On March 25, 2020, the Government of Ontario temporarily increased the Employer Health Tax ("EHT") exemption from $490,000 to $1 million due to the effects of the COVID-19 pandemic on Ontario businesses. The EHT is a payroll tax on remuneration paid to employees and former employees. The temporary increase is for the 2020 tax year and will return to $490,000 on January 1, 2021.
The Government of Ontario has also provided a five-month relief period for businesses who are unable to file or remit the EHT on time due to COVID-19. Beginning on April 1, 2020, penalties and interest will not apply to Ontario businesses who miss the applicable tax filing and remittance deadlines. The length of the relief period is five months. T here is no need to apply for this relief as penalties and interest will be waived automatically.
It must be emphasized that only the exemption amount and relief period have temporarily changed. Eligibility criteria for the EHT, tax rates and other aspects of the EHT remain the same.
More information is available here.
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