168  /  

Notes

(1)  Payroll, in general, includes all payments, benefits and allowances included in computing 

employment income under the Income Tax Act. Payroll may also be deemed to include 

such payments made by associated employers.

(2)  In addition to the Health Services Fund (HSF), Québec also levies a Manpower Training 

Tax. Employers whose payroll exceeds $1 million must allot at least 1% of their payroll to 

eligible training expenditures. Employers whose eligible training expenditures are lower 

than the minimum required participation must make a contribution equal to the difference 

between the two amounts. The employer must remit this contribution by the last day of 

February of the following year. 

Most Québec employers also have a requirement to contribute to the financing of the 

Commission des normes du travail. For 2013, remuneration of up to $67,500 paid to 

an employee is subject to a contribution rate of 0.08%. The employer must remit this 

contribution by the last day of February in the following year.  

(3)  Employers with annual payroll over $2.5 million are subject to the 2.15% rate with no 

exemption amount. Annual payroll of $1.25 million or less is exempt from tax. Annual 

payroll between $1.25 million and $2.5 million is subject to a rate of 4.3% of the amount  

in excess of $1.25 million. 

(4)  Employers with annual payroll over $5 million are subject to the 4.26% rate. Employers 

are entitled to a gradual reduction in the contribution rate if their total annual payroll is 

less than $5 million. The contribution rate for payroll between $1 million and $5 million is 

calculated using the formula [2.31 + (0.39 × total payroll/$1 million)]. If annual payroll is 

less than $1 million, the rate is 2.7%.

(5)   Each province has specific eligibility criteria to obtain the exemption. In most cases, 

the exemption must be prorated among associated corporations and certain corporate 

partnerships.

Provincial Payroll and Health Fund Taxes

1

Manitoba Health 

and Post-Secondary 

Education Tax

Ontario Employer  

Health Tax

Tax rate

2.15%

3

1.95%

Exempt remuneration

5

$1,250,000

3

$400,000

Instalment period

Monthly

7

Monthly

8

Annual filing deadline

March 31

March 15

Assessment period

6 years

4 years

Refund period

2 years

4 years

Appeal deadline

12

90 days

180 days

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Current as of June 30, 2013