EHT remittance refers to the mandatory submission of Employer Health Tax payments to provincial governments in Canada, primarily in Ontario, Manitoba, and Newfoundland and Labrador. Employers whose annual payroll exceeds specific thresholds must calculate, withhold, and remit EHT to fund provincial healthcare systems. The remittance frequency—monthly, quarterly, or annually—depends on the total payroll amount and provincial regulations.
The process involves calculating the tax based on total Ontario payroll (for example, 1.95% for employers above the exemption threshold), completing the required remittance forms, and submitting payments by legislated deadlines. For instance, an Ontario employer with $600,000 in annual payroll would calculate EHT on amounts exceeding $490,000, remit quarterly, and file an annual return. Accurate payroll tracking and timely submissions prevent penalties and ensure compliance with provincial healthcare funding obligations.
EHT remittance is critical for maintaining compliance with provincial tax obligations and avoiding costly penalties that can reach 10% of the amount due plus daily interest charges. Proper remittance ensures uninterrupted business operations and protects employer reputation with tax authorities. For multi-province employers, accurate EHT management prevents double taxation and ensures correct allocation of payroll across jurisdictions. Timely remittance also supports provincial healthcare funding, which directly impacts workforce health and productivity.
- Determine your remittance obligation: Calculate your total annual Ontario payroll to establish if you exceed the $490,000 exemption threshold and identify your remittance frequency (annual, quarterly, or monthly based on payroll size).
- Calculate the tax amount: Apply the applicable EHT rate to your taxable payroll, subtracting any exemptions. Maintain detailed payroll records including gross wages, bonuses, and taxable benefits for accurate calculation.
- Submit payments on schedule: Remit through the Ontario government's online portal by the 15th day following each period end, ensuring you reference your EHT account number and reporting period correctly.
- File annual reconciliation: Complete and submit your Annual Return (Form RC1) by March 15th, reconciling all remittances made throughout the year and adjusting for any discrepancies or overpayments.
Key Statistics & Benchmarks
- Ontario EHT exemption is $490,000 — employers below this threshold pay no tax.
- Standard rate is 1.95% — applied to total payroll exceeding the exemption amount annually.
- Monthly remittance required above $2.4M — payroll determines your filing frequency and compliance schedule.
- Penalties start at 10% — late remittances incur immediate penalties plus compounding daily interest charges.
Common Mistakes to Avoid
- Missing remittance deadlines: Set automated calendar reminders for the 15th of each period to avoid penalties and interest charges.
- Incorrect payroll allocation: Ensure multi-province employers allocate payroll accurately to avoid overpaying or underpaying EHT in Ontario.
- Forgetting annual reconciliation: File the Annual Return by March 15th even if all periodic remittances were made throughout the year.
Frequently Asked Questions
What is EHT remittance and who needs to pay it?
EHT remittance is the submission of Employer Health Tax payments to provincial governments in Canada, primarily Ontario. Employers with annual Ontario payroll exceeding $490,000 must register, calculate the tax at 1.95% on amounts above the exemption, and remit according to their payroll size—annually, quarterly, or monthly—to fund provincial healthcare programs.
How do I calculate my EHT remittance amount?
Calculate your total Ontario payroll including wages, salaries, bonuses, and taxable benefits. Subtract the $490,000 exemption, then multiply the remaining amount by 1.95%. For example, a $600,000 payroll results in ($600,000 - $490,000) × 1.95% = $2,145 annual EHT. Divide by your remittance frequency for periodic payment amounts.
What is the difference between EHT and CPP remittance?
EHT is a provincial employer-only tax funding healthcare in Ontario, Manitoba, and Newfoundland, while CPP is a federal pension contribution shared between employers and employees across Canada. EHT has provincial exemption thresholds and rates, whereas CPP has annual maximums and standardized rates. Both require separate remittance processes and reporting to different government authorities.
What happens if I miss an EHT remittance deadline?
Missing an EHT remittance deadline triggers immediate penalties of 10% on the outstanding amount, plus daily compound interest calculated from the due date. The province may also conduct audits, issue assessments, and in severe cases, pursue legal collection action. Voluntarily disclosing late payments before assessment can sometimes reduce penalties, so remit immediately and contact provincial authorities.