The federal government is providing businesses with a wage subsidy toward employee wages if they are able to show a drop in revenue due to COVID-19. Businesses will be eligible to receive the subsidy for the wages they have paid their employees from March 15th 2020 to June 2021.
Most recent update: On October 9, 2020, the government announces the rate of the subsidy will remain at a maximum of 0.8 times the revenue reduction amount, which is 65%, until December 19, 2020. The top-up subsidy calculation will now be based on the current month's revenue reduction rather than the average of the three previous months.
The program will run until June 2021.
CEWS Program Overview
The CEWS provides a subsidy to “enable employers to re-hire workers previously laid off, and to keep those who are already on payroll.” The subsidy is a percentage of “eligible remuneration” paid by “eligible employers” who have had a decrease in revenue during the program periods.
Eligible remuneration (Pay)
The amount of the CEWS subsidy is based on a percentage of "eligible remuneration,” which may include salary, wages, and other remuneration. It does not include items such as severance pay, employee stock option benefits or the personal use of the employer’s vehicle.
Eligible employers include individuals, certain partnerships, taxable corporations, taxable trusts, non‑profit organizations, and registered charities. Public bodies, such as municipalities and local governments, Crown corporations, public universities, colleges, schools and hospitals, do not generally qualify.
Employers must have a revenue drop in order to qualify. When determining if there has been the required decrease in revenues, revenue includes amounts from a business carried on in Canada that is earned from arm’s-length sources; however, extraordinary items and amounts on account of capital, such as the proceeds from the sale of capital assets, are excluded. When first applying for the CEWS, employers must choose either the cash or accrual method to calculate revenues and cannot combine the methods or change methods later. Special rules address complex issues for corporate groups, consolidated entities, non-arm’s length entities and joint ventures. Non-profits and charities can choose whether to include or exclude government funding in their revenues for the revenue reduction test.
how can i apply?
How can I apply for the wage subsidy CEWS?
As of April 27 businesses are able to apply for the CEWS Periods 1-4. As of August 17th, Period 5 will be available for applications.
Applications can be submitted in 3 different ways. Please be mindful to only apply through one method.
Represent a Client
A separate online application form
When registering for CEWS through My Business Account you can request a new CRA security code be e-mailed to you through the Personal Tax Line 1-800-959-8281. You can only request this once the mailout request has been made through the registration of the My Business Account (online or over the phone at 1-800-595-8281) When registering for CEWS through the Web forms online application (similar process to filing T4s) you can request the web access code online. If you are an authorizing authority on the payroll account, you can request the web access code over the Business Tax Line 1-800-959-5525. They will tell you the 4 digits and 2 letters verbally on the call.
Need help calculating your wage subsidy you are entitled to?
please book a free Consultation with OpenGate. We are actively monitoring all updates and will be glad to help you with acquiring the wage subsidy for your business.