--- oa_review_kit: v1 guide_slug: on-eht guide_version: on-eht@2026-05-27T06:34:54.145Z archetype: other --- # Review kit: ON Eht Thank you for reviewing this Guide. This kit is one file with three parts: how to use it, an interview prompt for your AI, and the Guide itself. ## How to use this kit (3 steps, about 15 minutes) 1. Open the AI you already use (ChatGPT, Claude, Gemini, anything that reads markdown) and paste in everything from "INTERVIEW PROMPT" below, including the Guide at the end. 2. Your AI interviews you like a colleague, one question at a time. Just talk: war stories, walk-throughs, the mistakes you catch. No writing required. 3. Your AI writes your answers up as a single markdown file. Hand it back at openaccountants.com/skills/on-eht/handback (also linked from the Guide page: "Hand back your file"). What you added is published under your name and credential. If your AI cannot produce the exact output format, hand back whatever you have: a revised Guide file, a worksheet, or plain notes. We take those too, and a person reviews them by hand. The format below is the one we can apply straight away. --- # INTERVIEW PROMPT (paste from here down into your AI) You are interviewing a practising accountant about how they actually do the work covered by the attached Guide ("ON Eht", slug `on-eht`). Interview them like a colleague doing a handover. Do not lecture. Ask ONE question at a time and wait for the answer. Chase war stories and specifics: what kind of client, which portal step, how big the penalty was. The rates, thresholds, and citations are our job; we refresh those from primary sources. Capture ONLY what is NOT derivable from law: - order of operations, and what a wrong order corrupts - what to ask a client before computing anything - what to assume when a fact is unknown, and how it gets flagged - the most-missed traps, with penalty size and who falls in - how the portal or filing channel actually behaves - what has to reconcile before anyone signs - when to refuse the work and hand it to a human specialist If the accountant corrects a rate, threshold, or deadline in the Guide along the way, record it in the FACT CORRECTIONS table, but do not steer the interview toward numbers. ## Questions to work through Ask these in order, one at a time. Skip any the accountant has already covered; follow up where a story has specifics worth pinning down. Each question is tagged with the method slot(s) it feeds. 1. [sequence] Walk me through the last one of these you did for a real client, start to finish. What did you open first, and why that order? 2. [intake_questions] A new client sits down for this work. What are your first five questions before you touch a number? 3. [evidence] Which documents do you insist on seeing, and which do you take the client's word for? 4. [trap] When you review this work drafted by someone else, what mistake do you catch most often? 5. [conservative_default] When a key fact is unknowable at draft time, what do you assume, and how do you flag it? 6. [judgment_rule] When the law allows two routes, how do you actually pick, and what do you write down about the choice? 7. [cross_check] Before you sign, what has to reconcile with what, and how close is close enough? 8. [filing_mechanics] Walk me through the actual submission: the portal steps, the order things must happen in, what locks, what you can't undo. 9. [scope_gate] Which clients do you refuse or refer to a specialist for this work? What makes you stop? 10. [unsettled_law] Anything here you deliberately won't finalise right now because the rules are moving? 11. [handback_protocol] What exactly do you hand over at the end? What's in your working paper? ## Method slots (for tagging the write-up) - `scope_gate` (Scope gate and refusals): when to stop and send the client to a human - `sequence` (Order of operations): what order to do things in, and what a wrong order corrupts - `intake_questions` (Client intake questions): what to ask a client before computing - `evidence` (Documents and evidence): which documents to insist on, and what is draft-grade vs file-grade - `judgment_rule` (Judgment rules): how a practitioner actually picks when the law allows two routes - `conservative_default` (Conservative defaults): what to assume when a fact is unknowable at draft time - `trap` (Traps and most-missed items): the mistakes everyone makes, what they cost, and who falls in - `filing_mechanics` (Portal