10% Temporary Wage Subsidy
What is it?
The 10% Temporary Wage Subsidy is a three-month measure that will allow eligible employers to reduce the amount of payroll deductions to be remitted to Canada Revenue Agency.
Who is considered an eligible employer?
• An individual (excluding trusts);
• A partnership if the partners consist of individuals, registered charities or Canadian Controlled
Private Corporations (CCPC’s) eligible for the small business deduction;
• A Not-for-Profit Organization;
• A registered charity; and
• A CCPC eligible for the small business deduction.
How much is the subsidy:
The wage subsidy is calculated as 10% of the gross wages paid between March 18, 2020 and June 19,
2020 to a maximum of:
- $1,375 per employee; and
- $25,000 total per employer.
How do I apply for this subsidy?
The subsidy will be claimed by reducing payroll remittances to be made by the employer. This will need to be calculated manually.
As an example, if your employee is paid gross wages of $4,000, and the resulting payroll remittances total $1,100, the available subsidy is 10% of the wages, or $400. The employer claims the subsidy by reducing the payroll remittance from $1,100 to $700. El and CPP needs to be paid, where applicable.
This will not impact the employee’s deductions from their wages, only the employer’s payroll remittance. This subsidy is taxable in the year received- hence, will need to be reported as income by the employer. Therefore, it is recommended that a summary of this subsidy is kept to reconcile T4s at the end of the year.
For more information or if you have questions related to this subsidy, please contact your
Daye & Partners representative.