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Ontario payroll guide: EHT, WSIB & tax deductions (2026)

Running payroll in Ontario means more than CPP, EI and federal income tax. You also need to handle the Employer Health Tax (EHT), WSIB premiums, Ontario provincial income tax brackets, and Ontario-specific statutory holidays. This guide walks through each piece, with the 2026 numbers small businesses actually need.

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1. Ontario provincial income tax brackets (2026)

Ontario layers its own income tax on top of federal tax. The CRA's T4127 formulas build these brackets — plus the Ontario surtax and Ontario Health Premium — into every paycheque calculation.

Taxable incomeOntario tax rate
Up to $51,4465.05%
$51,446.01 – $102,8949.15%
$102,894.01 – $150,00011.16%
$150,000.01 – $220,00012.16%
Over $220,00013.16%

Ontario also applies a surtax of 20% on Ontario tax above $5,710 and an additional 36% on Ontario tax above $7,307. The Ontario Health Premium adds up to $900/year depending on taxable income.

2. Employer Health Tax (EHT)

EHT is a payroll tax paid by the employer on total Ontario remuneration. It is not deducted from employees. Most small businesses qualify for the EHT exemption.

  • Exemption: Eligible private-sector employers can claim an exemption on the first $1,000,000 of Ontario payroll per year. Associated employers share one exemption.
  • Rate: Above the exemption, EHT rates range from 0.98% to 1.95% on a sliding scale based on total Ontario payroll (1.95% once payroll exceeds $400K and the employer is not eligible for the exemption).
  • Filing: Annual return is due March 15 of the following year. Employers with payroll over $600,000 must make monthly installments.

3. WSIB premiums

The Workplace Safety and Insurance Board (WSIB) collects premiums from most Ontario employers to fund workers' compensation. Premium rates are class-based — each industry has its own rate per $100 of insurable earnings.

  • 2026 average rate: $1.30 per $100 of insurable earnings (your class rate may be higher or lower).
  • 2026 earnings ceiling: $117,000 per worker — earnings above that are not insurable.
  • Reporting: Most small employers report and pay quarterly; larger employers report monthly.
  • Mandatory for most industries (construction, manufacturing, retail, hospitality). A few sectors are optional — check WSIB's classification manual.

4. CPP, EI and federal tax (the CRA pieces)

These apply the same way as anywhere in Canada, calculated from CRA's 2026 T4127 formulas:

  • CPP: 5.95% on pensionable earnings between $3,500 and $71,300, plus CPP2 at 4.00% between $71,300 and $81,200. Employer matches.
  • EI: 1.64% on insurable earnings up to $65,700 (employee share). Employer pays 1.4× the employee rate.
  • Federal income tax: Based on the employee's TD1 federal claim codes.
  • Remittance schedule: Monthly by default — due the 15th of the following month. Quarterly remitters get extra time; accelerated remitters file more often.

5. Ontario statutory holidays

Ontario observes eight statutory holidays under the Employment Standards Act. Public holiday pay is calculated as total wages in the four work weeks before the holiday ÷ 20.

  • New Year's Day
  • Family Day (3rd Monday in February)
  • Good Friday
  • Victoria Day
  • Canada Day
  • Labour Day
  • Thanksgiving Day
  • Christmas Day

Boxing Day and Easter Monday are not statutory holidays in Ontario, although many employers grant them.

6. Ontario payroll compliance checklist

  • Register for a CRA payroll account (RP) before your first pay run.
  • Register with the Ontario Ministry of Finance for EHT if payroll may exceed the exemption.
  • Register with WSIB within 10 days of hiring your first employee (mandatory industries).
  • Collect TD1 (federal) and TD1ON (Ontario) forms from every employee.
  • Remit CRA payroll deductions by the 15th of the month following each pay period.
  • File T4 slips and T4 Summary by February 28 each year.
  • File the EHT annual return by March 15.
  • Reconcile WSIB earnings annually by March 31.

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Disclaimer: Rates and thresholds are provided for reference and reflect 2026 figures published by the CRA, the Ontario Ministry of Finance, and WSIB. Always confirm current rates with the official source before running payroll.