Salary Continuance, Termination Pay, Severance Pay and Retiring Allowances
An amount received by an employee upon termination of employment can be either employment income or a retiring allowance under the federal Income Tax Act. If the amount is considered employment income (i.e., salary continuance and termination pay), then it is subject to Employer Health Tax (EHT).
The Information Bulletin helps explain whether an amount received by an employee upon termination is subject to EHT.
To learn more about this topic please read our Information Bulletin entitled: Salary Continuance, Termination Pay, Severance Pay and Retiring Allowances.