# Month-end close: payroll in Ontario Ontario adds the Employer Health Tax, with a $1 million exemption for employers under $5 million of payroll, and WSIB premiums reported by payroll size. This is part of the [payroll checklist](/month-end-close-checklist/payroll). Do the [Canada steps](/month-end-close-checklist/payroll/canada) first. Ontario adds the Employer Health Tax, filed with the Ontario Ministry of Finance, and premiums to the WSIB. **Rate.** The Employer Health Tax (EHT) is 0.98% on the whole payroll when it is up to $200,000, and 1.95% over $400,000. The band is set on payroll before the $1 million exemption comes off. **Filing.** EHT is an annual return, with monthly instalments only once payroll passes $1.2 million. WSIB is monthly at $1,000,000 or more of annual payroll, quarterly from $20,000, and annual below that. **Due.** EHT by March 15, and instalments on the 15th of the following month. WSIB quarterly on April 30, July 31, October 31 and January 31, and annual on April 30. **The trap.** A late EHT return costs 5% of the amount owing if it is $1,000 or more, plus 1% for each complete month, up to 12. From December 1, 2026, banks no longer take paper vouchers for EHT. ## The month-end steps 1. **Check whether the EHT exemption applies.** The exemption is $1 million. An employer can claim it if its Ontario payroll, with that of any associated employers, is under $5 million, or if it is a registered charity. Above $5 million of payroll there is no exemption, except for registered charities [1] [2]. Done when the exemption decision for the client is on file. 2. **Check the EHT rate.** The rate follows total Ontario remuneration before the exemption comes off [1]. Done when the EHT liability account equals the year's payroll less the exemption, times the rate for the band the full payroll falls in. | # | Total Ontario remuneration | Rate [1] | |---|---|---| | 1 | Up to $200,000 | 0.98% | | 2 | $200,000.01 to $230,000 | 1.101% | | 3 | $230,000.01 to $260,000 | 1.223% | | 4 | $260,000.01 to $290,000 | 1.344% | | 5 | $290,000.01 to $320,000 | 1.465% | | 6 | $320,000.01 to $350,000 | 1.586% | | 7 | $350,000.01 to $380,000 | 1.708% | | 8 | $380,000.01 to $400,000 | 1.829% | | 9 | Over $400,000 | 1.95% | For example, an employer with $1,300,000 of Ontario payroll uses 1.95%, takes off the $1,000,000 exemption, and owes 1.95% of $300,000, which is $5,850 [1]. 3. **Schedule the EHT return and instalments.** The annual return and any payment are due on or before March 15 [1]. A business with payroll over $1,200,000 must pay monthly instalments: once cumulative payroll passes $1.2 million, it remits the portion above the allowable exemption on the 15th of the following month [1]. From December 1, 2026, financial institutions no longer accept paper remittance vouchers for in-person bill payments, so a client that pays EHT that way needs another method [1]. Done when the March 15 date and any instalment dates are on the client's calendar. 4. **Know what a late EHT return costs.** The penalty is 5% of the amount owing on the due date if that is $1,000 or more, plus 1% of the amount owing for each complete month until the return is received, up to 12 months [1]. Done when the return went in by March 15, or the client has been told. 5. **Find the WSIB reporting frequency.** It follows annual payroll. Reporting payroll and paying premiums are two steps, and a late report and a late payment each carry a fee [3]. Done when the client's frequency matches its WSIB account. | # | Annual payroll | Report and pay | Due [3] | |---|---|---|---| | 1 | $1,000,000 or more | Monthly | The end of the following month | | 2 | $20,000 to $999,999.99 | Quarterly | April 30, July 31, October 31 and January 31 | | 3 | Less than $20,000 | Annually | April 30 | 6. **Check the WSIB figures.** The 2026 maximum insurable earnings is $121,700. The average premium rate is $1.23 per $100 of insurable payroll, but each employer's own rate depends on its class [4]. Done when the premium on the register uses the client's own rate and stops at the maximum. 7. **Check vacation.** An employee with under five years of employment is entitled to two weeks of vacation and pay of at least 4% of gross wages, not counting vacation pay. With five or more years it is three weeks and at least 6%. An employee who reaches five years partway through a year gets 6% of that whole year's wages [5]. Done when the vacation accrual uses 4% or 6% by length of service. 8. **Tie the liabilities.** Done when the EHT and WSIB accounts are at zero after the month's payments, or equal the amounts not yet due. The CRA remittances are on the [Canada payroll page](/month-end-close-checklist/payroll/canada). ## Sources 1. Ontario Ministry of Finance, Employer Health Tax, read 2026-10-24: $1 million exemption; rates by total Ontario remuneration before the exemption, 0.98% up to $200,000 to 1.95% over $400,000; annual return and payment due March 15; monthly instalments once payroll exceeds $1.2 million, on the 15th of the following month; late return penalty 5% of the amount owing if $1,000 or more plus 1% per complete month up to 12; from December 1, 2026 financial institutions no longer accept paper remittance vouchers. 2. Ontario Ministry of Finance, EHT exemption, read 2026-10-24: no exemption for employers with more than $5 million of annual Ontario payroll, including associated employers, except registered charities. 3. WSIB, How to report and pay your premiums, read 2026-10-24: reporting frequency by annual payroll (monthly $1,000,000 or more, quarterly $20,000 to $999,999.99, annual less than $20,000); due dates; fee for a late report and for a late payment. 4. WSIB, 2026 premium rates, read 2026-10-24: maximum insurable earnings $121,700; average premium rate $1.23 per $100 of insurable payroll. 5. Ontario, Your guide to the Employment Standards Act, Vacation, read 2026-10-24: two weeks under five years, three weeks from five years; vacation pay at least 4% of gross wages, 6% from five years of employment. --- Published 2026-10-24. Web page: https://www.bookkeepingforsmallbusiness.com/month-end-close-checklist/payroll/ontario Part of [Month-end close: payroll liabilities by jurisdiction](https://www.bookkeepingforsmallbusiness.com/month-end-close-checklist/payroll).