EHT & "ASSOCIATED" EMPLOYERS
GETTING THE FULL EXEMPTION AMOUNT
Employer Health Tax ("EHT") is a part of our overall
Indirect Tax practice, and a common EHT question we get is whether
two corporations are "associated employers" for the tax.
Being associated is problematic, as it essentially makes each
employer pay more than if they were unrelated.
While this may seem like a straightforward bedrock question (is
"Aco" associated with "Bco"), there is some
confusion as to how the technical rules apply (even, it appears, at
the Ontario Ministry of Finance ("MOF") – at least
based on some recent Ontario assessment positions that we have
seen).
Mechanics of the EHT
Taking Ontario as an example of an EHT regime (there are
actually 7 provinces and territories with a form of the EHT in
Canada), the tax imposed is technically an employer liability tax
imposed on the total Ontario remuneration (payroll) paid to current
and former employees.