and filing mechanics): how submission actually works: channel, order, what locks - `cross_check` (Cross-checks before signing): what has to reconcile with what before delivery, and how close is close enough - `pattern_library` (Pattern library): how messy real-world data (bank lines, payout platforms) maps to tax categories - `edge_case` (Edge-case playbook): the client situations that change the method, not just the numbers - `unsettled_law` (Unsettled-law flags): what not to finalise right now, and why - `handback_protocol` (Hand-back protocol): what the finished working paper contains and who reviews it ## Output format: oa-handback v1 When the interview is done, write the answers up as ONE markdown file in exactly this shape. Fill in the reviewer's real name, credential, and email (ask for them at the end if they have not come up). Every method block gets a `### [method:]` heading where `` is one of the 13 slot ids above. Keep `guide_slug` and `guide_version` exactly as given. Omit any section the interview produced nothing for, but keep the headings that remain exactly as shown. The `fact_key` column may be left blank when unknown. ```markdown --- oa_handback: v1 guide_slug: on-eht guide_version: on-eht@2026-05-27T06:34:54.145Z reviewer_name: reviewer_credential: # free text: CPA, EA, ACCA, Steuerberater... reviewer_email: verdict: --- ## METHOD ### [method:filing_mechanics] ### [method:intake_questions] - - ... ## FACT CORRECTIONS | fact_key | current | correct | source | |---|---|---|---| | | | | | ## FLAGS - [unsettled] - [refer] ## NOTES ``` If for any reason you cannot produce this exact format, output the accountant's corrections and methods as clear plain notes instead. The hand-back page accepts plain notes and revised Guide files too; this format is an optimization, never a gate. --- # THE GUIDE UNDER REVIEW --- name: on-eht description: Use this skill for Ontario Employer Health Tax (EHT). Triggers "Ontario EHT", "Employer Health Tax Ontario", "EHT exemption Ontario", "EHT $1M threshold", "Ontario payroll tax", "Form 6076E EHT annual return". ALWAYS read alongside canada-payroll. jurisdiction: CA domain: international tax_year: 2025 --- # on-eht ## Ontario — Employer Health Tax (EHT) — Skill v1.0 The Ontario Employer Health Tax (EHT) is a payroll-based tax levied under the *Employer Health Tax Act*, R.S.O. 1990, c. E.11, administered by the Ontario Ministry of Finance. It applies to employers with permanent establishments in Ontario, in addition to any federal CPP/EI obligations covered by **canada-payroll**. This skill MUST be read alongside canada-payroll whenever Ontario payroll is in scope. ## 1. Quick reference **Quick reference table** | Item | 2025 value | | --- | --- | | Exemption (private-sector eligible employers) | **$1,000,000** of Ontario remuneration | | Top rate (payroll > $400,000) | **1.95%** | | Bottom rate (payroll ≤ $200,000, not exempt) | **0.98%** | | Sliding scale band | $200,001 – $400,000 (rate 0.98% → 1.95%) | | Registration / filing threshold | Total Ontario payroll > **$200,000** in the year, OR EHT payable for the year | | Annual return | **Form 6076E** — due **March 15** following tax year | | Monthly instalment trigger | Prior-year EHT > **$600** | - **Two-step calculation** — (1) subtract any allocated $1M exemption from total Ontario remuneration; (2) apply the rate from the bracket that the total (pre-exemption) payroll falls into to the remuneration after exemption. ## 2. Required inputs + refusal catalogue ### Required inputs - Legal name, Ontario EHT account number (1234-5678-RT0001 style not used; EHT has its own 7-digit account). - Total **Ontario remuneration** paid in the calendar year (gross wages, salaries, bonuses, taxable benefits, commissions, vacation pay, stock-option benefits, director's fees attributable to Ontario service). - Whether the employer is part of an **associated group** under s. 1(2) of the EHT Act (and the associated-employer Exemption Allocation Agreement, Form ON00150E). - Sector classification (private, public, charitable, multi-account charitable). - Prior-year EHT (to determine monthly-instalment requirement). - Number of months of operation in the year (for proration in start-up / wind-up / short-year cases). ### Refusal catalogue - **R-ON-EHT-1** — Public-sector or quasi-public-sector employers (no $1M exemption; complex grant-funded payroll rules). - **R-ON-EHT-2** — Multi-account charitable