Monthly Reporting: EHT Calculation & Rounding Functionality

Monthly EHT Calculation and Rounding Functionality

GOAL: To provide an overview of how the EHT (Employer Health Tax) calculation in the Monthly Employer Health Tax can periodically appear to be off by around $1-2 under each Monthly Reporting period due to Employee level rounding extrapolated over thousands of records. 

This article aims to address the concern that users may have when the Employer Health Tax Monthly Report is run, and the Total Health Tax varies from the Total Taxable Amount * EHT Rate slightly, often by a dollar or two. 

This documentation illustrates how the nature of the calculation and rounding used at the Employee level can cause very slight discrepancies that are normal, when viewed over a reporting period in totality. 

PROCESS OVERVIEW

 PAYROLL > BOARD > CPP, EIC, EHT, WSIB

**EHT Rate is configured to 1.95% for 2026**

2025 EHT = 1.95% as well

**EHT Rate = 1.95%**

PAYROLL > REPORTING MENU > MONTHLY REPORTING > HEALTH TAX CALCULATION

**2026 >> January >> Submit**

REPORTS > PROCESS REPORTS > HEALTH TAX CALCULATION REPORT

**JANUARY REPORT**

Here we can see ~$1 difference from the exact math of Total Taxable Amount * EHT Rate.

Secondary Sample: 2025 DECEMBER REPORT

Here we can see ~$1.75 difference from the exact math of Total Taxable Amount * EHT Rate.

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Root Cause Analysis and Explanation:

When investigated further, the source of the minor discrepancy within the calculation is identified.

The variance occurs because the system calculates and rounds Employer Health Tax (EHT) at the individual employee level, while the report reflects the aggregate total for the entire reporting period.

EHT is calculated at 1.95% of employee assessable earnings. During this calculation, the system may generate values with several decimal places before rounding to the nearest cent. Because rounding occurs at the employee level, small fractional amounts (portions of a cent) may be rounded up or down.

When this rounding occurs across thousands of employees, the cumulative effect can produce a small variance—typically around $1–$2—between the summed employee-level calculations and the aggregated report total.

This behavior is expected and by design, and it aligns with how the system calculates and reports Ontario EHT.

To validate this behavior, a sample employee pay record was reviewed in TCHELEM/ACTIVE (EID 1041).

Rounding Calculation Demonstration:

PAYROLL > GROUP DATA > SUBJECT ENTITY MAINTENANCE > TCHELEM >> Subject = EHT

**EHT applicable Entity Types listed above**

Review Employee Pay Records to manually verify calculation and potential rounding. 

select AMOUNT, * from EC_EMPLOYEE_PAY_RECORD

where EMPLOYEE_ID = 'xxxx'

and PAY_NUMBER = 'YYYYNN'

and ENTITY_TYPE in ('OTHER_PAYMENT', 'SALARY', 'ALLOWANCE')

**TOTAL = 4,997.71**

4,997.71 * 0.0195 = 97.455345

**This would round to 97.46**

Therefore, the system would round off 0.004655, or about half a cent. 

This outcome is then extrapolated across thousands of EID on a per month basis.