Ontario Employer Health Tax (EHT) explained
Ontario's payroll tax, and why most small employers don't owe any.
Who has to pay
Employers with a permanent establishment in Ontario who pay remuneration to employees reporting to work in Ontario, or paid from an Ontario establishment. Associated employers share one exemption.
Rates
- Payroll up to $200,000: 0.98%.
- Rates step up through payroll bands to 1.95% for payroll over $400,000.
- Eligible employers apply the rate only to payroll above their exemption.
Instalments and annual return
Employers whose annual payroll exceeds $600,000 generally pay monthly instalments. The annual EHT return is due March 15 of the following year. If your payroll is under the exemption, you usually don't need to register or file.
Frequently asked questions
What is the Employer Health Tax exemption in Ontario?
Eligible employers are exempt on the first $1 million of total Ontario remuneration per year, shared among associated employers.
When is the EHT annual return due?
March 15 of the following calendar year.
Do I pay EHT if my payroll is under $1 million?
Generally no, if you're an eligible private-sector employer. Employers with payroll over $5 million can't claim the exemption.