Published | Category: Source deductions and contributions

Reduced Rate of the Contribution to the Health Services Fund for Small and Medium-Sized Businesses

The health services fund contribution rate applicable to an employer whose total payroll for a given year is less than $5 million is being reduced each year from 2017 to 2021.

For 2018, if you are an employer in the primary and manufacturing sectors, and more than 50% of your total payroll is related to activities in these sectors (see the note below), your contribution rate will be determined as follows:

  • If your total payroll is less than or equal to $1 million, your contribution rate will be 1.50%.
  • If your total payroll is between $1 million and $5 million, your contribution rate (W) will be determined using the following formula:
    W (%) = 0.81 + 0.69 × S
    where S = total payroll $ 1,000,000
  • If your total payroll is $5 million or more, your contribution rate will be 4.26%.

In other cases, your contribution rate will be determined as follows:

  • If your total payroll is less than or equal to $1 million, your contribution rate will be 2.3%.
  • If your total payroll is between $1 million and $5 million, your contribution rate (W) will be determined using the following formula:
    W (%) = 1.81 + 0.49 × S
    where S = total payroll $ 1,000,000
  • If your total payroll is $5 million or more, your contribution rate will be 4.26%.
Note

The primary and manufacturing sector activities are classified under codes 11, 21 and 31–33 of the North American Industry Classification System (NAICS). For a description of the codes, visit the Statistics Canada website.

Temporary reduction of the contribution to the health services fund for the creation of specialized jobs

To take into account the reduced rate of the health services fund contribution for small and medium-sized businesses, the reduction rate in form LE-34.1.12-V, Reduction of the Contribution to the Health Services Fund: Creation of Specialized Jobs, will be adjusted each year from 2017 to 2020.

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