Canada Emergency Wage Subsidy State and Local Tax

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Canada Emergency Wage Subsidy

Canada emergency wage subsidy (CEWS) helps employers retain their existing employees on the payroll and rehire employees previously laid off due to COVID-19.

Who is eligible for the subsidy?

In general, employers of all sectors, except public institutions, are eligible. To be an eligible corporate employer, an applicant must: 

  • Be a taxable corporation 
  • Have experienced an eligible reduction in revenue* 
  • Have had a Canada Revenue Agency (CRA) payroll account as on March 15, 2020  
Claim Period Required Reduction
Period 1 (March 15 – April 11, 2020) 15%
Period 2 (April 12 – May 9, 2020) 30%
Period 3 (May 10 – June 6, 2020) 30%
Period 4 (June 7 – July 4, 2020) 30%
Period 5 (July 5 – August 1, 2020) TBD
Period 6 (August 2 – August 29, 2020) TBD

How much is the subsidy?

There is no limit on the total subsidy amount that an eligible employer can claim. The subsidy is capped for each employee based on their weekly remuneration. For each eligible employee, up to 75% of eligible remuneration not exceeding CAD 847 per week can be subsidized for up to 24 weeks.**

Eligible remuneration includes salary, wages, certain taxable benefits, fees and commissions.

How is the subsidy claimed?

Once deemed as an eligible employer, the subsidy can be calculated based on eligible remuneration paid to eligible employees for a respective period from March 15, 2020, to August 29, 2020,** and the eligible employer may submit an application to the CRA.

Eligible employees exclude those without remuneration for 14 consecutive days or more. If employees were laid off or furloughed, they must be rehired and paid, before calculating the subsidy for the applicable claim period.

Are there restrictions?

If eligible for both the CEWS and the 10% temporary wage subsidy (TWS) for a period, all amounts that an employer claims under the 10% TWS for remuneration paid in a specific claim period reduce the amount available to be claimed under the CEWS in the same period.

What are the compliance requirements?

Adequate books and records to support each claim and employer eligibility for the CEWS are required. 

The CRA will verify each applicant's eligibility to receive the CEWS. If the eligibility requirements are unmet for a period, any amounts received for that period must be repaid.

How we can help

Duff & Phelps’ Site Selection and Incentives Advisory team can provide guidance on eligibility assessment, subsidy calculation and compliance reporting.

*Revenue Reduction Requirement
**The proposed changes announced on July 17, 2020, include the extension of the CEWS until December 19, 2020.

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