Employer Health Tax and Workplace Safety and Insurance Board Payments During COVID-19 Pandemic

March 30, 2020

The Ontario government is increasing the EHT Exemption and allowing WSIB premium payment deferrals.

On March 25, 2020, the Ontario government announced several relief measures to support Ontario businesses and individuals. These measures include increasing the Employer Health Tax (EHT) exemption for 2020 from $490,000 to $1 million and the deferral of Workplace Safety and Insurance Board (WSIB) payments for six months.

Employer Health Tax

The Employer Health Tax (EHT) is a deductible payroll tax in Ontario that provides partial funding for the Ontario Health Insurance Plan.  The EHT is applied where there is an employer-employee relationship and the employer pays the employee. Therefore, the EHT does not apply to any self-employed individuals.  For more information on EHT click here.

Private sector employers with a payroll of less than $5 million are now entitled to an EHT exemption on the first $1 million of total Ontario payroll for 2020, retroactively to January 1, 2020. The EHT exemption will return to $490,000 on January 1, 2021.

Eligibility, rates and other factors remain the same.  A business will begin making instalments after payroll has exceeded the new $1 million exemption level.  There is no requirement to apply. More information on the exemption increase can be found here.

Example 1: An Ontario business has an annual payroll to employees of $1.5 million. It would owe 1.95% on $500,000 after the new 2020 $1 million exemption, for a total of $9,750.

Example 2: An Ontario business has an annual payroll to employees of $950,000. It would owe no EHT after the new 2020 $1 million exemption.

Workplace Safety and Insurance Board (WSIB)

All employers covered by the WSIB’s workplace insurance are automatically eligible to defer premium reporting and payments until August 31, 2020.  Additionally, no interest or penalties will accrue on outstanding premium payments for Schedule one organizations and Schedule two account balances will not accrue debit interest.  This WSIB measure does not represent payment forgiveness since all WSIB payments still need to be made by August 31, 2020. No opt-in or application is required. Further information on the WSIB payment deferral can be found here.

The following WSIB remitters are eligible for deferral:

  • Monthly: March 31, April 30, May 31, June 30, July 31, Aug 31
  • Quarterly: April 30, July 31
  • Annual: April 30

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