Employer Health Tax (EHT) – Ontario

January 9, 2014 Published by
Post Categories: Tax Accounting

On December 12, 2013 Bill 105, an Act to amend the Employer Health Tax Act, received Employer health taxRoyal Assent. Below is a summary of the amendments to the Employer Health Tax Act which are effective January 1, 2014:

  • Amount of annual payroll that is exempt from EHT is increased from $400,000 to $450,000 for the 2014 to 2018 calendar years;
  • Commencing in 2019 the exemption is adjusted for inflation every five years;
  • New subsection 2.1(7) of the Act provides for an exemption threshold of $5 million;
  • Eligible employers with annual Ontario payroll over $5 million are not allowed to claim the exemption;
  • As before, only one annual exemption is available for an associated group of employers;
  • However, if the combined total Ontario remuneration of all associated employers exceeds $5 million, none of the employers are eligible to claim the exemption;
  • Eligible employers that are registered charities may claim the exemption regardless of the amount of their payroll;
  • An employer that is associated with a registered charity is not required to include the payroll of the charity in determining the $5 million threshold.