Section 12 – Social Programs and Benefits

Employer Health Tax – Ontario

In Ontario, employer health tax contributions are 0.98% when the total annual payroll is $200,000 or less. The rate varies from 1.101% to 1.829% for employers with payrolls from $200,001 to $400,000, and is 1.95% for other employers.

However, private sector employers are entitled to a health tax exemption on the first $450,00025 of remuneration. The exemption has to be shared by associated employers. The contribution rate is determined based on an employer’s total payroll before the exemption.

25  Amount indexed every five years since 2014. However, the exemption is not available to private sector employers with a payroll of more than $5M (including related corporations) As of January 1, 2019, it is expected that the small business deduction eligibility criteria will be used (including the federal rules on the multiplication of this deduction) to determine the entitlement to the exemption.

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