnings inside the company are taxed lightly; the cost is in taking them out.

What the election could change. The 2024 Conservative platform proposed a 1% small-business rate. No 2026 version has been published. If it appears, it would apply to 2027 income at the earliest.

3 and 4: hiring, the EHT exemption and indexed wages

Good news first for anyone starting a business in BC. Under the Employer Health Tax rules, you pay nothing until BC payroll passes $1 million. For a new business that is years away, so your first hires carry no provincial payroll tax. File the mental note for later: above $1.5 million the tax applies to the whole payroll at 1.95%, so the hire that crosses that line costs about $29,000 in tax on its own. No party has said whether it will change that cliff.

Wages are the recurring cost. Minimum wage is $18.25 as of June 2026 and rises automatically with inflation every June. Five employer-paid sick days are law, and employers can no longer demand a doctor's note for short absences. Build a June raise into every hiring plan, and price the sick days at roughly 2% of wages. Both are settled unless a party campaigns to change them, and so far none has.

Contractors are not a loophole. BC's 2024 gig-worker rules treat app-based ride-hail and delivery workers as employees for specified standards regardless of contract wording, and misclassification is a live enforcement area. If someone works your hours with your tools, plan for them as staff.

5: equipment, the PST you cannot recover, and who gets a credit

This is the number that surprises people starting a business in BC in 2026 who have run one elsewhere. BC's 7% PST applies to most business purchases, and unlike GST there is no input tax credit. The laptop, the printer, the espresso machine, the software subscription and the van all carry a 7% cost that never comes back. Business groups have asked every party for a permanent exemption on machinery and equipment. None has answered yet. Until one does, add 7% to every equipment line in your startup budget.

Two groups do get help. Budget 2026 created a temporary refundable credit of 15% on qualifying manufacturing investment by BC private corporations, up to $2 million of eligible spending and $300,000 a year. And refundable SR&ED was expanded with the provincial credit's expiry date removed, which improves cash flow for firms doing genuine research. If you are neither a manufacturer nor a researcher, the election is the only place this changes.

unboxing a laptop, printer and coffee machine, equipment that carries 7% pst when starting a business in bc
Add 7% PST to every equipment line; there is no input credit.

Equipment $20,000: add $1,400 PST you will not recover. First-year salary $60,000: lowest bracket now 5.60%, brackets frozen. First hire at $45,000: no EHT, but a June raise and five paid sick days. Professional-services PST: paused, so no 7% on your accountant and lawyer for now, and ask your candidate whether that holds.

Starting a business in BC: three registrations to finish before October 24

None of these steps in starting a business in BC depend on the election, and all of them take longer than people expect, so do them now.

Incorporate or register the business. BC Registries needs a registered and records office address in the province. Our guide to how to start a business in BC walks through the name search, the structure choice and the filing. If you do not have a commercial address yet, a virtual office in Vancouver gives you a real street address with a staffed front desk that BC Registries and CRA accept, from $30 a month, and the virtual office address format post shows exactly how to write it on the forms.

Get your CRA business number and GST account. Register for GST as soon as you expect to pass $30,000 in revenue, because you can only claim input credits from the registration date. PST registration is separate and provincial.

Apply for the City of Vancouver business licence. Fees and categories were reset for 2026 and the application asks for your business address. Our post on Vancouver business licence fees and addresses has the current numbers. City hall is elected on October 17, one week before the province, and it sets these fees.

Then vote, and ask. The full issue map for owners is in our guide to the BC election 2026 for small business, and the questions worth putting to a candidate are in 15 questions to ask your candidate. Registration and voting dates are at Elections BC.

Quick answers

Does the BC election change anything for someone starting a business in BC in 2026?

Not this year. Budget 2026 is in force and campaign promises would apply from 2027 at the earliest. The changes that affect a 2026 startup are the higher lowest personal rate, the bracket indexation pause, the EHT exemption, indexed minimum wage and the manufacturing and research credits.

What is the small-business tax rate in BC in 2026?

2% provincially, 11% combined with the federal rate, on the first $500,000 of active business income for a Canadian-controlled private corporation.

When do I start paying the Employer Health Tax?

When BC payroll passes $1 million. Between $1 million and $1.5 million it applies to the excess at a reduced rate; above $1.5 million it applies to the whole payroll at 1.95%.

Is PST charged on business equipment in BC?

Yes, at 7%, and there is no input credit. Only qualifying manufacturing investment gets a refundable credit under Budget 2026.

Can I use a virtual office as my registered office when starting a business in BC?

Yes. A staffed commercial address with a suite number is accepted by BC Registries for the registered and records office, and by CRA for your business number and GST account.