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 $1,000,000 of remuneration in 202021. The exemption has to be shared by associated employers. The contribution rate is determined based on an employer’s total payroll before the exemption.
21 Amount temporarily increased for 2020 due to the COVID-19 crisis (the previous threshold of $490,000 will be brought back on January 1, 2021). Amount indexed every five years. The exemption is not available for private-sector employers with a payroll greater than $5M (including associated corporations).
This document is up to date as of September 3, 2020 and reflects the status of legislation, including proposed amendments at this date.