Ontario tax facts for corporations

Reviewed by EverStone CPA · July 2026

Ontario collapses sales tax into a single HST but adds a graduated employer health tax and a registry return with a deadline of its own. The provincial figures a corporation needs, in tables, with the government source named under each one.

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Quick answer: Ontario taxes small-business corporate income at 3.2% and general income at 11.5%, on a $500,000 business limit. The province uses a single 13% HST rather than separate GST and PST, and employer health tax applies once Ontario payroll exceeds the $1,000,000 exemption.

Shape of the Ontario tax obligations for a corporation: a single harmonised sales tax with no separate provincial registration and fully recoverable input tax, an employer health tax whose rate is chosen before the exemption is deducted plus WSIB coverage, and one T2 carrying both tax layers alongside an annual return to the Ontario Business Registry keyed to the fiscal year end — One harmonised sales tax, but a payroll tax and its own registry.

Corporate income tax

Ontario rates, and the combined figure that matters

Ontario has a corporate tax collection agreement with the federal government, so one T2 return carries both layers of tax. The provincial rate is simply added to the federal net rate of 9% on income eligible for the small business deduction and 15% on the rest.

Ontario corporate income tax rates — 2026 tax year
Measure	Provincial	Federal	Combined
Lower (small-business) rate	3.2%	9%	12.2%
Higher (general) rate	11.5%	15%	26.5%
Business limit	$500,000

Provincial rates and business limit per the Canada Revenue Agency Corporation tax rates table; federal net rates from the same page. Retrieved 31 July 2026.

Ontario’s 3.2% lower rate is the highest small-business rate among the provinces on the CRA table, while its 11.5% general rate is among the lowest. The practical effect is a narrower gap — 14.3 points between the two combined rates — than a business owner moving from western Canada usually expects.

Sales tax

One tax, one registration, one return

Ontario harmonised its provincial sales tax with the GST, so a single 13% HST covers both and is administered federally. There is no separate provincial registration and no non-recoverable provincial component: HST paid on business inputs is claimed back through input tax credits in the ordinary way, which is the structural difference from a PST province.

Sales tax in Ontario — rates in effect July 2026
Tax	Rate	Composition	Administered by
HST	13%	5% federal + 8% provincial	Canada Revenue Agency
Separate PST	None	—	—

Rate per the Canada Revenue Agency GST/HST rates by province table, which lists Ontario at 13% with no separate PST. Retrieved 31 July 2026.

Payroll

Employer health tax is graduated, and the rate is set before the exemption

Ontario’s employer health tax has a feature that catches people out: your rate is chosen from the table below using total Ontario remuneration before the exemption is deducted, and only then is the exemption subtracted from the taxable base.

Ontario employer health tax rates — 2026 calendar year
Total Ontario payroll (before exemption)	Rate
Up to $200,000.00	0.98%
$200,000.01 to $230,000.00	1.101%
$230,000.01 to $260,000.00	1.223%
$260,000.01 to $290,000.00	1.344%
$290,000.01 to $320,000.00	1.465%
$320,000.01 to $350,000.00	1.586%
$350,000.01 to $380,000.00	1.708%
$380,000.01 to $400,000.00	1.829%
Over $400,000.00	1.95%

Per the Ontario Ministry of Finance, Employer Health Tax (EHT). The exemption is $1,000,000 and is scheduled for inflation adjustment on 1 January 2029; no exemption is available where an employer or its associated group has more than $5,000,000 of annual Ontario payroll. Retrieved 31 July 2026.

Workplace coverage is administered by the Workplace Safety and Insurance Board, which is entirely separate from the Ministry of Finance and carries its own registration, classification and clearance obligations.

Corporate registry

The annual return moved, and the deadline follows your year-end

Ontario corporate registry obligations — current July 2026
Item	Ontario
Registry	Ontario Business Registry (OBR)
Annual filing	Annual Return
Due	Within 6 months of fiscal year-end
Other OBR filings	Initial Return, Notice of Change, Articles of Amendment as applicable
Workers’ compensation	Workplace Safety and Insurance Board (WSIB)

Per the Government of Ontario, Ontario Business Registry. Retrieved 31 July 2026.

Because the annual return is now filed directly through the registry rather than riding along with a tax return, it is genuinely possible to file a perfect T2 and still fall out of good standing. Diarise it against your year-end, not your incorporation date. Our T2 deadline guide covers the federal side of the same calendar.

Compare with other provinces

Same tables, different province.

BC tax facts →Manitoba tax facts →Atlantic Canada tax facts →Toronto accountant →GST/HST hub →

Common questions

Ontario tax facts FAQ

What is the combined corporate tax rate in Ontario?+

12.2% on active business income eligible for the small business deduction (9% federal plus 3.2% Ontario) and 26.5% on general income (15% federal plus 11.5% Ontario), per the CRA corporation tax rates table.

What is Ontario’s business limit?+

$500,000, matching the federal business limit. Income above it, or income that is not active business income, is taxed at the general rate rather than the lower rate.

What is the HST rate in Ontario?+

13%, made up of the 5% federal component and an 8% provincial component, collected as a single harmonised tax and administered by the CRA. There is no separate Ontario PST registration.

How is Ontario employer health tax calculated?+

Pick your rate from the payroll bands using total Ontario remuneration before any exemption, then apply that rate to remuneration after deducting the $1,000,000 exemption. Rates run from 0.98% up to 1.95% on payroll over $400,000.

Can every Ontario employer claim the $1,000,000 exemption?+

No. No exemption is available where the employer or its associated group has more than $5,000,000 of annual Ontario payroll, and associated employers must file an allocation agreement to share the one exemption between them.

When is an Ontario corporation’s annual return due?+

Within six months of fiscal year-end, filed through the Ontario Business Registry. It is a registry filing rather than a tax filing, so a corporation can be current with the CRA and still offside with the province.

How current are the figures on this page?+

Every rate and threshold here was confirmed against the CRA and Government of Ontario sources named beneath each table on 31 July 2026. Rates change; treat this as general information and confirm anything that drives a decision.

Running an Ontario corporation?

Corporate tax, HST and the payroll side handled by one CPA, entirely online. Book a free consult.

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