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 $1M of remuneration19. The exemption has to be shared by associated employers. The contribution rate is determined based on an employer’s total payroll before the exemption.
19 Threshold usually indexed every five years; next adjustment postponed to January 1, 2029 given that it was doubled in 2020. 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 August 1, 2021 and reflects the status of legislation, including proposed amendments at this date.