employers with more than one qualifying campus (s. 2.1 EHT Act, separate per-campus exemption mechanics). _(s. 2.1 EHT Act)_ - **R-ON-EHT-3** — Voluntary disclosure or arrears settlement (Ontario Voluntary Disclosures Program). - **R-ON-EHT-4** — Associated-employer disputes where the s. 256 ITA association test is contested. _(s. 256 ITA)_ - **R-ON-EHT-5** — Stock option benefit timing disputes (s. 1(1) "remuneration" — Ontario follows federal timing under s. 7 ITA, but disputes go to the Minister, not us). _(s. 1(1) EHT Act; s. 7 ITA)_ - **R-ON-EHT-6** — Special purpose entities — partnerships of corporations, joint ventures with separate Ontario PE, non-resident employers with intermittent Ontario presence. - **R-ON-EHT-7** — Out-of-scope: WSIB premiums (separate regime — see §10). ## 3. Rate - **Rate structure** — The EHT rate is not flat. It is a graduated scale based on total Ontario remuneration (pre-exemption). **EHT rate schedule** | Total Ontario remuneration (pre-exemption) | Rate applied to remuneration after exemption | | --- | --- | | Up to $200,000 | 0.98% | | $200,000.01 – $230,000 | 1.101% | | $230,000.01 – $260,000 | 1.223% | | $260,000.01 – $290,000 | 1.344% | | $290,000.01 – $320,000 | 1.465% | | $320,000.01 – $350,000 | 1.586% | | $350,000.01 – $380,000 | 1.708% | | $380,000.01 – $400,000 | 1.829% | | Over $400,000 | 1.95% | The sliding band between $200k and $400k is constructed so the marginal rate climbs roughly linearly from 0.98% to 1.95%. ## 4. Exemption - **Eligible private-sector employers exemption** — $1,000,000 of Ontario remuneration - **Exemption history** — This was raised from $490,000 in March 2020 and remains at $1M for the 2025 tax year. - **Eligibility for the exemption** — - Private-sector employer (corporations, partnerships, sole proprietors with employees). - Not a public-sector employer listed in s. 1 of the Act (Crown agencies, municipalities, school boards, hospitals, public colleges/universities — these get no exemption). - Total annual Ontario payroll of an associated group ≤ $5,000,000 (the $5M cap was introduced in 2014 — if combined associated-group payroll exceeds $5M, the entire group loses the exemption for that year, except for registered charities). - Registered charities are not subject to the $5M cap and always receive the exemption (and may have multiple-account treatment under s. 2.1). _(s. 1 EHT Act; s. 2.1 EHT Act)_ - **Associated employers exemption sharing** — Associated employers must share the $1M exemption pursuant to s. 2.2 of the Act. They file Form ON00150E — Associated Employers Exemption Allocation to allocate the exemption among themselves. Each associated employer that does not allocate exemption to itself is fully taxable on its Ontario remuneration with no exemption. _(s. 2.2 EHT Act)_ - **Proration for short years** — exemption × (months of operation ÷ 12). A partial month counts as a full month. ## 5. Liability threshold — who must register and file - **Registration triggers** — An employer must register for an EHT account if: - Total Ontario remuneration exceeds the $1,000,000 exemption for the year (private sector), OR - Total Ontario remuneration exceeds $200,000 for the year and the employer is not eligible for the exemption (public sector, associated group over $5M, etc.), OR - The employer is required to remit EHT on Ontario remuneration that exceeds its allocated share of the exemption. - **No filing required scenario** — No filing required if Ontario remuneration ≤ $1M for a sole eligible private-sector employer with no associated employers — but best practice is still to register if approaching the threshold, because retroactive registration triggers penalties. - **Public sector and associated over cap** — Public sector and associated employers over the $5M cap: must register and file once Ontario payroll exceeds $200,000 (no exemption — the $200k figure here is the registration floor, not an exemption). ## 6. Annual return — Form 6076E - **Form 6076E due date** — The annual return is Form 6076E — Employer Health Tax Annual Return, due March 15 of the year following the tax year (e.g., 2025 tax year → due March 15, 2026). - **Reconciliation on return** — The return reconciles total Ontario remuneration, applies the exemption (and associated-group allocation), computes EHT at the correct graduated rate, and credits any monthly instalments paid during the year. Net balance owing is due March 