Canada Employer Health Tax Calculator
Calculate Employer Health Tax (EHT) for Ontario and British Columbia. Ontario employers are exempt on the first $1 million of payroll, with graduated rates from 0.98% to 1.95%. BC exempts employers under $500,000 with rates from 2.925% to 1.95%. Enter your total payroll to see your obligation.
Regional Rule Context
Canada Rates and Rules
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Total remuneration paid to all employees in the year
EHT applies in Ontario and British Columbia
Result
Enter values above and click Calculate to see your result.
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Employer Health Tax calculator for Ontario and BC for 2026. Ontario EHT: exempt for employers with total payroll under $1,000,000; 0.98% on payroll $1M-$5M (with $1M exemption); 1.95% on payroll over $5M (no exemption). BC EHT: exempt under $500,000; 2.925% on $500K-$1.5M (with $500K exemption); 1.95% on payroll over $1.5M (no exemption). EHT is an employer-only cost, not deducted from employee wages.
Disclaimer: This calculator uses publicly available rules effective as of Jan 1, 2025 (version 1.0). Results are for informational purposes only. Always verify with official sources or a qualified professional. Last reviewed: Mar 1, 2026.
Formula
Subtract the province-specific exemption threshold from total annual payroll. Apply the graduated rate based on your payroll bracket. Ontario uses a tiered rate from 0.98% to 1.95%, while BC uses rates from 2.925% to 1.95% depending on payroll size.
Canada FAQs
What is the Employer Health Tax?
EHT is a payroll tax paid by employers to fund provincial health care. It is not deducted from employee wages. Ontario and BC both have EHT; other provinces fund healthcare through general revenue or other levies. It applies to total annual remuneration including salary, bonuses, and taxable benefits.
When is an employer exempt from Ontario EHT?
Ontario employers with total annual payroll under $1,000,000 are exempt from EHT. Associated employers (related companies) must combine their payrolls to determine if the exemption applies. Registered charities and eligible employers may claim a higher exemption of $1,000,000 regardless of payroll size.
How is BC EHT calculated?
BC employers with payroll under $500,000 are exempt. Payroll between $500,000 and $1,500,000 is taxed at 2.925% on the amount over $500,000. Payroll over $1,500,000 is taxed at 1.95% on the full amount with no exemption. The rate structure means mid-size employers face a higher effective rate than large employers.
Does EHT apply to contractor payments?
Generally no. EHT applies to remuneration paid to employees, not independent contractors. However, if CRA or the province reclassifies a contractor relationship as employment, the employer would owe EHT retroactively on those payments.
Is EHT deductible as a business expense?
Yes. EHT is a deductible business expense for both federal and provincial income tax purposes. It reduces your corporate taxable income, so the after-tax cost is lower than the face amount of the EHT payment.
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