The Canadian Government has created the Canada Emergency Wage Subsidy (CEWS) in response to the financial impact COVID-19 is having. This subsidy program was initially known as the Temporary Wage Subsidy, although as the situation evolved, so did the subsidy.
Quick Explanation of CEWS
Straight from the Government of Canada website -- As a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020. Source: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html
Q: I have a business in Canada and employ staff, am I eligible?
This subsidy is available to eligible employers who have experienced a decline in revenue of 30% or more over March, April, and May of 2020, compared with your revenue in 2019. This comparison will be the measure of business revenue loss related to the pandemic.
You may be required to show proof of this loss if requested by the CRA. As stated on their website, ‘You must keep records demonstrating your reduction in revenues and remuneration paid to employees.’
Q: What is an Eligible Employer?
This program is open to a wide range of business, such as:
- Individuals (including trusts)
- Taxable corporations
- Persons that are exempt from corporate tax (Note there are exceptions)
- Partnerships consisting of eligible employers
- Registered charities
Do note that public institutions are not eligible for the subsidy. For more information, please visit: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-who-eligible-employer.html
Q: As an employer, how much can I receive through the subsidy?
As an employer, you will receive 75% of an employee’s gross wages during the eligible period, to a maximum subsidy of $847 per week, as stated on the CRA website.
The maximum subsidy is $847 per week. For employees earning $1,129.33 (or more) for each week in the claim period, the maximum weekly subsidy is ($1,129.33 x 75% = $847).
This equates to a maximum subsidy of $10,164 per employee over the 12-week eligible period.
Q: How do I apply for the Canada Emergency Wage Subsidy?
As of April 27, 2020, you can apply for the CEWS on the CRA My Business Account web portal. The CEWS will be processed at the payroll program (RP) account level, so you will have to file a separate application for each RP account. Do make sure you have calculated your estimated subsidy before accessing the web portal.
Q: How can I record this information?
In most cases, you can record this information in your ERP and payroll software. To learn more about how to set this up or how to ensure you are keeping records, you can reach out to BAASS to help you through this.
For more information, please visit the CEWS FAQ website created by the CRA. You can also connect with a member of our BAASS team to learn more about having your accounting environment setup for success.