10% Temporary Wage Subsidy

CRA has just released the details about the newly introduced 10% Wage Subsidy'. This subsidy is through automatic reduction in payroll remittance payable to CRA and does not require seperate application.

Please refer to the below link for complete information about this program. https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

  

• most employers except for large corporations qualify for the 10% temparary wage subsidy
  • Eligible employers must have a payroll account with the CRA on and before March 18, 2020
• the subsidy is equal to 10% of the remuneration (i.e. gross pay) 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.
  • If your employee's gross pay is greater than $13,750 during the above 90 day period, you need to limit subsidy calculation to $1,375.

HOW WILL I RECEIVE THIS SUBSIDY

• Employers do not need to apply seperately for this subsidy
• Employers continue to deduct income tax, CPP and EI from employees renumeration
• Once you have calculated your subsidy, you can reduce your current payroll remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy
  • You CANNOT reduce your remittance of CPP or EI premiums.
• If you are monthly remitter, you can reduce your remittance that is due to the CRA on April 15, 2020 to July 15, 2020, subject to any limit listed in point 2 above.
• The subsidy will NOT affect deductions from your employees. i.e. you will continue to do regular deduction from employees payroll.
• Subsidy will be considered taxable income of the company in 2019
• If subsidies exceed income tax remittance during above period, you may reduce future remittance even after June 20, 2020.
  • This usually happens only if the income taxes deducted from employees pay is less than 10% of their gross pay.