15; refunds are issued by the Ministry of Finance. ### Filing channels - ONT-TAXS online (preferred — most employers). - Paper Form 6076E mailed to Ministry of Finance, 33 King Street West, Oshawa ON L1H 8H5. ## 6. Annual return — Form 6076E - **Late filing penalty** — 5% of unpaid tax plus 1% per month for up to 12 months, plus interest at the prescribed rate. ## 7. Instalments - **Monthly instalment requirement** — If the employer's prior-year EHT exceeded $600, monthly instalments are required for the current year. Instalments are due the 15th day of the month following the month in which remuneration was paid (e.g., January payroll → February 15 instalment). - **Monthly instalment calculation** — Each monthly instalment is computed by applying the appropriate rate to the Ontario remuneration paid that month, after deducting the monthly portion of the exemption ($1,000,000 ÷ 12 = $83,333.33 per month for a full-year private-sector employer with no associated allocations). - **Employers below instalment threshold** — Employers with prior-year EHT ≤ $600 pay annually with the Form 6076E filing. - **Final reconciliation** — The March 15 annual return either tops up underpayment or claims refund of overpayment. ## 8. Special situations - **Registered charities (s. 2.1)** — Charities receive the $1M exemption per qualifying campus (a separate physical location with payroll). Multi-campus charities can multiply their exemption. They are exempt from the $5M associated-group cap. _(s. 2.1)_ - **Seasonal employers** — Operate only part of the year; exemption is not prorated for seasonal operation if the employer existed throughout the year (e.g., a ski resort with a 5-month payroll season still gets the full $1M exemption). The exemption is only prorated when the employer's existence (not its activity) is shorter than 12 months. - **Multi-employer associated groups** — Under s. 256 ITA association rules (applied via s. 1(2) EHT Act). One Exemption Allocation Agreement (Form ON00150E) per group. If unallocated, no employer in the group gets exemption. Group's combined Ontario payroll determines the $5M cap test. _(s. 256 ITA; s. 1(2) EHT Act)_ - **Non-resident employers** — Liable for EHT on remuneration paid to employees who report for work at a permanent establishment in Ontario, or who are paid from an Ontario PE. A non-resident with no Ontario PE may still trigger EHT if the employee spends substantially all working time in Ontario (s. 1(2) deeming rules). _(s. 1(2) EHT Act)_ - **Mid-year start-up or wind-up example** — Exemption prorated by months of existence. A business that started July 1 has 6 months of existence → exemption = $1,000,000 × 6/12 = $500,000. - **Stock option benefits** — Treated as Ontario remuneration in the year the s. 7 ITA benefit is included in employment income. Sourced to Ontario based on where employment services were performed during the option's vesting period. _(s. 7 ITA)_ ## 9. Worked example — Toronto tech startup - "AcmeDev Inc." — Ontario CCPC, single Ontario PE in downtown Toronto. - 12 employees, all in Toronto, paid evenly throughout 2025. - Total 2025 Ontario remuneration: $1,500,000 (salaries $1,380,000 + taxable benefits $90,000 + bonuses $30,000). - No associated employers, no public-sector involvement. - Prior-year (2024) EHT: $4,800 → monthly instalments required. Private-sector, no associated group, payroll < $5M → eligible for $1,000,000 exemption. Total Ontario remuneration = $1,500,000. This is over $400,000, so the applicable rate is 1.95% on remuneration after exemption. $1,500,000 − $1,000,000 exemption = $500,000 taxable. $500,000 × 1.95% = $9,750.00 annual EHT. Each month: $125,000 paid (1.5M ÷ 12), monthly exemption portion = $83,333.33. Taxable per month = $125,000 − $83,333.33 = $41,666.67. EHT per month = $41,666.67 × 1.95% = $812.50. 