CANADIAN EMERGENCY WAGE SUBSIDY (CEWS) – 75% Wage subsidy update:
This is an update with more specifics on the Wage Subsidy program by the Canadian Federal Government. The plan is to assist businesses to keep employees on payroll by offering a 75% wage subsidy. This is a new program and does not replace the 10% wage subsidy outlined by the government. If you qualify for this new subsidy you cannot also apply the 10% wage subsidy and double dip. The 10% wage subsidy is still available for those businesses who do not qualify for the 75% CEWS.
Businesses (small and medium sized):
- All companies are eligible (including public companies and foreign owned)
- Proprietors and partnerships (must have a payroll account)
- Registered Charities
- Non-profit organizations
Gross Revenue requirement:
- There must be a 30% decline in gross revenue compared to the same period in the prior year.
- Gross revenue is defined as:
- Consistent accounting policies must be used
- Business in Canada
- Earned from arms length sources
- Does not include extraordinary revenue and sale of items which would be considered capital in nature.
- New businesses can compare January and February 2020 to the current period.
- Companies that are not operating due to Covid–19
- It appears that the 30% decline in revenue is calculated on a calendar month basis (ie. March 2020 compared with March 2019 and April, 2020 compared with April, 2019)
- It appears to be 30% and greater only, if you have a 29% decline then you do not qualify
- All businesses must apply through the My Business Account portal on the CRA website
- Link is: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html?utm_campaign=not-applicable&utm_medium=vanity-url&utm_source=canada-ca_my-cra-business-account
- Set up for direct deposit, as the funds will be directly deposited to your bank account
- Portal will be available in 3 to 6 weeks
- Applications are required each month for the subsidy
- Available for the period March 15, 2020 to June 15, 2020
Funds and when to expect payouts:
- Paid directly to the Employers bank account
- Will be 75% of salaries for all employees
- Includes owners
- Includes rehired staff members that were previously laid off
- Maximum benefit will be $847 per employee, per week
- Payment is to be expected to eligible businesses in 6 to 8 weeks
- Gross revenue – year over year calculation comparing the gross revenues
- Financial issues – keep notes and descriptions
- For each Employee
- Gross salary calculation
- Proof of payment
Due to the wording of the proposed legislation to calculate the CEWS, for wages paid between March 15 to April 11, 2020 the employer’s revenue for the whole month of March 2020 needs to be 30% less than March 2019.
Note that this could change slightly as this legislation is in draft.