Do you know how to access the Canadian government’s temporary wage subsidy? It could help you to reduce payroll deductions and keep your staff through the pandemic.
In less than two weeks, the escalation of the coronavirus has had devastating effects on the Canadian and global economy. With 4038 total cases in Ontario alone as of April 5th, the spread of coronavirus continues throughout the nation, affecting businesses’ ability to continue their operations and maintain their workforces.
With just a week or two of lowered or altogether halted activity from customers and clients, these small businesses have had to lay staff members off, make significant changes to their services, and dip into their savings. In response, the Canadian government has rolled out an $82 million economic aid package, intended to support families, small businesses, and other members of the Canadian economy.
A key aspect of this package is a temporary wage subsidy – do you know how it works, and how to access it?
Small businesses will receive wage support in the form of a reduction of the amount they have to pay to the Canada Revenue Agency (CRA) in payroll deductions. Instead of a handout, this subsidy will be a reduction in expenses.
The subsidy is equal to 10 percent of the remuneration paid between March 18 and June 20, 2020, up to $1,375 per employee and a maximum of $25,000 total per employer, according to the CRA.
“If you calculated a subsidy of $2,050, you would reduce your current remittance of federal, provincial or territorial income tax by $2,050,” the CRA said to Global News. “You could continue reducing future income tax remittances, up to the maximum of $25,000, for all remuneration paid before June 20, 2020.”
To benefit from the temporary wage subsidy, you must:
It’s important to note that companies that are closed or did not pay salary, wages, bonuses or other remuneration to an employee between March 18 and June 20, 2020, cannot receive the benefit.
Even if you are eligible according to the above guidelines, to access the subsidy you also need to have the following documentation available:
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Published On: 6th April 2020 by Ernie Sherman.