Temporary Wage Subsidy
IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.
The Canadian Federal government has announced a temporary wage subsidy to help employers keep payroll alive the COVID-19 crisis. Please note that there are 2 subsidies – the Temporary Wage Subsidy (10% – documented below) and the Emergency Wage Subsidy (75% – documented in this post).
Here’s the outline from the video:
- Eligibility Criteria
- All employers with payroll accounts created before 18 March 2020
- Benefits
- 10% of remuneration paid March 18 to June 15
- Max of $1375 per employee, max of $25000 per employer (18 employees)
- Application
- Claim it by reducing your payroll tax remittances
- Other Conditions
- Can’t deduct more than the amount paid to CRA for Income Taxes Withheld
- This will impact Quebec employers and those that employ part timers on low income
- Amounts you can’t deduct now (or have missed) can be deducted from future periods or refunded at the end of the year
- Presume that there will be a process when filing T4s to justify this amount
- Issues
- Payroll date is the date payment is made to staff
- If you claim the 10% subsidy it will reduce what you can claim for CEWS
- GOOD NEWS: you can claim this if you’re not eligible for 75% CEWS
- Recommendations
- If you are claiming CEWS just claim the full 75% amount and skip the 10%