With all of the changes that have come our way as a result of measures put in place to reduce the spread of COVID, many businesses are facing reduced revenues. To help support businesses during this time, prevent additional job loss and encourage the hiring of previously laid-off individuals and new employees, the Canadian Federal Government has introduced as a wage subsidy program.
This program will provide businesses with a wage subsidy of up to 75% for up to 12 weeks, starting March 15, 2020.
To be eligible for this wage subsidy employers must be an individual, taxable corporation, or a partnership consisting of eligible employers, non-profit organizations and registered charities who sees their revenue decline by 15% in March and 30% in the months following.
To calculate revenues for the purpose of this subsidy, you will use your normal accounting method (either accrual OR cash methods) and include revenues earned from arm’s length transactions. Any extraordinary amounts on account of capital should be excluded.
For non-profit organizations and charities, you will have the option to include revenue from government sources.
Note: Public bodies, such as municipalities and public schools and hospitals, will not be eligible for the subsidy.
The amount of the subsidy, as mentioned above, will provide assistance for up to 75% of wages between March 15 and June 6 and will be the greater of:
- 75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
- the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee's pre-crisis weekly remuneration (based on the average weekly remuneration paid between January 1 and March 15, excluding any seven-day periods in which the employee did not receive remuneration), whichever is less.
Eligible wages, for the purpose of this subsidy, includes amounts that the employer is required to deduct amounts for income tax obligations, such as salaries, wages and taxable benefits but does not include severance pay, personal use amounts or stock options.
For the most up to date information of the Canada Emergency Wage Subsidy Program visit the CRA Website or call us today.
