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.
This document has been updated on August 31st, 2018 and reflects the state of the Law, including draft amendments, at that date.