Canada Emergency Wage Subsidy (CEWS)

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Canada Emergency Wage Subsidy (CEWS)

Apr 13, 2021 by System

The federal government recently introduced a wage subsidy to help businesses keep their staff working during the COVID-19 pandemic. What is it, and how does it work? Let’s find out.

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What is the Canada Emergency Wage Subsidy?

The federal government is offering a wage subsidy of 75% to qualifying businesses for up to three months, retroactive to March 15, 2020. The subsidy received will be 75% of the first $58,700 normally earned by an employee, representing a benefit of up to $847 per week. The program will be in place for a 12-week period from March 15 to June 6, 2020.

Who is eligible?

The subsidy is available to all employers regardless of size (by income or number of employees) who suffer a drop in gross revenues of at least 30% in March, April or May of 2020 when compared to the same months in 2019.

The employer can be an individual, a taxable corporation, a partnership consisting of eligible employers, a non‑profit organization or a registered charity.

Employers cannot claim this emergency subsidy for employees who are collecting the Canada Emergency Response Benefit (CERB).

Employers who are currently receiving the temporary 10% wage subsidy are eligible for this new emergency subsidy but will receive a reduced amount.

To maintain their eligibility, employers must do everything in their power to ensure payment of the remaining 25% of earnings.

How to apply?

Eligible employers can apply through the CRA’s My Business Account portal. They have to keep detailed records to prove a reduction in their revenues.

For more information on the CEWS, please see the link below:

https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

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UFile's tax expert Gerry Vittoratos
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Gerry Vittoratos
CPA Tax & Accounting