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Employer Health Tax, in plain English.
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Employer Health Tax is a provincial payroll tax charged to employers on total remuneration paid in a given province, with Ontario, British Columbia, Manitoba, Newfoundland and Labrador, and Quebec each running their own version under their own name and rules.
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It is employer-paid, so nothing is deducted from employee pay. Thresholds, exemptions, and rates are set provincially. Workzoom calculates it from the same payroll run that produced the remuneration.
How Employer Health Tax works.
EHT is assessed on the employer, not withheld from the employee, which puts it in a different category from CPP or EI. Each province sets its own exemption threshold and rate band, and most operate on a sliding scale where the rate rises with total payroll. Associated or related employers generally have to share a single exemption rather than each claiming it, which catches groups that run several legal entities. Because the tax follows the province where the employee reports to work, multi-province employers calculate it separately per jurisdiction.
Where Employer Health Tax goes wrong.
- The exemption-sharing rule is the expensive surprise.
- A group of associated companies that each claim a full exemption can face reassessment years later.
- The second trap is assuming the tax follows head office. It follows the permanent establishment the employee works from, so a remote hire in another province can create a filing obligation the employer did not plan for.
- 2000 Running payroll since Workzoom has run Canadian payroll for 25+ years.
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How Employer Health Tax runs on Workzoom.
Employer Health Tax is part of the Workzoom Payroll Suite. Workzoom runs HR, workforce, and talent on a single employee record across ten countries: Canada, the United States, the Bahamas, Jamaica, Trinidad and Tobago, Barbados, Antigua and Barbuda, Anguilla, the Cayman Islands, and the United Kingdom. Full gross-to-net payroll runs live in Canada, the United States, and the Bahamas. Pricing starts at $4 per employee per suite per month.
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