Employer Health Tax

Ontario's Employer Health Tax Act requires every employer to pay tax on remuneration paid to its employees and former employees. The rates of tax vary from .98% on total remuneration less than $200,000, up to 1.95% for remuneration in excess of $400,000. The tax is payable in monthly instalments or on an annual basis depending on the total Ontario remuneration.

Are there any exemptions?

In general, eligible employers are exempt from Employer Health Tax (EHT) on the first $400,000 of annual Ontario payroll. Eligible employers who are associated must allocate the exemption among members of the associated group. Public sector employers are not eligible for the tax exemption.

Do I have to pay EHT?

You have to pay EHT if you are an employer and you:

• have employees who report for work at your permanent establishment in Ontario
• pay your employees from your Ontario permanent establishment if they don't report for work at your permanent establishment, and
• have Ontario remuneration in excess of your allowable exemption amount

Do I need to register for EHT?

You need to register with the ministry if you are an employer and you are:

• not eligible for the tax exemption
• eligible for the tax exemption and your Ontario payroll exceeds your allowable exemption amount

What information do I need to register for EHT?

To register for EHT, you must provide the following information:

• legal name
• trade name
• business address
• mailing address
• telephone and fax numbers
• name of contact person or authorized representative
• payroll start date
• estimated annual payroll
• payroll frequency
• federal business number
• employer type (for example: associated, multiple account, public sector)

How do I register for EHT?

To register for EHT, you can:

• call the Ministry of Finance toll-free at 1 866 ONT-TAXS (1 866 668-8297)
• make an appointment to visit a representative at a Ministry of Finance tax office
• visit a ServiceOntario Centre to register online or visit the ServiceOntario website, or
• visit the Canada Revenue Agency website at www.businessregistration.gc.ca and register electronically

What are the tax rates?

 

Total Ontario remuneration	Rate
Up to $200,000.00	0.98%
$200,000.01 to $230,000.00	1.101%
$230,000.01 to $260,000.00	1.223%
$260,000.01 to $290,000.00	1.344%
$290,000.01 to $320,000.00	1.465%
$320,000.01 to $350,000.00	1.586%
$350,000.01 to $380,000.00	1.708%
$380,000.01 to $400,000.00	1.829%
Over $400,000.00	1.95%

• The tax rate is based on the total Ontario payroll before deducting any tax exemption.
• The tax rate for a multiple account employer is based on the combined Ontario payroll amount of all the employer's accounts.
• The tax rate for an associated employer is based on the total Ontario payroll amount of each legal entity.

Do I need to pay instalments?

Employers with annual Ontario payroll of $600,000 or less are not required to make EHT instalment payments.

Employers with a payroll exceeding $600,000 are required to pay monthly EHT instalments. Employers who are eligible for the tax exemption, and who have payroll exceeding $600,000, are not required to pay monthly instalments until after their cumulative payroll exceeds their allowable exemption amount.

Employers with an annual Ontario payroll of $600,000 or less are required to make EHT payments by March 15 of the following calendar year, with the filing of the annual return.

If your Ontario payroll for a year exceeds $600,000, you must contact the Ministry of Finance as you must start paying monthly instalments.

Where can I pay my EHT instalments?

You can pay your EHT instalments:

• online, using ONT-TAXS online
• by mail to: Ministry of Finance, 33 King Street West, PO Box 620, Oshawa ON L1H 8E9
• in person at any Ministry of Finance Tax Office (in the drop boxes provided) or at a ServiceOntario Centre
• using your financial institution's Internet banking service
• at any financial institution in Ontario (except Caisses Populaires or Credit Unions)

How do I file my annual return?

The ministry will mail you a personalized annual return. Your EHT annual return is due March 15^th of the following calendar year. If you have a special return, it is due on the 15^th of the month after the payroll was paid. If you have a final return, it is due 40 days after your business closes or the amalgamation date.

It is your responsibility to contact the Ministry of Finance if your Ontario payroll for the year exceeds your allowable exemption amount. This will ensure that annual returns are issued.

You can file your return:

• online, using ONT-TAXS online
• by mail to: Ministry of Finance, 33 King Street West, PO Box 620, Oshawa ON L1H 8E9
• in person at any Ministry of Finance Tax Office (in the drop boxes provided) or at a ServiceOntario Centre

To contact ServiceOntario:

• visit their website
• call: 416 326-1234 / 1 800 267-8097
• teletypewriter (TTY): 416 325-3408 / 1 800 268-7095
• fax: 416 325-3407

You should file an EHT annual return if you are mailed a return.

Financial Institutions are not authorized to accept or process annual, special or final EHT returns.