Employer Payroll Tax Calculator Ontario

Ontario employers must pay payroll taxes on employee wages, including federal and provincial contributions. This calculator helps you estimate your employer payroll tax obligations based on your employees' wages.

How to Calculate Employer Payroll Taxes in Ontario

Employer payroll taxes in Ontario consist of several components that must be calculated and paid regularly. The main components are:

1. Canada Pension Plan (CPP)

The CPP is a retirement savings program where both employers and employees contribute. The employer's contribution rate is 5.1% of the employee's earnings.

2. Employment Insurance (EI)

EI provides income protection for workers who become unemployed through no fault of their own. The employer contribution rate is 1.6% of the employee's earnings.

3. Federal Payroll Taxes

Federal payroll taxes include the Canada Pension Plan (CPP) and the Employment Insurance (EI) contributions, as well as the federal income tax withholding.

4. Provincial Payroll Taxes

Ontario employers must also pay provincial payroll taxes, which include the Ontario Health Premium and the Ontario Pension Plan (OPP).

Employer Payroll Tax Formula

Total Employer Payroll Tax = (Employee Wages × CPP Rate) + (Employee Wages × EI Rate) + (Employee Wages × Federal Income Tax Rate) + (Employee Wages × Ontario Health Premium Rate) + (Employee Wages × OPP Rate)

To calculate your employer payroll taxes, you'll need to know your employees' total wages for the pay period and apply the appropriate tax rates.

Ontario Employer Payroll Tax Rates

The current employer payroll tax rates in Ontario are as follows:

Tax Type	Rate
Canada Pension Plan (CPP)	5.1%
Employment Insurance (EI)	1.6%
Federal Income Tax	Variable (based on employee's tax bracket)
Ontario Health Premium	1.45%
Ontario Pension Plan (OPP)	0.05%

Note: The federal income tax rate varies depending on the employee's taxable income. The rates shown above are approximate and may change based on government policy updates.

Employer payroll taxes are typically paid on a weekly, bi-weekly, or monthly basis, depending on your payroll schedule.

Example Calculation

Let's calculate the employer payroll taxes for an employee earning $2,500 per month.

Step 1: Calculate CPP

$2,500 × 5.1% = $127.50

Step 2: Calculate EI

$2,500 × 1.6% = $40.00

Step 3: Calculate Federal Income Tax

Assuming a federal income tax rate of 20.5%: $2,500 × 20.5% = $512.50

Step 4: Calculate Ontario Health Premium

$2,500 × 1.45% = $36.25

Step 5: Calculate OPP

$2,500 × 0.05% = $1.25

Total Employer Payroll Tax

$127.50 + $40.00 + $512.50 + $36.25 + $1.25 = $717.50

So, for an employee earning $2,500 per month, the employer would pay approximately $717.50 in payroll taxes.

Frequently Asked Questions

What are the main employer payroll taxes in Ontario?

The main employer payroll taxes in Ontario include Canada Pension Plan (CPP), Employment Insurance (EI), federal income tax, Ontario Health Premium, and Ontario Pension Plan (OPP).

How often are employer payroll taxes paid?

Employer payroll taxes are typically paid on a weekly, bi-weekly, or monthly basis, depending on your payroll schedule.

Can employer payroll taxes be deducted from employee wages?

Yes, employer payroll taxes can be deducted from employee wages and remitted to the government by your payroll service provider.

Are there any exemptions for employer payroll taxes?

There are no exemptions for employer payroll taxes in Ontario. All employers must pay these taxes on their employees' wages.