Employer health tax by province

How this is calculated

An employer health tax is charged on your total payroll rather than on any individual’s pay, and it is the employer’s cost alone: nothing is withheld from anyone. Because it sits outside the CRA’s payroll deductions entirely, it is missing from PDOC and from most payroll calculators, which is how it ends up being discovered late.

Where it exists, the shape differs by province:

• Ontario gives a $1,000,000 exemption and picks the rate from a nine-band ladder: and the rate is chosen by your payroll before the exemption is deducted, which is easy to get backwards. Above $5,000,000 the exemption disappears entirely.
• British Columbia exempts the first $1,000,000, then charges a 5.85% notch rate on the excess up to $1,500,000. Above that the exemption is gone and 1.95% applies to total remuneration, not the excess: the jump across that line is larger than people expect.
• Manitoba raised its exemption to $2,500,000 on 1 January 2026. Between $2.5M and $5M a 4.3% notch applies to the excess; above $5M, 2.15% applies to the whole payroll.
• Quebec has no exemption at all: the rate applies from the first dollar, starting at 1.65% for service employers or 1.25% for primary and manufacturing ones, and rising to 4.26% at $7,800,000.
• Newfoundland and Labrador charges 2% above a $2,000,000 exemption.

Every one of these thresholds applies to an associated group, not to each company separately. Splitting a payroll across two corporations you control does not buy you two exemptions.

Comma does not run payroll. What it does is keep the books underneath it: import the payroll journal your provider produces, and reconcile the resulting liability accounts so what you owe each authority is a number you can see rather than one you rebuild at year-end.