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Temp Wage Subsidy for employers (10%) Posted on Apr 03, 2020

Updated April 4th - 10% wage subsidy - This program is still in effect. However, if the business also qualifies for the 75%, the money received from CEWS (seperate topic in the blog), will be adjusted downwards for payments made through this program. For this program, no need to show drop in sales.

If you are paying employees or even taking salary for yourself, from your own corporation, you can reduce your remittances. In a nutshell:

  1. It is a three-month measure
  2. Eligible employer : individual, partnership, CCPC, NPO or charity and have a payroll program account on March 18, 2020.
  3. How much -
    The subsidy is equal to 10% of the gross remuneration you pay between March 18, 2020, and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer. Associated CCPCs will not be required to share the maximum subsidy of $25,000 per employer.
  4. Calculate the subsidy manually. Subsidy reduces only the tax, not the CPP or EI. For example, if you calculated a subsidy of $2,050, you would reduce your current remittance of federal, provincial, or territorial income tax by $2,050. You could continue reducing future income tax remittances, up to the maximum of $25,000, for all remuneration paid before June 20, 2020.
  5. You can start reducing remittances of federal, provincial, or territorial income tax in the first remittance period that includes remuneration paid between March 18, 2020, and June 20, 2020.
  6. Subsidy doesn’t affect what you pay employees
  7. If you are an eligible employer, but choose not to reduce your payroll remittances during the year, calculate the temporary wage subsidy on remuneration paid between March 18, 2020, and June 20, 2020. You can then ask for the subsidy to be paid to you at the end of the year, or transferred to the next year’s remittance.
  8. Subsidy is a taxable income
  9. Currenty there are no restrictions on employees dealing at non arm's lenght with their companies. However the govednrment may introduce those, similarly to those intriduced on the 75% subsidy. If you hold off on taking the subsidy now, you can ask the subsidy to be paid to you at the end of the year or transferred to next year's remittance.

Official info is here: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html