Is an employer's group RRSP match subject to Ontario EHT?
Yes. Ontario's remuneration guidance states that employer contributions to or matching amounts for group RRSP contributions are taxable and subject to EHT.
Group Retirement · Ontario EHT
Does Ontario Employer Health Tax apply to a group RRSP match?
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Yes. Ontario's Employer Health Tax guidance says it in one sentence: "Employer contributions to or matching amounts for your group RRSP contributions are taxable and are subject to EHT" (Ontario.ca, EHT remuneration guidance, updated May 22, 2026). The same guidance excludes deferred profit sharing plans from EHT entirely. For an Ontario employer above the exemption, the choice between matching into the group RRSP and contributing through a DPSP is a real payroll-tax decision, not a technicality.
$2,984
rough annual EHT on a $153,000 match at the top rate
$1M
Ontario EHT exemption for eligible employers
1.95%
top Ontario Employer Health Tax rate
What the difference costs, in dollars
Take a 50-person Ontario company from our worked cost example: about $153,000 a year of employer money into the plan, and total Ontario payroll around $4.25 million (50 people at an $85,000 average salary, the same assumptions as that example), which puts it above the $1 million exemption and below the $5 million eligibility ceiling (every figure here is illustrative; your payroll sets your number).
Paid as a group RRSP match, that $153,000 is EHT-taxable remuneration. At Ontario's top EHT rate of 1.95 percent, the match adds roughly $2,984 of EHT every year. Paid as employer DPSP contributions, the same dollars sit on Ontario's excluded list and add zero EHT. Same money into the same employees' retirement accounts; about three thousand dollars a year of tax difference, every year the plan runs.
$153,000 × 1.95% = $2,983.50 ("roughly $2,984").
That is not the whole decision. DPSP membership excludes owners and 10-percent-plus shareholders, DPSP dollars can vest over up to 24 months, and plan design has more moving parts than one tax line. But it is the line nobody seems to put a number on, so we did.
The exemption, precisely
Two numbers get mixed up constantly, so here they are separated. The exemption amount is $1 million: eligible employers pay EHT only on Ontario remuneration above it. The $5 million figure is an eligibility ceiling: employers with more than $5 million in annual Ontario payroll (alone or as an associated group) cannot claim the exemption at all, with a carve-out for registered charities. Rates scale from 0.98 percent to 1.95 percent, with the top rate applying once payroll passes $400,000. The exemption's next inflation adjustment was moved to January 1, 2029 (Ontario.ca, EHT tax exemption guidance, updated May 22, 2026).
A useful consequence: an Ontario employer whose total payroll sits under $1 million pays no EHT anyway, so for the smallest companies this page is a future consideration, not a current cost.
One trap worth naming
A DPSP is excluded from EHT. An EPSP, an employee profit sharing plan, is not: Ontario's guidance treats employer EPSP contributions as remuneration subject to EHT when contributed. The two names are one letter apart and tax-opposite. If a proposal in front of you says "profit sharing," make sure which one it means.
Where this fits in plan design
We design group RRSP and DPSP structures for Ontario employers as one decision: match level, eligibility, vesting, owner participation, and the EHT line above, reviewed together on a ten-minute call and then annually. The broader tax picture, including how the CRA treats the match on the employee side, lives here: the employer tax-advantages guide. What the whole plan costs a 50-person company: our worked 50-person example.
Ontario EHT questions employers ask
Are DPSP contributions subject to EHT?
No. Deferred profit sharing plans appear on Ontario's list of prescribed plans whose employer contributions are excluded from EHT remuneration.
Is an EPSP treated like a DPSP for EHT?
No, and the near-identical names are a trap. Employer contributions to an employee profit sharing plan are EHT-taxable remuneration when contributed; DPSP contributions are excluded.
How much is the EHT exemption?
$1 million of Ontario remuneration for eligible employers. Employers over $5 million in annual Ontario payroll cannot claim it; charities are the exception. The next inflation adjustment is scheduled for January 1, 2029.
Does a group RRSP match attract EHT if our payroll is under $1 million?
If you are an eligible employer fully inside the exemption, no EHT is payable in practice; the treatment starts to matter as payroll grows past the exemption.
Does anything similar apply in Alberta?
No. Alberta charges no provincial payroll tax or health premium, so in Alberta this particular RRSP-versus-DPSP question is about vesting and owner eligibility rather than payroll tax. More on the federal side: the employer tax-advantages guide.
Prepared by RiskX
Written by Jarod Smith, CEO, RiskX Insurance Brokers Inc. Reviewed by Gordon Smith, RiskX Insurance Brokers Inc.
Published: August 20, 2026. Updated: August 20, 2026.
Group retirement