Recent changes – Social programs and benefits
1 For more information including the amounts paid by the provinces, visit the Removing the consumer carbon price from Canadian law effective April 1, 2025 page.
A taxpayer who has employees who report to work at or are attached to a permanent establishment of the taxpayer in Ontario or are paid from that establishment, must pay the employer health tax. Contributions are based on the annual payroll, as follows:
Annual payroll | Contribution rate | ||
$0 | – | $200,000 | 0.98% |
$200,000.01 | – | $400,000 | 1.101% to 1.829% |
Over $400,000 | 1.95% | ||
However, private sector employers are entitled to a health tax exemption on the first $1M of remuneration.33 The exemption has to be shared by associated employers. The contribution rate is determined based on an employer's total payroll before the exemption.
33 Threshold usually indexed every five years; next adjustment postponed to January 1, 2029 given that it was doubled from 2020 to 2028. The exemption is not available for private-sector employers with a payroll greater than $5M (including associated corporations).