Employer Health Tax relief
At a glance
- No Condition
- Open Date : May 12, 2020
- All industries
- Government of Ontario
- Ontario Ministry of Finance
Overview
Eligibility criteria
Eligible employers can qualify for an exemption from the Employer Health Tax (EHT) if they meet specific criteria:
- Employers must be defined as eligible under the EHT Act
- Employers must pay income taxes
- Annual Ontario payroll, including associated employers, must be less than $5 million or be a registered charity
- Employers must not be under the control of any level of government
Who is eligible
Eligible employers for the Employer Health Tax (EHT) grant in Ontario include companies that are defined under the EHT Act, pay income taxes, have an annual Ontario payroll less than $5 million, or are registered charities, and are not under the control of any level of government.
- Employers as defined under the EHT Act
- Employers that pay income taxes
- Employers with an annual Ontario payroll less than $5 million
- Registered charities
Evaluation & selection criteria
There are evaluation and selection criteria for this grant. The criteria include:
- Employers are required to pay EHT on remuneration paid to employees who meet certain conditions
- Eligible employers must register for an EHT account with the Ontario Ministry of Finance
- An exemption amount is available for eligible employers based on their Ontario payroll
- Associated employers must share the tax exemption for the year and meet specific requirements
- Specific tax rates apply based on the level of Ontario payroll
How to apply
- Step 1: Determine if you are an eligible employer under the Employer Health Tax (EHT) Act.
- Step 2: Gather all necessary information about your organization including legal name, trade name, business address, Federal Business Number (BN), etc.
- Step 3: Register for an EHT account online, by phone, or in person at a ServiceOntario centre.
- Step 4: If required, enter into an agreement to share the tax exemption for the year with associated employers.
- Step 5: Keep records and books of account in compliance with the EHT Act and Regulations.
- Step 6: File EHT annual returns and payments on or before the deadline (March 15th).
- Step 7: Pay monthly instalments if your total Ontario remuneration exceeds $1.2 million for the year.
- Step 8: Request written interpretations if needed by contacting the Ministry of Finance.
Employer Health Tax (EHT) Summary:
The Employer Health Tax (EHT) is a mandatory payroll tax on remuneration paid to employees by employers in Ontario to help fund health care. The tax exemption amount is currently $1 million with rates varying based on total payroll, and penalties apply for non-compliance.
Detailed Explanation of Employer Health Tax (EHT):
The Employer Health Tax (EHT) is a payroll tax imposed on remuneration, including salaries, wages, bonuses, and benefits, provided by employers in Ontario. The tax aims to contribute revenue to support healthcare initiatives in the province.
Employers are obligated to pay EHT on remuneration to employees who work at permanent establishments in Ontario or receive payments through a local establishment. The exemption amount is set at $1 million, subject to inflation adjustments, providing relief to eligible employers.
EHT rates are tiered based on payroll amounts, with calculations factoring in exemptions before determining the tax owed. Employers exceeding the exemption threshold must register for an EHT account, file annual returns, and make payments by specific deadlines to avoid penalties.
Associated employers, registered charities, and out-of-province entities establishing permanent establishments in Ontario have specific rules to adhere to regarding EHT compliance. Monthly instalments are now required for businesses with payroll exceeding $1.2 million.
Failure to fulfill EHT obligations can result in penalties, interest charges, and potential fines, with severe consequences for non-compliance, including imprisonment for intentional tax evasion. Disputes can be addressed through formal objection and appeal processes provided by the Ministry of Finance.
Understanding monthly account summaries and navigating audit procedures are essential for employers to maintain compliance and avoid legal repercussions. Confidentiality of taxpayer information is strictly enforced under the Freedom of Information and Protection of Privacy Act.
