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Ontario EHT Exemption Threshold Now $450,000 

Canadian Tax Adviser

 

January 14, 2014

 

Ontario's Employer Health Tax Act has been amended to, among other changes, increase the exemption threshold so that it applies to employers with an annual payroll in excess of $450,000, as of January 1, 2014. Bill 105, which includes the increase to the Employer Health Tax (EHT) exemption threshold to $450,000 (from $400,000), received third reading and Royal Assent on December 12, 2013. As a result, this measure is substantively enacted for purposes of IFRS and ASPE (Ontario has a minority government) and enacted for U.S. GAAP as of that date.

Background
The increase to the EHT exemption threshold to $450,000 (from $400,000) effective January 1, 2014, was originally announced in Ontario's 2013 budget. The exemption is adjusted for inflation every five years. The budget had announced that at projected rates, the exemption was expected to rise to $500,000 in 2019. However, the legislation in Bill 105 states that the $450,000 exemption is for 2014-2018, and that the exemption will be adjusted for inflation every five years starting in 2019.

 

The budget also announced that the province would eliminate the exemption for private sector employers (including groups of associated employers) with annual Ontario payrolls over $5 million, effective January 1, 2014. Registered charities can still claim the exemption at all payroll sizes.

 

For more information, contact your KPMG adviser.

 

 

 

 

 

Information is current to January 14, 2014. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500