Canadian Employer Health Tax - Supplier Property – Avionte Classic

Overview

Updated 05/12/2022

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The calculation of Canadian Employer Health Tax is not handled by Vertex. A special procedure to insert these Employer Taxes for the Provinces of Ontario, British Columbia, Manitoba and Newfoundland and Labrador is done at time of implementation.

Note: Placing an End Date record mid-year is not retroactively applied; only going forward.

Logic
Manual rates (Override default)
Example of Health Tax for Manitoba
2022 Health Taxes
British Columbia (BC)
Ontario (ON)
Manitoba (MB)
Newfoundland Labrador (NL)

Logic

By default, the Tax Record will not display, but will adhere to the following logic:

Current year remuneration up to the Default Exemption value will result in no Employer Health Tax calculation.
Once the remuneration exceeds the Default Exemption, the Employer Health Tax will start calculating at the provincial Default Rate.

Manual rates (Override default)

By creating a new Tax Record for Canadian Employer Health Taxes for the provinces of Ontario [ON EHT ER], Manitoba [MB HELEVY ER], and British Columbia [BC EHT ER], this will override the automated logic.

Note: The province of Newfoundland and Labrador [NL HAPSET ER] rate will always default to the automated logic). Creating a new record mid-year is not retroactively applied.

Click on the Admin Tools button
Click on Employer
Double click on the Employer to add
Click on the Tax tab
Click on the Add New button
Select the Canadian Employer Health Tax Name
1. MB HELEVY ER
2. ON EHT ER
3. NL HAPSET ER
4. BC EHT ER
Enter the applicable tax rate
1. Employer Health tax will calculate at the rate specified
2. Blank or 0 will not return any calculation
Note: NO EXEMPTION will be applied if you create a new record for Manitoba, Ontario or British Columbia. It will start calculating immediately.
Override Exemption checkbox will allow the user to enter and Override Exemption Value [This would only be used in the case of multiple associated employers]
Enter an applicable Exemption amount
Enter the Start and End Dates for the year, for that rate.
1. Any date after the End Date, the system will use the Logic described above.
2. Click here to go to the Logic section
3. If the rate is 0 (either due to it being in the exempt tier or due to the user entering a rate of 0 in admin tools) the tax will not appear on the check.

End Dating a record will result in the system using the calculation defined in the Canadian Employer Health Tax – Automated Logic after that end date.
- By end dating a record, the system should default to the Automated Logic for the remainder of the year. End Dating a record mid-year is not retroactively applied.
Or select the Apply Defaults button to have the system automatically populate the default rate and default exemption values for that province.

Example of Health Tax for Manitoba

No tax record has been created for MB HELEVY ER, the system will use the Canadian Employer Health Tax – Automated Logic for Manitoba.
1. Current Year-to-date Remuneration = 2 million. Current pay $2,000 wages, MB HELEVY ER calculation = 2,000 x 4.3%.
MB HELEVY ER tax record has been created, with Tax Percentage = 0 [or blank]
1. Current Year-to-date Remuneration = 2 million. Current pay $2,000 wages, MB HELEVY ER calculation does not occur.
MB HELEVY ER tax record has been created, with Tax Percentage = 2.15%
1. Current Year-to-date Remuneration = 0. Current pay $2,000 wages, MB HELEVY ER calculation = 2,000 x 2.15% [no exemption applied].
MB HELEVY ER tax record has been created, with Tax Percentage = 4.3%, Exemption = $1,000,000 is split among associated employers
1. Current Year-to-date Remuneration = 1,250,000. Current pay $2,000 wages, MB HELEVY ER calculation = 2,000 x 4.3% [exemption applied].
MB HELEVY ER tax record has been created, with Tax Percentage = 4.3%, Exemption = $1,000,000 is split among associated employers. Associated employer 2 is closed, the user wants to go back to the defaults. They can end date the record, or Apply Defaults to get the rate and exemption default populated.
1. Current Year-to-date Remuneration = 2,250,000. Current pay $2,000 wages, MB HELEVY ER calculation = 2,000 x 4.3% [exemption 1750000 applied].