Toronto Payroll Costs Before Q4 2025: WSIB's 2025 Rate Cut and the EHT Instalment Threshold

Late August is the last quiet window before Q4 payroll planning begins in earnest for most Toronto employers — bonus accruals, year-end headcount decisions, and holiday scheduling all start landing on the calendar by October. It's also a useful checkpoint for two payroll cost lines that don't get much attention outside their own filing seasons: Ontario's Workplace Safety and Insurance Board (WSIB) premium rate, which dropped for 2025, and the Employer Health Tax (EHT) monthly instalment requirement, which applies once a Toronto employer's Ontario payroll crosses a fixed threshold. Neither is a headline-grabbing change, but both affect the true cost of a Toronto payroll, and both are worth confirming now rather than at year-end reconciliation.

WSIB's 2025 rate: down, but check your own class

For 2025, WSIB lowered the average premium rate for Ontario businesses to $1.25 per $100 of insurable payroll — the lowest average rate in more than 50 years, and part of a run of annual reductions that has cut the average rate by more than 50 percent over the past decade. WSIB estimates the 2025 decrease saves Ontario businesses roughly $150 million compared with 2024 alone, and puts cumulative employer savings since 2017 at approximately $18.6 billion.

Source: WSIB — 2025 premium rates.

The average is a province-wide figure, not a promise about any one employer's bill. WSIB premiums are set by rate group (your business's classification), and an individual employer's premium can move differently from the average depending on claims history and industry class — a Toronto business in a higher-risk classification may see a smaller cut, or none, even in a year when the province-wide average falls.

The earnings ceiling moved too

The other 2025 change that affects the bill directly, independent of your rate class: WSIB's maximum insurable earnings ceiling rose to $117,000 for 2025, up from $112,500 in 2024. This ceiling caps how much of each worker's earnings are subject to WSIB premiums — so a higher ceiling means a larger share of payroll for higher-paid staff becomes premium-bearing, even in a year when the headline average rate is falling. For a Toronto employer with several employees earning close to or above the prior $112,500 ceiling, this can partly or fully offset the benefit of the lower average rate.

Source: WSIB — 2025 premium rates.

The Employer Health Tax instalment threshold most growing employers miss

The EHT works differently from WSIB and is easy to overlook until a business crosses a specific payroll size. Ontario requires eligible employers to file an annual EHT return and pay by March 15 of the following year — but employers whose total Ontario payroll (remuneration) is greater than $1,200,000 must additionally pay monthly instalments through the year rather than settling the full amount with the annual return.

Source: Ontario — Employer Health Tax (EHT).

This threshold catches growing Toronto businesses at an awkward moment: a company that crossed $1.2 million in Ontario payroll partway through the year, whether through hiring, wage growth, or an acquisition, may already owe monthly instalments it hasn't been remitting — and the gap compounds every month it goes unnoticed. Late August, with roughly a third of the calendar year's payroll already run, is a reasonable point to check year-to-date Ontario remuneration against the $1.2 million line before Q4 hiring pushes a borderline employer over it without anyone flagging the instalment obligation.

The EHT exemption, unchanged and easy to assume

Separately from the instalment threshold, Ontario's EHT exemption for eligible private-sector employers remains $1,000,000 of Ontario payroll (shared across an associated group of employers, where applicable), with no exemption available at all once combined Ontario payroll exceeds $5,000,000. The tax rate applied above the exemption scales with total payroll, topping out at 1.95% for payroll over $400,000 (before the exemption is applied).

Source: Ontario — Employer Health Tax (EHT).

A Toronto business assuming its exemption is unchanged from last year is usually right — but "usually" is the operative word for any employer close to the $1 million exemption line or the $5 million cutoff, where a good hiring year can change the answer without the business owner realizing it until the annual return is prepared next March.

What Toronto-area owners should do before Q4

• Check your year-to-date Ontario payroll against the $1.2 million EHT instalment threshold — if you've crossed it, or expect Q4 hiring to push you over it, confirm monthly instalments are being remitted, not just accrued for the annual return.
• Confirm your WSIB premium statement reflects the 2025 rate, and don't assume the province-wide average cut applies in full to your specific rate class.
• Recheck whether any high-earning staff crossed the new $117,000 insurable earnings ceiling — this affects the WSIB-premium-bearing portion of their pay, separate from your classification rate.
• Confirm your EHT exemption still applies at your current payroll level, particularly if hiring has pushed total Ontario payroll closer to $1 million or, for larger employers, closer to the $5 million cutoff where the exemption disappears entirely.
• Build the Q4 payroll budget around actual current-year figures, not last year's WSIB and EHT numbers carried forward unchanged.

The bigger picture

WSIB's 2025 rate cut and the EHT's fixed thresholds sit on opposite sides of the same planning problem: one is a rate that moved in the employer's favour on average, and the other is a threshold that doesn't move at all — meaning a growing Toronto business can quietly cross it. Neither requires urgent action in most cases, but both are the kind of detail that's cheap to check in August and expensive to discover during a March reconciliation.

Key takeaways

• WSIB's average 2025 premium rate fell to $1.25 per $100 of insurable payroll, the lowest average in more than 50 years — but individual rate movement depends on your classification.
• The WSIB maximum insurable earnings ceiling rose to $117,000 for 2025, up from $112,500, widening the premium-bearing share of higher earners' pay.
• Ontario employers with Ontario payroll over $1,200,000 must pay EHT monthly instalments, not just an annual return — a threshold growing employers can cross mid-year without noticing.
• The EHT $1,000,000 exemption still applies for eligible employers below that payroll level, disappearing entirely above $5,000,000.
• Late August, with most of the year's payroll data already in hand, is the practical checkpoint to confirm both figures before Q4 hiring changes the answer.

If your Toronto payroll is approaching either the EHT instalment threshold or the WSIB earnings ceiling, RN Canada works with Ontario employers remotely from our Edmonton and Vancouver offices to build a Q4 payroll budget around this year's actual numbers. See our Ontario Employer Health Tax guide, our bookkeeping and payroll services, or run your numbers through the employer payroll cost calculator.