The federal government has announced an emergency wage subsidy for employers who have significant losses in revenue and are having to lay off employees as a result. This subsidy is would provide eligible employers 75% of an employee’s wage for up to 12 weeks, retroactive to March 15, 2020.
Sole proprietors, partnerships, corporations and not-for-profit companies would all be considered eligible, providing they meet the 30% revenue decrease criteria. The revenue decrease would be demonstrated by a year over year comparison i.e. March 2020 revenue versus March 2019 revenue.
Employers can apply for the wage subsidy for 75% of an employee’s wage up to a maximum of $847 per week. There is currently no overall maximum limit per employer. Employers are expected to make every effort to pay the difference of an employee’s wage. Employers would have to apply for this benefit each month for the three available months. Applications can be made via the CRA’s My Business Account or an online web application portal.
To ensure compliance with the program, there will be anti-abuse measures put in place which may include fines, penalties as well as repayment of amounts paid but later found to be ineligible.
Amounts received under this Emergency Wage Subsidy are considered taxable income for the company and must be reported as such.
For more information on the Canada Emergency Wage Subsidy (75% Wage Subsidy) please visit Canada.ca.
If you have any payroll related questions or would like to discuss a payroll continuity plan, please feel free to contact GET Payroll Solutions.