Federal Wage Subsidies

Updated: May 8, 2020

Prorating bi-weekly pay periods that do not align with the CRA's 75% wage subsidy claim periods DOES NOT appear to be an acceptable approach according to the CRA.

The CRA updated their guidelines after we released the Easypay 75% emergency wage subsidy report with patch 2.20.06d on May 4, 2020. The option to prorate pay periods was originally included in this report based on suggestions made by accountants that we had spoken to prior to the CRA's updated guidelines.
Here is part of what the CRA's updated guidelines say:
"If an employer’s payroll cycle does not align with the wage subsidy for the claim periods, they will have to do a manual calculation to reflect the remuneration paid in respect of that claim period. Employers will not be permitted to use an average of the daily wages paid. The eligible remuneration reported on an employer’s wage subsidy application must reflect the actual amount paid in respect of the claim period."
PLEASE READ paragraphs 26-1 and 26-2 at this link: CRA - Frequently asked questions - Canada emergency wage subsidy

Easypay software patch 2.20.06d includes a two new reports that can be used to help calculate the 10% and 75% wage subsidies. The patch is available on the Downloads page.
Please note: The CRA's 75% subsidy calculation is based on weeks defined by the CRA as Sunday to Saturday, beginning March 15, 2020. Given the various pay frequencies and time periods allowed in Easypay, the usefulness of the new 75% wage subsidy report will depend upon your particular payroll setup.

A few details about the subsidies:

  • For employers that are eligible for both subsidies, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the 75% Canada Emergency Wage Subsidy in that same period.
  • 10% Temporary Wage Subsidy
    • A three-month measure that allows eligible employers to reduce the amount of payroll deductions required to be remitted to the CRA.
    • Subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer.
    • Details and eligibility: Canada Revenue Agency: 10% Temporary Wage Subsidy FAQ
  • 75% Canada Emergency Wage Subsidy (CEWS)
    • The CEWS program is in place for a 12-week period, from March 15 to June 6, 2020.
    • The subsidy is available to eligible employers that see a drop of at least 15 per cent of their revenue in March 2020 and 30 per cent for the following months.
    • Eligible businesses can apply for CEWS through the CRA’s My Business Account portal.
    • Applications for the subsidy must be submitted before October 2020.
    • Details and eligibility: Canada Revenue Agency: Canada Emergency Wage Subsidy (CEWS)