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Ontario Employer Health Tax (EHT) – Changes to Exemption

Published on January 6, 2014

As announced by Finance Minister Charles Sousa in the Ontario Budget presented on May 3, 2013, there are changes to the exemption for EHT effective January 1, 2014.  The previous exemption amount of $400,000 of eligible payroll will increase by $50,000 to $450,000 effective January 1, 2014.  In 2019 and every 5 years thereafter, the exemption amount will be adjusted for inflation.  Note that the exemption is available to private sector employers, organizations that receive financial assistance from the government and Crown corporations subject to Part I tax of the Income Tax Act (Canada).  Also note that the total exemption of $450,000 must be shared by an associated group of employers.

Also effective January 1, 2014, the EHT exemption will be eliminated for employers (or an associated group of employers) whose payroll exceeds $5,000,000 for the year (except for registered charities as there is no applicable threshold).