For businesses operating in provinces with Harmonized Sales Tax (HST) and the Employer Health Tax (EHT) in Ontario, managing these tax obligations efficiently is essential. Here are some practical tips to help businesses navigate their HST and EHT responsibilities effectively:
Managing HST and EHT:
HST Management:
Understand Taxable Items:
Familiarize yourself with the types of goods and services subject to HST. Some items might be exempt or zero-rated, affecting how you charge and remit HST.
Accurate Record Keeping:
Maintain meticulous records of your sales, purchases, and HST collected. This will help ensure accurate reporting and make the process smoother during tax filing periods.
Choose Reliable Software:
Invest in reliable accounting or e-commerce software that can automate HST calculations and help you generate accurate reports.
File and Remit on Time:
Timely filing and remittance of HST are crucial to avoid penalties. Set reminders or use automated systems to ensure you meet deadlines.
Stay Updated:
Tax regulations can change, affecting HST rates or exemptions. Stay informed about any updates to ensure compliance.
EHT Management:
Determine EHT Liability:
Regularly assess whether your business’s payroll exceeds the EHT threshold. If it does, you’ll need to calculate and remit EHT.
Review Exemptions:
Be aware of EHT exemptions for specific types of employers, such as charities or non-profit organizations. Ensure you qualify for any exemptions you’re claiming.
Accurate Payroll Records:
Maintain accurate records of employee remuneration, as this information is crucial for calculating EHT liability.
Use Payroll Software:
Consider using payroll software that can assist with EHT calculations, reducing the risk of errors.
Plan for Deadlines:
Mark EHT remittance deadlines on your calendar and set up systems to ensure timely payments.
Professional Advice:
If your business has complex payroll structures or you’re unsure about EHT requirements, consult a tax professional to ensure compliance.
By following these tips, businesses can effectively manage their HST and EHT obligations, ensuring accurate reporting, timely remittance, and compliance with tax laws.
