Did you apply for Wage Subsidy?

By PKF Team Blog July 3, 2020

The Canada Emergency Wage Subsidy (CEWS) is available for Canadian businesses that are experiencing negative effects due to COVID-19. The program provides a subsidy of 75% of the remuneration paid for a period of twelve weeks from March 15, 2020, until June 6, 2020. However, in May it was extended for another twelve weeks till August 29, 2020.

Who is eligible for CEWS?

Employers include individuals, taxable corporations, partnerships consisting of eligible employers, certain Indigenous government-owned corporations, non-profit corporations, and registered charities, registered Canadian amateur athletic associations, private schools or colleges. Public institutions such as governments and municipalities, schools, hospitals, and public universities and colleges are not eligible for this benefit.

What is the eligible wage reduction?

In addition to being the eligible employer, the applicant must also meet the requirements of the wage reduction. It starts with an assessment of revenue reduction. You either compare

a. qualifying monthly March, April, or May revenue to the corresponding month in 2019; or

b. compare qualifying monthly revenue to an average revenue of January and February 2020.

! Important rule regarding revenue decline test is that an employer should use a consistent approach by applying the same approach for all periods. For example, if qualifying revenue for the first period was compared to the same month of 2019, for the next periods it again should be compared to the respective month of 2019, but not to the average January and February revenue 2020.

There are certain requirements that should be included in eligible remuneration and options for calculation of wage subsidy.

How to apply for CEWS?

The calculation form for CEWS is provided in Government web site (How to apply: Canada Emergency Wage Subsidy (CEWS) – Canada.ca)

As the payments are made electronically, the business must first ensure that its payroll account’s direct deposit information is current. A separate application must be submitted for each claim period.

CEWS vs the Temporary Wage Subsidy

CEWS is not the temporary wage subsidy (TWS). The TWS is a three-month program that allows for a reduced payroll deduction in the required remittance to the Canada Revenue Agency.

Some employers meet the requirements for both the CEWS and the TWS. In such a situation, the TWS benefit will reduce the amount available claimed under CEWS for the same time period.

PKF Antares is here to help

Canadian business owners have a lot to deal with during the pandemic on both professional and personal levels. If you need assistance in the calculation of wage subsidy, PKF Antares is here to help you. https://pkfantares.com/contact-us/