Section 12 – Social Programs and Benefits
Employer Health Tax – Ontario
A taxpayer who has employees who report to work at or are attached to a permanent establishment of the taxpayer in Ontario or are paid from that establishment, must pay the employer health tax. Contributions are based on the annual payroll, as follows:
| Annual payroll | 2023 contribution rate |
| $0 – $200,000 | 0.98% |
| $200,000.01 – $400,000 | 1.01% to 1.829% |
| Over $400,000 | 1.95% |
However, private sector employers are entitled to a health tax exemption on the first $1M of remuneration.26 The exemption has to be shared by associated employers. The contribution rate is determined based on an employer’s total payroll before the exemption.
26 Threshold usually indexed every five years; next adjustment postponed to January 1, 2029 given that it was doubled from 2020 to 2028. The exemption is not available for private-sector employers with a payroll greater than $5M (including associated corporations).
This document is up to date as of August 31, 2023 and reflects the status of legislation, including proposed amendments at this date.
Section 12 – Social Programs and Benefits
Employer Health Tax – Ontario