12 × $812.50 = $9,750 ✓ ties to annual. Form 6076E filed by March 15, 2026. Total EHT $9,750; instalments paid $9,750; balance owing $0. AcmeDev's federal T4 summary should show $1,500,000 in Box 14 totals across all T4s issued for Ontario employees, matching the Ontario remuneration figure on Form 6076E within a typical reconciling-item tolerance (taxable benefits not on T4 Box 14, etc.). Flag any variance > 2% for review. ## 10. Coordination with WSIB WSIB (Workplace Safety and Insurance Board) premiums are a separate Ontario regime under the Workplace Safety and Insurance Act, 1997 — not part of EHT. Key distinctions: **EHT vs WSIB comparison** | | EHT | WSIB | | --- | --- | --- | | Statute | EHT Act, R.S.O. 1990 | WSI Act, S.O. 1997 | | Administered by | Ministry of Finance | WSIB (Crown agency) | | Base | Total Ontario remuneration | Insurable earnings (capped) | | 2025 max insurable earnings (WSIB) | n/a — uncapped | $117,000 per worker | | Rate | 0.98% – 1.95% (graduated) | Industry classification rate (varies — see WSIB rate schedule) | | Coverage required? | All Ontario payrolls (over threshold) | Schedule 1 and 2 industries; some industries optional | | Filing | Form 6076E annually | Monthly/quarterly reconciliation + annual reconciliation | Out of scope for this skill — WSIB has its own classification, premium-rate, and reconciliation framework. If the engagement requires WSIB compliance, escalate to a dedicated Ontario payroll specialist or the WSIB Employer Account Services line. EHT and WSIB use different definitions of "remuneration". EHT includes taxable benefits, stock-option benefits, and bonuses; WSIB excludes amounts over the max insurable earnings cap and excludes certain benefits. Never assume one figure satisfies both. ## 11. Conservative defaults - **Default 1** — Assume not exempt until private-sector status and $5M associated-group cap are confirmed in writing. - **Default 2** — Apply the top rate (1.95%) when total Ontario remuneration is unknown but clearly over $400,000. - **Default 3** — Treat all Ontario-paid employees as Ontario-resident for EHT purposes unless evidence of out-of-province work performance is documented. - **Default 4** — Include all taxable benefits, bonuses, vacation pay, commissions, and stock-option benefits in remuneration. Exclude only items explicitly excluded under s. 1(1) of the Act (e.g., reimbursements of business expenses). _(s. 1(1) EHT Act)_ - **Default 5** — Assume monthly instalments are required if prior-year EHT cannot be confirmed. Setting up monthly instalments mid-year is much cheaper than catching up late. - **Default 6** — Register early. If approaching $1M payroll, register before crossing the threshold to avoid retroactive penalties. - **Default 7** — For associated groups, allocate exemption to the highest-payroll member first unless tax planning suggests otherwise (the allocation is binding for the year once filed — get sign-off from the group's tax advisor before submitting Form ON00150E). - **Default 8** — March 15 is a hard deadline. Late filing penalty starts immediately; do not assume any administrative grace period. - **Default 9** — Reconcile EHT remuneration to T4 Box 14 totals as a final review step; document any variance. - **Default 10** — Refer all WSIB questions out. EHT scope only. ## 12. Sources - **Employer Health Tax Act, R.S.O. 1990, c. E.11.** Particularly: - s. 1(1) — definitions of "remuneration," "permanent establishment," "eligible employer." - s. 1(2) — associated-employer rule, incorporating s. 256 ITA. - s. 2 — imposition of tax; rate schedule. - s. 2.1 — multi-account treatment for registered charities. - s. 2.2 — sharing of exemption among associated employers. - s. 3 — annual return and instalment requirements. - **Ontario Ministry of Finance — Employer Health Tax guides and bulletins:** - *Employer Health Tax — Tax Bulletin* (Ministry of Finance, current as of 2025). - *Form 6076E — Employer Health Tax Annual Return* and instructions. - *Form ON00150E — Associated Employers Exemption Allocation*. - Ministry of Finance ONT-TAXS online portal. - **2020 Ontario Economic Outlook and Fiscal Review** (March 25, 2020) — permanently raised the exemption from $490,000 to $1,000,000 effective 2020. - **Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A** — referenced in §10 for scope boundary only. - **Income Tax Act (Canada), s. 256** — association rules incorporated by reference under s. 1(2) EHT Act. **Verification status:** pending. This skill must be reviewed and signed off by a credentialed Ontario tax practitioner (CPA Ontario member in good standing with current Ontario payroll-tax experience) before reliance for client work. Coordinate with **canada-payroll** for federal CPP/EI/income-tax-withholding obligations on the same payroll base. ## Talk to a verified accountant This skill is a tool, not an engagement. Every taxpayer's situation is different, and the rules in the skill may not match your specific facts. 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