COVID-19 Update: Temporary Wage Subsidy for Employers
TEMPORARY WAGE SUBSIDY
In response to the COVID-19 pandemic, the government introduced a Temporary Wage Subsidy program that allows eligible employers to reduce the amount of payroll deductions required to remit to the CRA between March 18, 2020, and before June 20, 2020.
Previously (as of March 18, 2020), only corporations and not-for-profits were eligible (with some restrictions).
But as of March 25, 2020, partnerships and sole-proprietorships with payroll accounts are eligible too.
This is welcome news for many employers that are not corporations and fall into one of the above categories.
The subsidy is equal to 10% of the remuneration you pay between March 18, 2020, and June 20, 2020, up to $1,375 per employee and to a maximum of $25,000 total per employer.
Employees are not affected by this subsidy. Wagepoint (the payroll provider that we use) will continue deducting income tax, Canada Pension Plan contributions, and Employment Insurance premiums from salary, wages, bonuses, or other remuneration paid to your employees, as it currently does. The subsidy is only calculated when you remit these amounts to the CRA (i.e. you can hold 10% back up to the maximum stated above).
If you’re using another payroll provider, please reach out to them for clarification. If you need help, please let us know.
Our team will be reaching out to everyone individually to begin the process and confirm that you want to partake in this program.
September 2020, Update:
Recently the CRA released Form PD27 – 10% Temporary Wage Subsidy Self-Identification Form for Employers. This is required to be filed before filing 2020 T4’s. The form is required for all employers who are eligible for the TWS whether they chose to claim the 10% (or less) subsidy or not. Click here for more information.
EMPLOYER HEALTH TAX
The Ontario government announced relief measures around the Employer Health Tax (EHT). The annual exemption for 2020 will be increased from $490,000 to $1 million (a savings of $9,945 if a company's payroll is above $1 million).
We will continue to update you as more information becomes available.
Stay healthy and safe,
The ConnectCPA Team
