What the Canadian government said
According to the report, Bengaluru-based Infosys received an order from the Canadian Department of Finance last week, stating that the company was fined CAD 1,34,822.38.
“A penalty was imposed for alleged underpayment of employee health tax for the year ended December 31, 2020,” the company said in its official filing.
What Infosys said about the punishment
In response to the Canadian fine, Infosys stated that the fine would not have a material impact on the company’s finances, operations or other activities.
Infosys has a strong presence in Canada, with several offices across the country, including Alberta, Mississauga in Ontario, Burnaby in British Columbia, and another in Ontario (Ottawa).
What is Canada’s Employee Health Tax (EHT)
The Employee Health Tax (EHT) is a mandatory payroll tax imposed on employers in select Canadian provinces such as Ontario and British Columbia. This tax is calculated based on various forms of employee compensation, including salaries, bonuses, taxable benefits and stock options. Its primary objective is to help fund healthcare in the province.
In Ontario, for example, EHT must be paid by employers on the compensation of employees who:
- Physically work at the employer’s Ontario facility.
- Are associated with the employer’s establishment in Ontario.
- You must not physically work at an employer’s place of business, but receive your payment from or through an Ontario place of business.
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