Question

broadview inc is public sector employer located in ontario and had 650,000 remuneration in 2017. kingsview inc is private sector located in ontario and had 500,000 remuneration in 2017. please use appropriate tax rate to calculate the EHT owing amount for these two companies and indicate if they need to pay the installment ? how much is that? when is the due date.

Answer 1

Employer Health Tax (EHT) is a payroll tax on remuneration paid to employees and former employees.

A for-profit employer with BC remuneration in 2019:

1. totaling $500,000 or less is exempt from paying the EHT.
2. between $500,000.01 and $1,500,000 pays the reduced EHT amount as calculated: 2.925% x (BC remuneration - $500,000).
3. greater than $1,500,000 pays the EHT on its total BC remuneration as calculated: 1.95% x total BC remuneration.

For Broadview inc. the amount of EHT payable is 2.925% * (650,000 - $ 500,000)

EHT = $ 4,387.50

For Kingsview inc. EHT is exempted as it is within exemption limit of $ 500,000. So, EHT = $ 0

EHT is required to be paid in full by March 15 of the next calendar year with the filing of the annual return.

However, The Ontario government has temporarily increased the EHT exemption for 2020 from $490,000 to $1 million due to the special circumstances caused by the coronavirus (COVID‑19) in Ontario.The exemption will return to the previous amount of $490,000 on January 1, 2021.