Employer Health Tax

Hi again, glenile,

You suspect correctly about needing to set it up manually. QuickBooks Desktop helps make things easy by having preset payroll items that apply to all of Canada, such as CPP and EI, but when it comes to more specific ones such as this, you can set it up for the rate and configurations you need for your province.

To set up the Employer Health Tax, Other Tax would likely be appropriate in this case. Get to the payroll item setup by clicking Lists from the top toolbar, then Payroll Item List. Choose New to begin. Going through the steps, you can pick that the Other Tax is paid by the company, name it, the rate, and more. To learn more about payroll item set up, click Help from the top toolbar, then QuickBooks Desktop Help — you can also use F1 as a shortcut to get there. Click over to the Help tab and then use the search button to bring up the search bar, where you can use keywords such as "payroll item" to find out more information.

If you're still not feeling sure, speaking with an accountant should help clear things up. We even have accountant users here in community that might be able to share their thoughts.

I hope that helps! See you next time. :)

What would be the difference between using Company Contribution vs Other Tax for this circumstance?

Hi readerreit,

Great question. The difference between Company Contributions and Other Tax is as follows.

Company Contribution is used for company-paid benefits and expenses, such as health or life insurance or company contributions to an employee pension plan. Often, this is used when there are two sides to a payroll item — an employee side and a company side — with this one set up to pair with the employee's contribution.

An Other Tax item is used for additional taxes taken from each pay cheque. During set up, you choose from "tax is paid by the employee" or "tax is paid by the company," and go from there. The reason Other Tax was suggested for the Employer Health Tax is because it is a tax.

If you're still not feeling sure which you should go with, consulting with an accountant is a great place to start. That way you can be sure you've got your payroll items set up correctly.

Let me know if you have more questions!

Hello Laura,

Is EHT is solely a tax paid by the employer not the employees?

Thanks

MG-2020

EHT is an employer paid tax. Employees pay nothing towards it