Employer Health Tax Updates

The Ontario Ministry of Finance has updated its webpage to provide employers with enhanced guidance on the special regulations affecting associated employers. 

The Employer Health Tax (EHT) Act extends the rules applicable to associated employers to encompass individuals, partnerships, and trusts, treating these entities as corporations with a single class of voting shares. 

Additionally, they have introduced a flowchart and detailed information designed to assist in determining a business' status as an associated employer. This includes a variety of common scenarios, examples, and clarifications to enhance employer's understanding and compliance. 

The following is a reminder for employers who are part of an associated group of employers: 

If you're part of an associated group of employers, to claim the $1,000,000 exemption, an agreement to divide this amount within the group is required, ensuring no member claims more than their share. The exemption is forfeited if the group's combined Ontario payrolls exceed $5 million. Only one member must file the Exemption Allocation form with the Ministry of Finance by March 15, listing all group members, irrespective of their exemption share or payroll presence. Failure to submit this form results in the group's exemption denial, with tax rates determined by each employer's Ontario payroll. 

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