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|1 to 3||January to March 15, 2020||March 1 to May 31, 2019|
|4||January to March 15, 2020|
March 1 to June 30, 2019 or
March 1 to May 31, 2019
|5 to 9||January to March 15, 2020||July 1 to December 31, 2019|
Proposed changes for period starting in July to December:
|Period 5||Period 6||Period 7||Period 8||Period 9|
|Max. benefit per employee||$677.00||$677.00||$565.00||$452.00||$226.00|
|50% and over||60%||60%||50%||40%||20%|
|0% to 49%||1.2 x revenue drop||1.2 x revenue drop||1.0 x revenue drop||0.8 x revenue drop|
0.4 x revenue drop
Example 1: 20% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 1.20 x 20% = $270.96
Example 2: 50% decrease in sales and the employee makes $1,129. Available Base CEWs is $1,129 x 60% = $677.00.
|3 month average revenue drop||Top up CEWs rate|
|70% and over||25%|
|Period 5||Period 6||Period 7||Period 8||Period 9|
|Max. benefit per employee||$960.00||$960.00||$847.00||$734.00||$508.00|
|50% and over||1.25 x (3 month revenue drop - 50%) (Max. 25%)||1.25 x (3 month revenue drop - 50%) (Max. 25%)||1.25 x (3 month revenue drop - 50%) (Max. 25%)||1.25 x (3 month revenue drop - 50%) (Max. 25%)||1.25 x (3 month revenue drop - 50%) (Max. 25%)|
|0% to 49%||1.2 x revenue drop (Max. 60%)||1.2 x revenue drop (Max. 60%)||1.0 x revenue drop (Max. 50%)||0.8 x revenue drop (Max. 40%)||0.4 x revenue drop (Max. 20%)|
July 13, 2020
Program to be extended to December 2020
Proposed period 4 (June 2020) reduction is 30%
Period 5 & 6 are being reviewed
Program to be extended past June 6 expiry date.
CBC Article: Click Here
Applications to be released April 27, 2020.
We (JRA) can make the application for you via Represent a Client.
CRA has launched a CEWS Calculator for Employers, this can be accessed at: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html
Applications will be due September 30, 2020.
For cash flow purposes it might make sense for you to commence by taking the 10% Wage Subsidy.
The CEWS application is set to take 3-6 weeks to be rolled out and the CEWS subsidy will be reduced by the 10% subsidy dollar for dollar.
This would provide a 75% wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
Am I Eligible?
Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.
This subsidy would be available to eligible employers that see a drop of at least 15% of their revenue in March and 30% for the following months (see Eligible Periods).
How is the drop in revenue calculated?
An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method and would exclude revenues from extraordinary items and amounts on account of capital.
Employer can calculate revenues under the accrual or cash method, but not a combination of both.
Special rules for the computation of revenue are provided to take into account certain non-arm's length transactions, such as where an employer sells all of its output to a related company that in turn earns arm's length revenue. As well, affiliated groups are able to compute revenue on a consolidated basis.
|Claiming period||Required reduction in revenue||Reference period for eligibility|
March 15 – April 11
March 2020 over:
April 12 – May 9
Eligible for Period 1
April 2020 over:
Eligible for Period 1
Hence the options available are:
1. calculate revenues under the accrual or cash method 2. And either compare: a. Monthly revenue year-over year or b. Each month with the average of January and February 2020
Once the method is selected you are required to use the same approach for the entire duration of the program. The application will likely be available in May hence you will be able to calculate which option works best for you.
How do I calculate the Subsidy?
The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 would be the greater of:
In effect, employers may be eligible for a subsidy of up to 100% of the first 75% of pre-crisis wages or salaries of existing employees.
The pre-crisis remuneration for a given employee is based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.
A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of the lesser of:
What about the employer-paid contributions?
A new 100% refund for certain employer-paid contributions to Employment Insurance and the Canada Pension Plan has been introduced. This refund covers 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.
For greater certainty, employers are required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers apply for a refund, as described above, at the same time that they apply for the CEWS.
Which employees are eligible?
An eligible employee is an individual who is employed in Canada.
Employees who have been without remuneration for 14 or more consecutive days in the eligibility period, i.e., from March 15 to April 11, from April 12 to May 9, or from May 10 to June 6 are NOT eligible.
Where do I Apply?
Apply through the Canada Revenue Agency’s My Business Account portal.
Follow instruction on setting this up here: https://www.jarvisryan.com/help/categories/1/articles/12
Employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees. More details about the application process will be made available shortly.
What about the 10% Wage Subsidy?
For employers that are eligible for both the Canada Emergency Wage Subsidy and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the Canada Emergency Wage Subsidy in that same period.
What about the Work-Sharing Program?
For employers and employees that are participating in a Work-Sharing program, EI benefits received by employees through the Work-Sharing program reduce the benefit that their employer is entitled to receive under the CEWS.
How does the subsidy get treated?
The subsidy received is considered government assistance and is included in the employer’s income.
Our office is happy to help with any questions or issues.Contact Us