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CANADIAN PROVINCIAL HEALTH CARE - EHT#

For Canadian users, the Payroll Calculation Process (UPCALC) has the capability to calculate the Employer Health Tax (EHT) in the province of Ontario and British Columbia for employees who work in these provinces.

The EHT Annual Exemption amount would be taken into consideration when calculating the EHT amounts for all employees. EHT should not be calculated until the EHT annual exemption amount has been reached for the entire Company's Payroll remuneration in the province.

Starting January 2019, the EHT is enhanced to check the employer EHT annual exemption prior to calculating the EHT in a payrun.

The users can refer to the following web site for Ontario government Ministry of Finance:

https://www.fin.gov.on.ca/en/tax/eht/

SETUP#

EHT should not be calculated until the EHT annual exemption amount has been reached for the entire Company’s Payroll remuneration in each province. The EHT Annual Exemption amount is set up on IDGV screen for each province and would be taken into consideration by province when calculating the EHT amounts for all employees.

System supplied values:

• Lexicon X_GOVT_RATE_TYPE provided by the system:
  • 012002 - Ontario EHT Ann Max Exemption
  • 012003 - Ontario EHT YTD Cumulative Earn

• Lexicon X_CPRV_HEALTH_TAX_METHOD provided by the system:
  • 01 – Quebec - QHIP
  • 02 – Ontario - EHT
  • 03 – Manitoba - MHE
  • 04 – BC - EHT
  • 99 – Do Not Calculate

• Canada PC Usages provided by the system:
  • 5051 - ONT EHT Earnings (PPE)
  • 5052 - ONT EHT Employer Contribution
  • 5053 - ONT EHT Taxable Earnings
  • 5081 - BC EHT Earnings (PPE)
  • 5082 - BC EHT Employer Contribution
  • 5083 - BC EHT Taxable Earnings

User setup required:

IPPC – Pay Component set up

• If Ontario EHT is to be calculated, set up pay components for Ontario - PC Usages 5051, 5052, 5053.

• If BC EHT is to be calculated, set up pay components for British Columbia - PC Usages 5081, 5082, 5083.

• On IPPC, the pay components that are defined for PC Usage 5051 / 5081 EHT Earnings will store the IPPC Element amount that is subject to EHT calculation

• On IPPC, the pay components that are defined for PC Usage 5053 / 5083 EHT Taxable Earnings will store the EHT Earnings that are actually used to calculate EHT once the employee’s pay has reached the EHT annual exemption amount in the Payrun for that province, then after this pay, all pays in this Payrun will calculate EHT for that province

IDGV – EHT Rate and EHT Exemption amount set up

• On IDGV, user needs to set up EHT Rate, EHT Exemption amount as follows:
  • Select ‘Reg Type’ = ‘Cdn Health Ins Regis’
  • Select State = ‘Ontario’ or ‘British Columbia’
    • (i) Select ‘Govt Rate Type’ = ‘Cdn Health Ins Rate’, set up EHT rate
    • (ii) Select ‘Govt Rate Type’ = ‘EHT Ann Max Exemption’, set up EHT exemption, e.g. 450000
      
      Note: If 'Cdn EHT Ann Max Exemptions' is not setup, IPCT EHT Annual Exemption entry will be used.

IPRLC – CDN Tax Filing Information

• At employee level, on IPRLC screen Provincial tab for the field ‘Prov Health Tax Method’, please set up ‘Ontario – EHT’ or ‘BC – EHT’

EHT Processing from 2021#

• Effective Jan 01, 2019, UPCALC uses IDGV ‘Govt Regist Type’ = ‘Cdn Health Ins Regis’ entry for EHT calculation.

• Effective Jan 01, 2021, UPCALC uses IPCT ‘EHT Annual Exemption’ entry if the IDGV ‘Govt Regist Type’ = ‘Cdn Health Ins Regis’ entry for EHT Exemption is zero

entry for EHT Exemption is zero.

• UPCALC derives EHT Earnings from IPPC Element to store into pay components for PC Usage 5051, 5081.

• UPCALC calculates EHT contribution and stores the result into pay components for PC Usage 5052, 5082 once the pays have reached the EHT Annual exemption amounts.

• UPCALC will store the EHT Taxable Earnings into pay components for PC Usage 5053, 5083 once the EHT Annual exemption amounts are reached and the EHT contribution are being calculated.

• UPCLOZ accumulates each pay’s EHT Earnings with PC Usage 5051, 5081 under IDGV ‘Regist Type’ = ‘Cdn Health Ins Regis’ and ‘Govt Rate Type’ = ‘EHT YTD Cumulative Earn’.

• UPCALC reads IDGV Govt Rate Type’ = ‘EHT YTD Cumulative Earn’ entry from previous Payruns to determine if the Company’s entire payroll remuneration has reached the EHT Annual Exemption.

• Note that when UPCALC is run with Multi-Thread, there will be slight possibility that more than one employee are being processed at the same time in different thread to reach the EHT Annual Exemption. In this case, during the Payrun when the EHT starts the contribution, user needs to verify from RPREGC and after the pays are closed in UPCLOZ, user may need to make manual Adjustment to the one or two employees that started the EHT contribution.

• Once UPCALC starts the EHT calculation (after the EHT Annual Exemption amount has been reached in a payrun), then all Payruns for the remainder of the year will calculate EHT.

• After UPCLOZ, user can go into IDGV screen to check ‘EHT YTD Cumulative Earn’

• At the beginning of a calendar year, UPCALC / UPCLOZ will re-start the ‘EHT YTD Cumulative Earn’ by generating new effective date ‘Jan-01-YYYY’ according to Pay Issue date. User does not need to manually generate new effective date for a new year.

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Notes #

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