News and Insights

Ontario Increases Employer Health Tax Exemption and Installment Threshold

Tax Development Nov 09, 2020

Ontario recently released the publication, Employer Health Tax Changes for 2021 – Tax Bulletin, which indicates the Ontario government has permanently increased the Employer Health Tax (EHT) exemption, from $490,000 to $1 million. This exemption increase will reduce the number of employers obligated to pay EHT by about 30,000 or 90% and is expected to result in savings of $360 million for Ontario’s small businesses. It should be noted that employers with total Ontario remuneration exceeding $5 million are not eligible for the increased exemption as they do not qualify for exemption from the EHT.

In addition, the government has increased the installment threshold from $600,000 to $1.2 million. This change to the installment threshold is available to all businesses in Ontario.