Taxes

The premium is a tax based on income. Individuals with taxable income of $20,000 or less are exempt. Above that, premium levels rise with taxable income.

Please view this chart to determine the premium level based on taxable income.

Revenue from the premium should contribute $2.6 billion to the Ministry of Health and Long-Term Care for the 2007-08 year.

Every dollar of the Ontario Health Premium is invested directly in our health care system.

In 2007-08, the premium will raise $2.6 billion increased funding to the Ministry of Health and Long-Term Care.

The government will publicly report where the revenue generated by the premium is allocated. The legislation requires the government to report on the use of the revenue from the premium in the Public Accounts of Ontario each year.

The Ontario Health Premium came into effect for the 2004 tax year. The health premium began to be deducted from employee payrolls and pension cheques on July 1st, 2004.

Two other provinces currently have health premiums. In British Columbia, a single individual pays $648 per year, a family of two pays $1,152 and a family of three or more pays $1,296. In Alberta, a single individual pays $528 per year and a family of two or more pays $1,056. While these provinces offer limited premium assistance to residents with low incomes, Ontario is the only province with a health premium based on income.

The premium applies to individuals who are residents of Ontario on the last day of the taxation year. Trusts and non-resident taxpayers are exempt from the premium.

The amount of the premium payable, if any, depends on the individual's taxable income for the year. Individuals with taxable incomes under $20,000 do not pay any health premiums.

No. The premium is based on individual taxable income. Regardless of whether someone is married, divorced, separated or single, the health premium is charged based only on one's own taxable income.

Therefore, a married couple where each spouse had taxable income of $40,000 a year pays premiums based on individual taxable income of $40,000 each, as opposed to a single family premium based on their combined taxable income of $80,000.

This also means that the premium does not apply to family members who have little or no income (such as a stay at home spouse, children or other dependants).

In designing the premium, the government decided that it would be more equitable to base liability on income, rather than age. Individuals with taxable income of $20,000 or less are exempt from paying the premium.

No resident is denied access to Ontario's publicly funded health care services for failing to pay the Ontario Health Premium.

Individuals with taxable income over $20,000 pay the Ontario Health Premium, even if they don't pay any Ontario income tax. Similarly, people with taxable income of $20,000 or less do not pay the premium but may still pay Ontario income tax.

Individuals who remit tax instalments based on their previous years' net tax owing, should increase their current instalments to include the OHP. Instalment interest may be charged if these instalment payments are insufficient.

Individuals determine the actual amount of the premium on the Form ON428, Ontario Tax when they file their annual returns. If the current instalments were insufficient, individuals could have a balance owing on their tax return.

Seniors who receive pension income of more than $20,000 a year have the premium deducted at source along with other taxes. Seniors who receive income from other sources that are not subject to tax withholdings may wish to request an increase in the amount of tax withheld from their pensions by designating an additional amount on the TD1ON, 2008 Ontario Personal Tax Credits Return.

Alternatively, seniors may elect to have income tax withheld from Old Age Security (OAS) and Canada Pension Plan (CPP) benefits by completing and sendingForm ISP3520, Request for Voluntary Federal Income Tax Deductions, to Human Resources and Social Development Canada (HRSDC). The form is available on the HRSDC website.

Individuals who have elected to have income tax deducted from OAS or CPP, may wish to increase the amount to include the Ontario Health Premium.

Individuals who do not have taxes deducted at source or make instalment payments pay the premium when they file their tax return.

Self-employed individuals with taxable income of more than $20,000 are required to pay the Ontario Health Premium.

Individuals who remit tax instalments based on their previous years' net tax owing have the premium reflected in their current instalments. Instalment interest may be charged if these instalment payments are insufficient.

Individuals determine the actual amount of the premium on the Form ON428, Ontario Tax when they file their annual tax returns.