Amount:

No Fixed Amount

Type of Program:

Tax Refund


Description:

The employer health tax program exempts employers from paying Employer Health Tax on the first $450,000 of annual payments.
Employer Health Tax (EHT) is a payroll tax on remuneration paid to employees and former employees. The EHT rates vary from 0.98% on Ontario payroll less than $200,000, up to 1.95% for payroll in excess of $400,000.

Comments on Funding:

The Ontario government has increased the EHT exemption for 2020 from $490,000 to $1 million due to the special circumstances caused by the coronavirus (COVID‑19) in Ontario.
The EHT rates vary from 0.98% on Ontario payroll less than $200,000, up to 1.95% for payroll in excess of $400,000.


When It Ends:

Ongoing

Deadline:

March 15th

Eligibility:

Applicants must:

  • be employers that pay Employer Health Tax on the total Ontario remuneration paid to employees and former employees who: 
  • report for work at a permanent establishment of the employer in Ontario;
  • do not report for work at any permanent establishment of the employer, but are paid from the employer's permanent establishment in Ontario.
  • be private-sector employers with annual Ontario payrolls (including the payroll of any associated employers) under $5 million.
  • be organizations that receive financial assistance from any level of government but are not under the control of government. Eligible employers who are registered charities can claim the exemption even if their payroll exceeds $5 million.
  • Crown corporations subject to tax under Part I of the Income Tax Act (Canada).

Applications Steps:

1

The Ministry of Finance will mail you a personalized annual return. If appicants did not receive a return, they should contact the Ministry of Finance. Applicants should also contact the ministry when their Ontario payroll for the year exceeds their allowable exemption amount.

2

Applicants must complete the annual return and send it to the ministry, even if no EHT is payable. Once you submit a nil return, the ministry will stop sending you annual returns automatically. Applicants can also file their return online, using ONT-TAXS online.

3

Starting in the 2021 tax year, employers with total Ontario remuneration in excess of $1.2 million must remit monthly instalments. Otherwise, they do not have to pay monthly instalments and can make their EHT payment with their annual return.

Other Things to Note:

Due dates:

  1. 1
    Annual returns are due March 15th of the following calendar year.
  2. 2
    Special returns are due on the 15th of the month after the payroll was paid.
  3. 3
    Final returns are due 40 days after your business closes or the amalgamation date.

About the author 

Maurice

Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Ontario to identify and maximize government grants to grow their business.
Click here to learn more about Moe's background and how he can help your business.

Tags

You may also like

Research and Development Grants for Ontario Businesses (2021): 23 Government Incentives to Boost Your R&D

Research and Development Grants for Ontario Businesses (2021): 23 Government Incentives to Boost Your R&D
Success message!
Warning message!
Error message!