SB Partners logo

Employer Health Tax for Registered Charities Changes as of January 1, 2014


Richard Weber on January 1, 2014 in Advice for Charities
Effective January 1, 2014, the amount of annual Ontario payroll that may be exempt from Employer Health Tax (EHT) is increased from $400,000 to $450,000. To better target EHT relief, the exemption is eliminated for private-sector employers with annual Ontario payrolls over $5 million. Registered charities, including those with payrolls over $5 million, continue to be eligible for the exemption. 
 
Administrative concession
Each location of a registered charity may be treated as a separate employer for EHT purposes and is allowed to deduct the first $450,000 of annual remuneration. These locations are not considered to be associated employers and will not be required to share the annual exemption amount.
 
Eligibility
Registered charity
The registered charity must be a registered charity which that is exempt from income tax under paragraph 149(1)(f) of the Income Tax Act (Canada). 
 
Eligible employer 
In addition, the registered charity must be an eligible employer as defined by the Employer Health Tax Act (EHT Act). Generally, this would include private sector employers and organizations that may receive financial assistance from any level of government but are not under the control of government. For more information, visit: http://www.fin.gov.on.ca/publication/eht-registered-charity-en.pdf