Published | Category : Source deductions and contributions

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

Starting in 2017, the health services fund contribution rate applicable to an employer whose total payroll for a given year is less than $5 million will be gradually reduced over a period of five years.

For 2017, if you are an employer in the primary and manufacturing sectors and 50% of your total payroll is related to activities grouped under codes 11, 21 and 31 to 33 of the North American Industry Classification System (NAICS) (see Statistics Canada's website for a description of each code), 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 1.55%.
  • If your total payroll is between $1 million and $5 million, your contribution rate (W) will be determined using the following formula:
W (%) = 0.8725 + 0.6775 × 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 2.5%.
  • If your total payroll is between $1 million and $5 million, your contribution rate (W) will be determined using the following formula:
W (%) = 2.06 + 0.44 × S
where  S = total payroll $ 1,000,000
  • If your total payroll is $5 million or more, your contribution rate will be 4.26%.

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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