Government of Ontario, Ministry of Finance – Employer Health Tax (EHT) Exemption

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.

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).

Other Things to Note:

Due dates:

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

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