The Canada Emergency Wage Subsidy (CEWS) supports employers that are hardest hit by the pandemic, and protect the jobs Canadians depend on.

The subsidy generally covers 75% of an employee’s wages – up to $847 per week – for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May.

The program will be in place for a 12-week period, from March 15 to June 6, 2020.

Employers who are eligible for the CEWS are entitled to receive a 100% refund for certain employer contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan paid in respect of employees who are on leave with pay.

For employers that are eligible for both the CEWS and the 10% Temporary Wage Subsidy for a period, any benefit from the Temporary 10% Wage Subsidy for remuneration paid in a specific period will generally reduce the amount available to be claimed under the CEWS in that same period.

Applications for the CEWS will be open on April 27

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.

This wage subsidy will enable you to re-hire workers previously laid off as a result of COVID-19, help prevent further job losses, and better position you to resume normal operations following the crisis.

1. Who is an eligible employer

To be eligible to receive the wage subsidy, you must:

  • be an eligible employer
  • have experienced an eligible reduction in revenue, and
  • have had a CRA payroll account on March 15, 2020

Types of eligible employers

Eligible employers include:

  • individuals (including trusts)
  • taxable corporations
  • persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:
    • non-profit organizations
    • agricultural organizations
    • boards of trade
    • chambers of commerce
    • non-profit corporations for scientific research and experimental development
    • labour organizations or societies
    • benevolent or fraternal benefit societies or orders
  • registered charities
  • partnerships consisting of eligible employers

Public institutions are not eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals.

What is an eligible revenue reduction

You must determine if your reduced revenue makes you eligible to apply for the wage subsidy in a particular period.
If you determine that you qualify for the CEWS for one claim period, you will automatically qualify for the following claim period.
Calculate your reduction by comparing your eligible revenue for the starting month of the claim period with your baseline revenue. Your baseline revenue is either:

  • the revenue you earned in the corresponding month in 2019, or
  • the average of the revenue you earned in January and February, 2020

You must choose one of these baseline revenue options for your method of comparison and will not be able to change it for your subsequent calculations for the other 2 periods.

Period dates Baseline revenue Eligibility period revenue Required reduction
March 15, 2020 to April 11, 2020
  • March 2019, or
  • Average of January and February 2020
March 2020 15%
April 12, 2020 to May 9, 2020
  • April 2019, or
  • Average of January and February 2020
April 2020 30%
May 10, 2020 to June 6, 2020
  • May 2019, or
  • Average of January and February 2020
May 2020 30%

Eligible revenue

Eligible revenue generally includes revenue earned in Canada from:

  • selling goods
  • rendering services, and
  • others’ use of your resources

Use your normal accounting method when calculating revenue. You can use the cash method or the accrual method, but you must use the same approach throughout.

2. Determine your eligible employees

When applying for CEWS or calculating the amount of wage subsidy to expect, you will need to understand which of your employees are eligible to be included in the calculation. You will also need to know the amount of their pay (eligible remuneration).

Who are eligible employees

An eligible employee is an individual employed in Canada by you (the eligible employer) during the claim period, except if there was a period of 14 or more consecutive days in that period where they did not receive any pay (eligible remuneration) from you.

Employee eligibility is based on whether the person is employed in Canada, not where they live.

Retroactively hiring and paying employees

Employees who have been laid off or furloughed can become eligible retroactively, as long as you rehire them and their retroactive pay and status meet the eligibility criteria for the claim period. You must rehire and pay such employees before you include them in your calculation for the subsidy.

Eligible employees and the Canada Emergency Response Benefit (CERB)

Rehired individuals may have received, or continue to receive, the Canada Emergency Response Benefit (CERB). Depending on the specific situation, these individuals may be required to repay some or all of the amounts they received. More information to come on this shortly. CERB recipients who already know they will need to repay their CERB payment can access the steps needed to return or repay the benefit.

What is eligible remuneration

Eligible remuneration includes amounts you paid an employee as salary, wages and other taxable benefits, fees, and commissions. These are amounts employers would be required to make payroll deductions on to be remitted to the CRA.
Severance pay and items such as stock option benefits or the personal use of a corporate vehicle are not part of eligible remuneration.

3. Calculate your subsidy amount

When you apply for the Canada Employment Wage Subsidy (CEWS), you will be asked to enter amounts such as the number of eligible employees and gross payroll. You can determine these amounts and preview your subsidy claim, based on information you enter. The calculator is a tool to help you estimate the amount of your wage subsidy.
Before you calculate your subsidy, make sure you are eligible to apply.
After you apply for the wage subsidy, your claim will be subject to verification.

How the subsidy is calculated

The CEWS amount is based on:

  • the number and type of eligible employees you have, and
  • the amount and type of pay they received before and during the crisis

There is no limit on the total subsidy amount that an eligible employer may claim.

Input your information

You can use the calculator below to determine the subsidy you can expect for your organization. This calculator will help you to determine some specific line amounts (lines A – G) that you will need to enter into the CEWS application form.

Note: You must do a separate calculation and application for each payroll program (RP) account you have with the CRA.

How to use the calculator

  1. Calculate the basic CEWS using the provided spreadsheet
  2. Input the amounts from the spreadsheet on this page as indicated
  3. Enter the refund of employer contributions for any employees on leave with pay
  4. Enter any amounts for employees receiving a Work-Sharing benefit through Employment Insurance
  5. Enter the amount you are eligible for under the 10% Temporary Wage Subsidy for Employers program  for this claim period
  6. Print and save the information to enter in your future CEWS application

Note: You may be required to provide a full list of your employees and their Social Insurance Numbers (SIN) for verification after you apply. The CRA is not collecting or retaining any of the information you enter on this page or in the spreadsheet. These amounts are only used to help you determine the amount of CEWS you may be eligible to claim.

 

Applications for the CEWS will be open on April 27

Need Help with this program, call us at (416) 932-1915 or email us at [email protected] NOW!
 

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