Employer Benefits of Apprenticeship
- Participating in an apprenticeship program ensures you will have an employee who is not only trained to provincial industry standards but also understands your unique workplace conditions.
- Apprenticeship training allows you to benefit from the government-supported in-class training portion of the program, while supporting your future workforce needs and those of your industry.
- An apprenticeship program allows you to have within your company a pool of experienced employees of different ages so that you will be better able to plan to meet future workforce needs due to expansion plans or the retirement of older trades persons.
- Recruiting potential apprentices through the Ontario Youth Apprenticeship
- Program can also be a cost-effective solution to training and retaining young workers.
- A recent survey of apprentices found that participants developed a loyalty to the company that hired them, which leads to a more stable workforce.
In the 2015 Ontario Budget, the government announced several changes to the Apprenticeship Training Tax Credit. The proposed changes were enacted through Bill 91, Building Ontario Up Act (Budget Measures), 2015 which received Royal Assent on June 4, 2015. Learn more about the Ontario Budget [PDF] .
The apprenticeship training tax credit is a refundable tax credit. It is available to employers who hire and train apprentices in certain skilled trades during the first 36 months of an apprenticeship program that commenced on or after April 24, 2015.
For apprenticeship programs that commenced before April 24, 2015, for eligible expenditures incurred after March 26, 2009, the first 48 months of the apprenticeship program qualify for purposes of the tax credit.
The tax credit is based on salaries and wages paid to an apprentice. Qualifying businesses can claim 25 per cent of eligible expenditures (30 per cent for small businesses) made during the first 36 months of an apprenticeship program that commenced on or after April 24, 2015. The maximum credit for each apprenticeship is $5,000 per year. The maximum credit over the first 36‑month period of the apprenticeship is $15,000.
The tax credit is available to businesses that:
- have permanent establishments in Ontario
- pay Ontario income tax
- incur eligible expenses in training apprentices in certain skilled trades.
There are over 150 skilled trades in Ontario in four sectors: construction, industrial/manufacturing, motive power and service. Over 120 of these trades are currently eligible for the tax credit.
Corporations may claim the tax credit on Schedule 552 and file it with their T2 corporation income tax return.
Employers operating unincorporated businesses may claim the tax credit on form ON479, Ontario Credits, included in their personal income tax return.
Members of partnerships claim their share of the tax credit on their own corporate or personal tax returns. Limited partners cannot claim the tax credit. But, general partners of a limited partnership can claim their share of the tax credit.
When an apprentice is registered for two separate trades simultaneously, can the business claim the credit for both trades?
What do I do if I forgot to claim the tax credit?
Note: It is important to file your return as a completed package. Incomplete returns generate delays in processing.
Download Schedule 552, Ontario Apprenticeship Training Tax Credit (2015 and later tax years) from the Canada Revenue Agency
Download form ON479, Ontario Credits from the Canada Revenue Agency
Get your General Income Tax and Benefit package from the Canada Revenue Agency
Get the Corporation Income Tax return, also known as the T2, from the Canada Revenue Agency
Save your company’s payroll records and the training agreement or contract of apprenticeship. You do not need to submit them with your tax return. But you will need to keep them should you be asked to provide documentation to support your tax credit claim.
If you are unable to provide supporting documentation when requested, your claim may be rejected.
The employer and apprentice must be participating in an apprenticeship program in which the training agreement or contract of apprenticeship has been registered under the Ontario College of Trades and Apprenticeship Act, 2009 or a predecessor of that Act (i.e. Apprenticeship and Certification Act, 1998 or Trades Qualification and Apprenticeship Act) for each eligible apprenticeship.
If an apprentice changes employers, the new employer and apprentice need to sign a new training agreement. Before signing this document, it is important that the employer request and obtain a copy of the original training agreement or contract of apprenticeship.
These documents are used to substantiate claims and to verify the eligible apprenticeship period.
If you have lost or misplaced the training agreement or contract of apprenticeship, please request a copy from the apprentice or the Ministry of Training, Colleges and Universities at 1 800 387-5656. If you are not a party to the original training agreement or contract, you will need the apprentice to obtain this document on your behalf. Or, you may ask the apprentice to provide you with written permission to make this request. There are no substitutes for either document.
What do I do if I am hiring an apprentice who was previously registered with another company or who is employed through a union or employment agency?
Three government bodies administer the tax credit.
The Canada Revenue Agency (CRA) administers the tax credit on behalf of Ontario through the federal income tax system. The CRA provides administrative support related to filing claims such as forms distribution, verification and audit functions, and interpretations and rulings.
The Ontario Ministry of Training, Colleges and Universities promotes the apprenticeship program to employers and the general public, and is responsible for registering eligible apprentices. For more information on hiring apprentices, call Employment Ontario at 1 800 387‑5656 (1 866 533‑6339 for teletypewriter).
The Ontario Ministry of Finance evaluates service delivery and performance related to the administration of this credit, issues general information, sets overall policy and is responsible for the tax credit’s legislation.
Read about Apprenticeship Training Tax Credit – General Guidelines [PDF]
Hiring an apprentice for your workplace
Canada Revenue Agency – Ontario apprenticeship training tax credit
Apprenticeship Completion Employer Bonus
Here’s information that can encourage an employer to hire you as an apprentice. Employers are eligible to receive a $1000 Apprenticeship Completion Employer Bonus for each apprentice they hire, train and completes his or her apprenticeship training – receiving a Certificate of Apprenticeship and where, applicable, a Certificate of Qualification. This is a taxable cash grant.
Your employer can receive the grant if it:
- Employs apprentices who complete their training in any of Ontario’s approved trades.
- Is a corporation or unincorporated businesses and subject to Ontario corporate income tax or Ontario personal income tax.
Sponsor Groups are not eligible for the Apprenticeship Completion Employer Bonus. These groups are not individual employers. Employers that belong to these groups can receive the bonus if they are the employer who last employed the apprentice.
Your employer will co-sign your training or sponsorship agreement. The Ministry of Training, Colleges and Universities uses this information to determine which employer is eligible to receive a bonus once an apprentice completes his or her training and receives a Certificate of Apprenticeship, or, where required, completes their Certificate of Qualification exam.
Contact the toll-free Employment Ontario Hotline at 1-800-387-5656, TTY (telephone service for the deaf) 1-866-533-6339 for the phone number and location of the apprenticeship office in your area. Newcomers to Ontario can ask for this information in the language of their choice.