I won’t call Employer Health Tax a scam, but what a scam!!
To keep it simple, companies need to pay a 1.95% tax that to help contribute to OHIP (and we’re not 100% sure that money all actually goes to the OHIP line on the provincial budget).
This concept was introduced in 1990 and has an exemption level of $450,000. Really? $450,000? I know that sounds like a lot of money, but there are payrolls in Ontario with 2 employees that exceed $450,000.
This means for every $1M of payroll, there’s a $20,000 charge to Ontario business to help fund OHIP.
· There’s no maximum per employee
· There’s no exemption if the employer sponsors a health and dental plan for employees
· There’s been no regard for the Individual Health Levy (introduced in 2003) that all hard-working Ontarian’s pay on the annual income tax return
· There was no discussion about repealing EHT rather than providing universal drug coverage for Ontarians under 25 years old
So, in 2017 when Ontario tax rates were reduced by 1% for business, they probably should have fought harder to repeal EHT and keep tax rates the same…because at the end of the day, it’s all a cost.