Temporary Wage Subsidy

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

The Canadian Federal government has announced a temporary wage subsidy to help employers keep payroll alive the COVID-19 crisis.  Please note that there are 2 subsidies – the Temporary Wage Subsidy (10% – documented below) and the Emergency Wage Subsidy (75% – documented in this post).

Here’s the outline from the video:

  • Eligibility Criteria
    • All employers with payroll accounts created before 18 March 2020
  • Benefits
    • 10% of remuneration paid March 18 to June 15
    • Max of $1375 per employee, max of $25000 per employer (18 employees)
  • Application
    • Claim it by reducing your payroll tax remittances
  • Other Conditions
    • Can’t deduct more than the amount paid to CRA for Income Taxes Withheld
    • This will impact Quebec employers and those that employ part timers on low income
    • Amounts you can’t deduct now (or have missed) can be deducted from future periods or refunded at the end of the year
    • Presume that there will be a process when filing T4s to justify this amount
  • Issues
    • Payroll date is the date payment is made to staff
    • If you claim the 10% subsidy it will reduce what you can claim for CEWS
    • GOOD NEWS: you can claim this if you’re not eligible for 75% CEWS
  • Recommendations
    • If you are claiming CEWS just claim the full 75% amount and skip the 10%

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