The Canada Emergency Wage Subsidy is a subsidy available for a period of twelve weeks that will provide a subsidy of 75% of eligible remuneration, paid by an eligible entity (eligible employer) that qualifies, to each eligible employee.
Did you see a drop of at least 15% of your qualifying revenue in March 2020* and 30% for April and May (compared to 2019)?
*Claim periods may vary.
Are you an eligible employer?
- a corporation (other than a public institution) that is not exempt from tax under Part I of the Income Tax Act (the Act);
- an individual (including a trust);
- a registered charity (other than a public institution);
- a person that is exempt from tax under Part I of the Act (other than a public institution), that is:
- an agricultural organization;
- a board of trade or a chamber of commerce;
- a non-profit corporation for scientific research and experimental development;
- a labour organization or society;
- a benevolent or fraternal benefit society or order; and
- a non-profit organization;
- a partnership, each member of which is a person or partnership described in this list;
- a prescribed organization, including certain Indigenous businesses
To qualify for the wage subsidy an eligible employer must;
- Have had an open payroll program account with the CRA on March 15, 2020
- Have experienced the required reduction in revenue for one or more claim period
- Make a wage subsidy application for the claim period before October 2020
- Have the person responsible for their financial activities attest to complete and accurate information on the application mentioned above
Qualifying revenue: The inflow of cash, receivables, or other consideration arising in the course of its ordinary activities in Canada in a particular period. These inflows are generally from the sale of goods, the rendering of services, and the use—by others—of the eligible employer’s resources.
Registered charities and non-profit organizations may elect to exclude funding received from government sources. This election applies to both prior and current reference periods.
An eligible employee, in respect of a week in a claim period, means an individual employed in Canada by the eligible employer in the claim period, as long as the employee has not been without remuneration from the eligible employer in respect of a period of 14 or more consecutive days in the claim period.
It is possible for an eligible employer to hire back eligible employees and pay them retroactively in respect of a claim period, to be able to qualify for the wage subsidy. If such an employee received a Canada Emergency Response Benefit payment from the CRA for a claim period they may be required to repay the CERB.
Individuals are required to repay the CERB if they no longer meet the eligibility requirements for the four-week period in question.
“For example, consider a laid off employee who has applied for the CERB for the four-week period of April 12 – May 9. At the time of application, the laid off employee expected to have little or no work or income for the four-week period of April 12 – May 9. However, the laid off employee finds out immediately afterwards that their employer will rehire them and will give back-pay for that same four-week period. In this situation, the rehired employee will be asked to repay the CERB for that four-week period of April 12 – May 9.”
The wage subsidy is considered taxable income.
Claiming the Wage Subsidy
Eligible employers will be able to apply for the wage subsidy through the CRA’s My Business Account portal or the Web Forms application.
Representatives (authorized at a level 2 or 3) will be able to apply for the wage subsidy on behalf of their clients through the Represent a Client service, as well as through the Web Forms application.
To log in to or register for the CRA’s online services, go to canada.ca/taxes-business-online.
To use the Web Forms application, or if you have misplaced or do not have a web access code, go to canada.ca/taxes-iref.
When completing the application, you will need:
- your payroll program account number (123456789RP0001, for example);
- to know which claim period you are applying for;
- all of the information necessary to complete the applicable fields in the application
The processing of the wage subsidy will be performed at the payroll program account level, so you will have to file a separate application for each payroll program account.
The CRA has created a web page to help determine the amounts necessary for applying. For more information, go to Calculate your subsidy amount.
While delays may occur if additional review is required or the CRA needs to contact you, you can generally expect to receive your payment within 10 business days if you are registered for direct deposit on your payroll account.
If you are not registered for direct deposit, please allow additional time for your cheque to be delivered by mail to the address on your payroll account.
The above information is for informational purposes only. For more information on CEWS Contact MPW or go to https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-frequently-asked-questions.html