75% Wage Subsidy Approved by Parliament
The 75% wage subsidy was approved by Parliament on the weekend. The application process will be available through the My Business Account portal, however the application is not available yet.
Employers that prove eligible for March are automatically eligible for the next period. After that, the 3rd period will have to be re-applied for. The subsidy will be refunded to the employer, after the period has passed and the application is accepted.
We strongly advise registering for the My Business Account service at this time. If you are experiencing difficulty with this, please call the corporate CRA number at 1-800-959-5525.
This wage subsidy will be available to cover a 12 week period starting March 15th, 2020. Applicants can include individuals, taxable corporations, non-profits and charities. Eligibility is based on declines in revenues as follows:
- Period 1 is March 15 – April 11 and requires a 15% reduction of March 2020 revenue as compared to either March 2019 or the average of Jan and Feb 2020.
- Period 2 is April 12 – May 9 and requires a 30% reduction of April 2020 revenue as compared to either April 2019 or the average of Jan and Feb 2020.
- Period 3 is May 10 – June 6 and requires a 30% reduction of May 2020 revenue as compared to either May 2019 or the average of Jan and Feb 2020.
There are caveats to this subsidy that applicants must keep in mind. The subsidy can be applied for on a cash or accrual basis of accounting, and this can mean the difference between being eligible or not. Please seek guidance from your accountant before applying. Certain extraordinary incomes in prior periods may also be disallowed in the calculation.
The subsidy supports pre-crisis salary up to 75% of the wage/salary paid to a max of $847 per week or the wage/salary paid, if lower than the max. This means that 100% of those making less than $847 per week may be covered during this period. Pre-crisis remuneration is labelled as that which was paid between Jan 1, 2020 and March 15, 2020 and INCLUDES taxable benefits (as the guide of the eligible amount). New employees are also covered. Taxable benefits in regards to use of a company vehicle are not included.
There is no limit on the amount of employees that the employer can claim this subsidy on. Since the subsidy is retroactive to March 15th, those employers that choose to rehire as of this date will require that employees repay the personal subsidies that they have received for the same time period.
The wage subsidy is taxable income where the entity is a taxable entity. If you have claimed the 10% wage subsidy, you can simply deduct it off of this one when you apply for it.
There is also a component which refunds the employer’s portion of EI and CPP during this period. This refund does not count towards the max. subsidy of $847 per week described above.
Be sure to seek professional advice should you have any questions with regards to this program. Also note that we are expecting even more details as time goes on.