Employer Health Tax relief
Highlights
This program is designed for you because it offers significant financial relief and support for your business. By participating, you can benefit from a tax exemption on the first $1,000,000 of your payroll, which can lead to substantial savings. This exemption is particularly beneficial if your annual payroll is less than $5 million, allowing you to allocate more resources towards growth and development.
Key Benefits:
- Tax Exemption: Save on the first $1,000,000 of your payroll.
- Flexible Use: Apply the savings to various business needs, such as hiring, expansion, or operational improvements.
- Simple Qualification: If your payroll is under $5 million, you likely qualify, making it easier to benefit from this program.
By being approved, you can reduce your tax burden and reinvest those savings into your business. This program is straightforward to qualify for, ensuring you can quickly take advantage of the financial benefits it offers.
Financing Details
Type of Financing: This program offers a tax credit.
Eligible Expenses: The tax credit can be applied to the following expenses:
- Salaries and wages paid to employees.
- Bonuses and taxable benefits.
- Stock options provided to employees.
Use of Funds: The tax credit cannot be used for:
- Non-remuneration expenses.
- Payments to contractors or freelancers.
- Any expenses not directly related to employee remuneration.
Repayment Terms: There are no repayment terms or interest rates associated with this tax credit, as it is not a loan or repayable sum.
Fees: There are no fees associated with applying for or receiving this tax credit.
Qualifications
- Must be an employer in Ontario.
- Must have an annual Ontario payroll of less than $5 million.
- Must be eligible to claim the exemption under the EHT Act.
- Must pay income taxes.
- Must not be under the control of any level of government (e.g., no municipal representatives on the board of directors).
- Must register for an EHT account with the Ontario Ministry of Finance if payroll exceeds the allowable exemption.
Must file an EHT annual return if annual Ontario payroll is greater than the exemption amount.
Disqualifications:
- Businesses with an annual Ontario payroll exceeding $5 million.
- Businesses under the control of any level of government.
- Businesses that are part of an associated group that has already claimed the full exemption.
Description
This program offers a valuable opportunity for your business. You can receive up to $1,000,000 in tax exemptions on your payroll. This means you only pay the Employer Health Tax (EHT) on the amount exceeding this exemption.
Here’s how it works:
- If your annual payroll is $1,800,000, you only pay EHT on $800,000.
- The tax rates vary based on your total payroll, but the first $1,000,000 is exempt.
Benefits to your business:
- Significant savings on payroll taxes.
- More funds available to reinvest in your business.
- Permanent exemption amount of $1,000,000, adjusted for inflation starting January 1, 2029.
This program is designed to help your business manage costs and support growth. Take advantage of this opportunity to reduce your tax burden and keep more of your earnings.
Program Steps
Gather Required Information:
- Legal name of your business
- Trade name (if applicable)
- Business address
- Mailing address
- Telephone and fax numbers
- Name of contact person or authorized representative
- Payroll start date
- Payroll frequency
- Federal business number (BN)
- Employer type (e.g., associated, multiple accounts, or public sector employer)
Prepare Documentation:
- Financial statements
- Business plan
- Details of intended use of funds
- Payroll records
- Associated Employer Exemption Allocation form (if applicable)
Register for an EHT Account:
- Register online through the Ontario Ministry of Finance website
- Call 1-866-ONT-TAXS (1-866-668-8297)
- Use a self-help workstation at a ServiceOntario centre
Calculate Your EHT:
- Deduct your exemption amount from your total Ontario remuneration
- Multiply the remaining amount by your applicable tax rate
File Your EHT Return:
- File your annual return and payment on or before March 15th
- Use ONT-TAXS online, in person at certain ServiceOntario centres, or by mail
Pay Monthly Instalments (if applicable):
- If your payroll exceeds $1,200,000, pay monthly instalments
- Payments can be made through ONT-TAXS online, in person at ServiceOntario centres, or by mail
Maintain Records:
- Keep records and books of accounts confirming compliance with the EHT Act and Regulations
Contact Ministry of Finance for Assistance:
- For inquiries or assistance, call 1-866-ONT-TAXS (1-866-668-8297)
- Use ONT-TAXS online for account-related inquiries
File a Notice of Objection (if necessary):
- Complete and submit a Notice of Objection form within 180 days of the Notice of Assessment or Re-Assessment
- Mail to Ministry of Finance, c/o Director, Advisory, Objections, Appeals and Services Branch, 33 King Street West, PO Box 699, Station A, Oshawa ON L1H 8S6