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Determining net long-term average earnings
Federal and provincial income tax
To establish a long-term wage rate, individual aspects of a worker's tax situation are considered. WorkSafeBC considers the following in determining the probable federal and provincial income tax payable:
(a) tax credits based on basic personal amounts
(b) credits for the probable CPP contributions and EI premiums payable for the worker's average earnings
(c) spousal credit/wholly dependent person credit
(d) infirm dependant credit.
WorkSafeBC will not deduct probable taxes where the worker is not required to pay income tax. The above deductions are collectively referred to as individualized allowable deductions. However, they do not completely take into consideration the worker's actual tax status. No other income deductions which the worker might have declared for tax purposes may be considered for the purposes of the establishing long-term average net earnings. Also, when using income tax credits for dependants, it is assumed that the dependants have no income, therefore, the full credit is allowed.
EI premiums and CPP contributions
Workers exempt from, or ineligible for, EI or CPP would not have these amounts deducted.