On November 6, 2024, Bill 216, the Building Ontario For You Act (Budget Measures), 2024, received Royal Assent. This bill introduces several amendments to various Ontario statutes, including the Employer Health Tax Act (EHTA), which governs the application and calculation of the Employer Health Tax (EHT).
Effective January 1, 2025, the following amendment will be effective:
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Changes to Exemption for Associated Employers: Associated employers will be required to enter into an agreement to allocate the one million dollar exemption among themselves. The exemption amount for each associated employer will be the lesser of:
- The sum of the amounts allocated to the employer under the agreement with the other associated employers, and
- The amount the employer would have received if they were not associated with other employers.
- If the combined payroll of the associated group exceeds five million, none of the members will be eligible for the EHT exemption.
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Changes to Tax Payment and Filing Deadlines: The exemption allowing employers to avoid instalment payments if they paid their total Ontario remuneration for the year in one month will be eliminated.
The deadline for employers to submit their annual return to the Minister of Finance will be March 15 of the following year, replacing the current prescribed filing date.
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New Reassessment and Refund Mechanism: A new mechanism will allow employers to request the reassessment of their tax payable for a given year if they believe they have overpaid. The request must be made in writing within 90 days following the original assessment. The Minister of Finance will have the authority to refund any overpaid amounts determined by the reassessment.
Employers should review the new rules carefully to ensure they meet the updated requirements and benefit from the available exemptions.