Effective January 1, 2014, the amount of annual Ontario payroll that may be exempt from Employer Health Tax (EHT) is increased from $400,000 to $450,000.
This exemption is eliminated for private-sector employers with annual Ontario payrolls over $5 million. Registered charities, including those with payrolls over $5 million, continue to be eligible for the exemption.
Eligible employers are exempt from EHT on the first $450,000 of total Ontario remuneration each year. This exemption will be adjusted for inflation every five years using the Ontario Consumer Price Index. Employers with annual Ontario payroll over $5 million cannot claim the exemption. Be aware that if the Company is a member of an associated group of employers, the total payroll of the group must be considered.
Only one annual exemption is available for an associated group of employers. Employers that are associated at any time during the year must take into account the total Ontario remuneration of each associated entity in determining whether they can claim the exemption. When the combined total Ontario remuneration of all the employers that are associated exceeds $5 million, these employers are not eligible for the exemption.
Jerry Paskowitz is a Partner with Sloan Partners with over 30 years experience in all tax and financial matters. Contact Jerry for an appointment to discuss tax savings opportunities and financial strategy for your business.