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EHT Exemption Changes Now in Effect

Attention:

  • Small Business Employers
  • Large Private-Sector Employers
  • Charities & Not-for-Profit Organizations

Employer Health Tax (EHT) of up to 1.95% is paid by employers on their Ontario payrolls. All private sector employers were exempt from paying EHT on up to $400,000 of their Ontario payrolls each year, and groups of associated employers must share the exemption.

Beginning January 1, 2014, the exemption has increased from $400,000 to $450,000 to provide greater EHT relief to the small business sector (including charities and not-for-profit organizations). This EHT relief can translate into a maximum EHT savings of $975 per year for small employers.

Also beginning January 1, 2014, the exemption will be eliminated for large private-sector employers (including groups of associated employers) with annual Ontario payrolls of over $5 million (registered charities, however, regardless of their payroll size, will continue to be eligible to claim the exemption). As a result, affected employers will pay an additional $7,800 in EHT per year.

For more information, please contact your Stern Cohen Partner or view this link on the Ontario Ministry of Finance website: http://www.fin.gov.on.ca/en/tax/eht/.