Taxes

Employer Health Tax is a payroll tax (payable by employers) on remuneration paid to employees:

• reporting for work at a permanent establishment of the employer in Ontario, or
• who do not report for work at a permanent establishment of the employer, but who are paid from or through a permanent establishment of the employer in Ontario.

To correct financial information reported on your account, file an amended return for the period in question or send a letter detailing the required adjustments to your local Ministry of Revenue tax office. Financial information must be corrected within four years from the date the return's due date. For other corrections, please call your local Ministry of Revenue tax office.

You can change your address online by completing the online form.

Or you can use the detachable 'Notification of Change' portion of the return envelope provided with the monthly instalment statement or annual return to advise the ministry of any change of information.

Employers who cease to have a permanent establishment, or who have amalgamated, or who no longer have employees in Ontario must advise the Ministry of Revenue. An EHT final return must be filed, within 40 days of the business closure date (or date of amalgamation), for the part of the calendar year that payroll was paid. Final payment of any outstanding liabilities must be remitted with the final return.

Late filing penalties are assessed for instalments and returns that are not received by the ministry on or before the due date. When mailing instalments or returns, employers should allow enough time to make sure that they are received by the ministry on or before the due date.

If you do not receive your statement, you may send your payment with a letter stating the following information:

• account number, name and address
• the period covered
• the amount of taxable Ontario remuneration, and
• the amount of tax due.

A replacement instalment remittance form may be faxed to you, but the faxed instalment remittance form cannot be used by financial institutions to process payments. The completed instalment remittance form can be faxed back to the ministry to avoid a late-filing penalty and the payment can be mailed in. However, interest charges will apply if the payment is not received by the due date. If the due date falls on a weekend or holiday, the due date for the instalment is the next working day.

EHT instalments may be made:

• at any financial institution in Ontario where you have an account
• by mail
• by delivery to any Ministry of Revenue tax office, or
• by internet using a financial institution’s online government tax payment service. Visit the online services section of this site. The employer should contact the financial institution for assistance when accessing or navigating these electronic services.

Please note that annual returns and annual return payments cannot be processed at financial institutions.

Employers with an annual Ontario payroll of $600,000 or less are not required to file instalments. For these employers, payment of the EHT is required by March 15th of the following calendar year with the filing of the Annual Return.

Employers with a payroll exceeding $600,000 would be required to remit monthly EHT instalments. Employers who are eligible for the tax exemption, and who have payroll exceeding $600,000, are not required to pay monthly instalments until after their cumulative payroll exceeds the $400,000 exemption amount.

The rate may be different for instalments versus that used for the annual return. Instalment tax rates are based on the employer's payroll from the prior year.

Employers in their first and second year of operation should estimate their annual payroll for the current year and use that amount to determine their instalment tax rate.

The tax rate to be used on the annual return is based on the actual remuneration paid by the employer during the year. Since the tax payable on the return may differ from the tax paid on the instalments during the year, a debit or credit balance may arise at year-end.

The tax rate is based on remuneration paid before the applicable exemption. An employer with more than one EHT account must use the tax rate applicable to the total of the ‘Total Ontario Remuneration’ for all the EHT accounts held by the legal entity. There are nine graduated tax rates, ranging from .98% to 1.95%. Please refer to the EHT Guide for Employers.

To register for EHT, an employer may:

• call or visit any Ministry of Revenue tax office
• visit the ministry website at: ontario.ca/revenue and select 'online services'
• visit a ServiceOntario - Ontario Business Connects location and register electronically by using the self-help workstations or visit the ServiceOntario website, or
• visit the Canada Revenue Agency (CRA) website at www.businessregistration.gc.ca and register electronically.

Eligible employers whose cumulative payroll does not exceed the exemption threshold and who are not associated are not required to register with the ministry. All other employers, including all members of an associated group, are required to register.