The Ontario Health Premium is paid by Ontario residents through Ontario’s personal income tax system. The revenues collected help fund health services in the province.
Who pays the premium?
The premium is based on income. If you were a resident of Ontario at the end of the year, and your taxable income (line 260 of your personal income tax and benefit return) is more than $20,000, you have to pay the premium. Individuals with taxable income of $20,000 or less are exempt.
If an individual is a Status Indian and earns income on a reserve, that income is generally tax exempt and, therefore, would not be included in taxable income, on which the premium is based. However, Status Indians who do not live and/or work on a reserve and who have taxable income over $20,000 pay the premium.
How is the premium collected?
The premium is deducted from pay and pensions of those with employment income or pension income of more than $20,000 a year, as part of federal and Ontario income tax. To ensure that employers do not incur added costs to change their payroll systems, the premium is included on pay stubs as a component of the income tax withheld.
Individuals who do not have taxes deducted at source or make instalment payments pay the premium when they file their personal income tax and benefit return.
Self-employed individuals and individuals who pay income tax instalments
Self-employed individuals who remit tax by instalments must include an estimated amount for the Ontario Health Premium. Instalment interest may be charged if these instalment payments are insufficient.
Seniors who do not receive employment income
Seniors who receive pension income of more than $20,000 a year will have the premium deducted at source along with other taxes. Seniors who receive income from other sources that are not subject to tax withholdings may wish to request an increase in the amount of tax withheld from their pensions by designating an additional amount on form TD1ON.
Alternatively, seniors may choose to have income tax withheld from Old Age Security (OAS) and Canada Pension Plan (CPP) benefits by completing and sending form ISP3520 to Employment and Social Development Canada.
Download form TD1ON, Ontario Personal Tax Credits Return from the Canada Revenue Agency
Download form ISP3520, Request for Voluntary Federal Income Tax Deductions from the Canada Revenue Agency
How much will my premium be this year?
The premium ranges from $0 if your taxable income is $20,000 or less, to $900 if your taxable income is more than $200,600.
The actual amount is calculated when you file your annual personal income tax and benefit return, on form ON428.
Ontario Health Premium rates
Download form ON428, Ontario Tax from the Canada Revenue Agency
The Ontario Health Premium is not linked to the Ontario Health Insurance Plan nor to an individual's eligibility to receive health care in Ontario.
When did the premium come into effect?
The premium came into effect for the 2004 tax year. The premium was first deducted from employee payrolls and pension cheques on July 1, 2004.
Is the premium based on combined family income?
No. The premium is based on individual taxable income. Regardless of whether someone is married, divorced, separated or single, the premium is charged only on the basis of one's own taxable income.
Therefore, a married couple where each spouse had taxable income of $40,000 a year pays the premium based on individual taxable income of $40,000 each, as opposed to a family premium based on their combined taxable income of $80,000.
This also means that the premium does not apply to family members who have little or no income (such as a stay at home spouse, children or other dependants).