Ontario HR Compliance · Employer Health Tax
Employer Health Tax: Annual Return, Exemption, and Instalments
Every Ontario employer with taxable Ontario remuneration files an annual Employer Health Tax return, due March 15 of the following year; employers over the instalment threshold also pay monthly. An exemption shelters a fixed amount of payroll, with no exemption once the employer or its associated group exceeds the upper payroll cap.
General information about Ontario employment law, not legal advice.
The Employer Health Tax (EHT) is an Ontario payroll tax on the remuneration you pay to employees. If you have a permanent establishment in Ontario and pay taxable Ontario remuneration, you have an EHT account and you file an annual return. You file even if your payroll is fully covered by the exemption, because the return is how you claim the exemption.
The annual return. The EHT return is an annual filing, due March 15 of the following calendar year. If March 15 falls on a weekend or a public holiday, the due date moves to the next business day. You report the year’s Ontario remuneration, apply the exemption you are entitled to, and pay any balance owing. The recurrence is durable: one return per year, due in the following March. The exact date in any given year is on the ontario.ca EHT pages, so confirm it there rather than assuming March 15.
Monthly instalments for larger payrolls. Filing once a year is not the whole obligation for every employer. If your annual Ontario remuneration is high enough, you also pay EHT in monthly instalments through the year, each due the 15th of the following month, and then reconcile on the annual return. As of 2026, from the ontario.ca EHT pages, the instalment trigger is Ontario remuneration over $1,200,000. Below that, you pay once with the annual return; at or above it, the monthly instalment schedule applies. That threshold is a current figure — confirm the live number at the named ontario.ca page before you assume which side of it you are on.
The exemption and the cap. Eligible employers claim an exemption that shelters a set amount of Ontario remuneration from EHT; tax is calculated on payroll above the exempt amount. As of 2026, from the ontario.ca EHT pages, the exemption is $1,000,000 of Ontario remuneration. This exemption was made permanent in 2021. There is an upper limit on who can claim it: as of 2026, from the same ontario.ca EHT pages, the exemption is not available where the Ontario payroll of the employer, combined with any associated employers, exceeds $5,000,000. Registered charities are an exception to that cap. So an employer or associated group over that $5,000,000 ceiling in Ontario payroll pays EHT on its full remuneration with no exemption (unless it is a charity). Both the exemption amount and the cap are current figures — confirm them at the named ontario.ca page rather than assuming the values above.
The rates. EHT is charged on the remuneration above the exempt amount, at a rate that rises with payroll size. As of 2026, from the ontario.ca EHT pages, the rates range from 0.98% up to 1.95%. The applicable rate, and the rate table by payroll size, are on the ontario.ca page — use the live table rather than a remembered figure.
One figure here is unusually stable — but not permanent. Unlike CRA and WSIB figures that reset every January 1, the EHT exemption is fixed. It does not move with inflation each year. As of 2026, from the ontario.ca EHT pages, it is scheduled for an inflation adjustment on January 1, 2029. Treat that date as the re-verify trigger: the $1,000,000 exemption holds until then, and the value should be confirmed on the ontario.ca page at and after that adjustment.
Where employers trip up: assuming that being under the exemption means there is nothing to do. Every account with taxable Ontario remuneration files the annual return, and the exemption is claimed on that return, not granted automatically. The other common miss is the associated-employer rule — both the $1,000,000 exemption and the $5,000,000 cap are tested across the whole associated group, not company by company, so a group of related entities can lose the exemption even though no single payroll looks large. And the monthly-instalment obligation is easy to overlook in a year your payroll crosses the instalment threshold.
This is general information, not legal or tax advice; get advice on your own situation. The dollar figures above (the $1,000,000 exemption, the $5,000,000 cap, the $1,200,000 instalment trigger, and the 0.98%–1.95% rates) are current values that can change — the exemption in particular is scheduled to be adjusted for inflation on January 1, 2029. Confirm the current figures and the exact filing date for your year at the ontario.ca Employer Health Tax page.