Does my Ontario business have to pay Employer Health Tax and what is the exemption threshold?

Ontario's Employer Health Tax (EHT) is a provincial payroll tax on remuneration paid to Ontario employees. Unlike CPP and EI, EHT is a provincial obligation under Ontario's Employer Health Tax Act and is paid to the Ontario government, not CRA.

Private-sector employers with annual Ontario payroll below a threshold set by the province are exempt from EHT for that year. The exemption limit has been adjusted over time and currently sits in a range worth checking on the Ontario government's website before filing, as it is indexed. Eligible charities and non-profit employers get a different (often higher) exemption amount. Once payroll exceeds the threshold the tax applies on the full amount above the exemption, at rates that increase in tiers.

EHT returns are filed annually (or monthly for larger employers), and registration with the Ministry of Finance is required once you exceed the exemption. If you are unsure whether your payroll will cross the threshold mid-year, track Ontario remuneration carefully — the obligation can arise part-way through the year.