Applications for CEWS (Canada’s Emergency Wage Subsidy(75%)) open on Monday 27th April.
If you are an 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 to a maximum of $847 a week per employee.
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.
Who Can apply for CEWS?
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
What is an eligible reduction in revenue?
First of all you need to determine if your reduced revenue makes you eligible to apply for the wage subsidy in a particular period.
To calculate your reduction, begin by comparing your eligible revenue for the starting month of the claim period with your baseline revenue.
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.
If you determine that you qualify for the CEWS for one claim period, you will automatically qualify for the following claim period.
| Period dates | Baseline revenue | Eligibility period revenue | Required reduction |
|---|---|---|---|
| March 15, 2020 to April 11, 2020 |
|
March 2020 | 15% |
| April 12, 2020 to May 9, 2020 |
|
April 2020 | 30% |
| May 10, 2020 to June 6, 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.
Eligible remuneration
Eligible remuneration is Baseline Remuneration and that is considered to be the average weekly eligible remuneration paid to an employee during the period of January 1, 2020, to March 15, 2020. However, you may exclude from your calculation any period of seven or more consecutive days for which the employee was not paid.
Online Calculator
In order to prepare you for the application CRA have come up with a calculator so you can see if you are eligible to apply before going through the application process. Click here
There is a spreadsheet which can be downloaded to help you with the calculations and a link is provided for this , you can access the page by clicking on Click here.
The calculator will determine the subsidy you can expect for your organization and also will help you to determine some specific line amounts (lines A – G) that you will need to enter into the CEWS application.
Information you will need:
- Claim period
- Gross payroll for eligible employees
- Calculate specific values using the spreadsheet
- Premiums & contributions
- Deductions
By inputting all of this information the calculator will determine the subsidy you can expect for your organization and will also provide you with some specific line amounts (lines A – G) that you will need to enter into the CEWS application.
How to apply
- Most businesses will apply using My Business Account If you haven’t set up your account yet you may want to read our how to blog
- If you haven’t set up your My Business Account,you can apply using a separate online application form or contact your friendly accountant how can access your Business Account for you.
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.
- Make sure your business details and direct deposit information for your payroll accounts (RP) are up to date. This will ensure that any payments to you will be processed quickly and easily.
Incorrect or fraudulent claims
- If you do not meet the Canada Emergency Wage Subsidy eligibility requirements for a period, you will be required to repay any amounts you received for that period.
- Penalties may apply in cases of fraudulent claims including fines or even imprisonment.
- If you artificially reduce your revenue for the purpose of claiming the wage subsidy you will be required to repay any subsidy amounts you received plus a penalty equal to 25% of the total value.
Keep your records
You must keep records demonstrating your reduction in revenues and remuneration paid to employees.
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a post such as this, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.