Temporary Wage Subsidy

Organizations that do not qualify for the Canada Emergency Wage Subsidy may qualify for the previously announced wage subsidy of 10 percent of remuneration paid from March 18 to June 19, 2020. You do not have to apply for this 10 percent Wage Subsidy.

  • Individuals (excluding trusts)
  • Partnership if the members consist exclusively of individuals, registered charities, or Canadian-Controlled private corporations (CCPCs) eligible for the small business deduction
  • Non-Profit organization
  • Registered Charity or
  • CCPC eligible for the small business deduction
  • Have an existing business number and payroll account with the CRA on March 18th, 2020 and
  • Pay salary wages, bonuses or other remuneration to an eligible employee ie. an employee who is an individual who is employed in Canada.

In order to maintain the integrity of the program, the employer would be required to repay amounts paid under the Canada Emergency Wage Subsidy if they do not meet the eligibility requirements and pay their employees accordingly. Penalties may apply in cases of fraudulent claims. The government is considering proposing to create new offences that will apply to individuals, employers or business administrators who provide false or misleading information to obtain access to this benefit or who misuse any funds obtained under the program. The penalties may include fines or even imprisonment

  • The usual treatment of tax credits and other benefits provided by the government would apply. As a consequence, the wage subsidy received by an employer would be considered government assistance and be included in the employer’s taxable income.
  • Assistance received under either wage subsidy would reduce the amount of remuneration expenses eligible for other federal tax credits calculated on the same remuneration.
  • Under the 10 percent Wage Subsidy program, once an eligible employer has calculated the subsidy, the employer can reduce its current payroll remittance by that amount, however, it cannot reduce the remittance of CPP or EI.  If the subsidy exceeds the tax remittance, you can reduce future remittances until you receive the full benefit.  This includes reducing remittances that may fall outside the application period for the wage subsidy.
  • If your business is closed and you did not pay wages, salaries, bonuses or other remuneration to employees during the application period, you cannot receive the subsidy, even if you are an eligible employer

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