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Tax and Payment Deferral Programs: Provincial Support for Small Businesses

To date, we have focused our attention mainly on the available federal programs that provide support for small businesses.
However, the Ontario government has also announced several programs designed to help our business community navigate COVID-19. There are two in particular that most creative firms will benefit from including a one-time increase to EHT thresholds and EHT and WSIB payment deferrals. Let’s take a closer look. 

Employer Health Tax

The government is cutting taxes by $355 million for about 57,000 employers by proposing a temporary increase to the Employer Health Tax (EHT) exemption from $490,000 to $1 million for 2020. With this plan, more than 90 per cent of private-sector employers would not pay EHT in 2020.

Eligible private-sector employers with annual payrolls up to $5 million would be exempt from EHT on the first $1 million of total Ontario remuneration in 2020. The maximum EHT relief from the exemption would increase by $9,945 to $19,500 for 2020 for eligible employers.

For businesses that have a payroll in excess of $1 million, this means an additional $9,555 in payroll savings this year. 

The exemption would return to its current level of $490,000 on January 1, 2021.

Employer Health Tax and WSIB Payment Deferrals           

To help small businesses maintain their cash flow, the Ontario government announced payment deferral programs on a number of provincially administered programs.

This includes:

  • Provincial tax deferrals on the Employer Health Tax (EHT) until August 31, 2020 with no interest or penalty.
  • WSIB premium deferrals until August 31, 2020 with no interest or penalty

For a complete list of the provincial economic action programs, click here.

Looking for more information on government programs for small businesses? Check out these posts:

Our team at FIN/ALLY is here to support you and your business during this challenging time. If you have questions about any of the programs we’ve covered or ones we haven’t, send us an email and we would be happy to connect.