Temporary Small Business Wage Subsidy [ENDED]
Potential Benefit: 10% of calculated gross payroll
Period Covered: 16 weeks (March 15, 2020 to June 6, 2020)
Taxation of Benefit: The business entity will receive a T4A from the government and the amounts will be Taxable
Eligibility: The eligibility for this program includes the following types of entities:
- Nonprofit organization;
- Registered Charity
You must have been registered with Canada Revenue Agency, with an assigned payroll number, as of March 18, 2020.
You must have paid salary, wages, bonuses and any other remunerations to an eligible employee
In order to be eligible for this loan you have to be A small business entity; Not for Profit entity.
With respect to the repayment of this loan will be interest free until December 31, 2022.
If the borrower repays three quarters of the total loan prior to December 31, 2022, then One quarter of the initial loan will be forgiven.
The benefit is calculated at 10% of the eligible remuneration paid from March 18, 2020 to June 19, 2020.
Eligible remuneration is determined by totaling the eligible remuneration paid to all of your employees.
The eligible remuneration paid to an employee is the lessor of the actual remuneration or $1,375.00.
The maximum claim is $ 25,000.00 per eligible entity.
When to Apply: you will calculate the benefit and apply it against your source deduction payments
Records to Keep: Details on gross wages paid during the monthly period (copy of payroll journal) A calculation of the benefit
What You Receive: A credit against your source deduction payment
April 27 Update:
CRA has published an application guide for the Canada Emergency Wage Subsidy (CEWS) program.
April 15 Update:
Changes to the eligibility rules:
Allow people to earn up to $1,000 per month while collecting the CERB.
Extend CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake seasonal work as a result of the COVID-19.
Extend CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19.
April 8 Update:
The criteria for the revenue decline is now 15% (it originally was 30%) for only the month of March, the bases for determining the revenue can be done either under a cash or an accrual bases for both periods-the same method has to be used for both periods.
This subsidy-Grant– would be available to eligible employers that see a drop of at least 30% of their revenue and that pay wages to employees. This grant as of now does not apply to dividends paid by corporations.
Drop in revenue is carried out by comparing the current month’s revenue with the corresponding month in the prior year and then calculating the difference and then the percentage change.
Eligible employers would include the following:
partnerships consisting of eligible employers;
Revenue is from its business carried on in Canada, does not include foreign income;
Revenue would exclude items earned from extraordinary items;
Revenue would exclude amounts considered to be on account of capital;
Generally Revenue would exclude amounts earned from arm’s-length (ie: unrelated)
Sources, however a special rule will apply to employees that do not deal at arm’s length (related) with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration
Revenue would be calculated using the employer’s normal accounting method
Eligible Wages would be calculated as the gross calculated amount of wages paid to all employees calculated as the lessor of:
75% of the employee’s average wage before March 15, 2020;
The actual amount paid to the employee during the relevant application period;
$847 per week.