To simplify your work during the global COVID-19 pandemic, Nethris has centralized useful information for your business. We provide you with information regarding our services and the government measures in Canada.
On this page:
- Production of records of employment
- FAQ on federal wage subsidies
- Rehiring or reactivating an employee
PRODUCTION OF RECORDS OF EMPLOYMENT
The second wave of the COVID-19 pandemic carries its share of challenges. We want to simplify your life by supporting you with the production of records of employment, should the need arise. Laying off an employee is difficult, but generating the record of employment is easy.
Our video tutorials can help you
Whether you are generating them in paper or electronic format, our video tutorials will guide you, step by step, to produce your records of employment.
For a written procedure, you can also access our online User Help.
Follow the instructions from Service Canada
Service Canada has provided clarifications to guide you in producing your employees’ records of employment during this pandemic. They are as follows:
- If your employee is sick or quarantined due to COVID-19, enter in Box 16 – Reason for issuing this ROE: “Code D – Illness or injury”.
- If your employee stops working due to shortage of work or shutdown due to COVID-19, enter in Box 16 – Reason for issuing this ROE: “Code A – Shortage of work”.
- If your employee refuses to come to work but is not sick or quarantined, enter in Box 16 – Reason for issuing this ROE: “Code E: Quit” or “Code N: Leave of absence”.
In any case, do not add comments. Comments should be added only when necessary, as this causes the ROE to be pulled from the automatic processing queue for review by a Service Canada agent, thus slowing down the process. Take note that Service Canada does not recommend amending ROEs that have been submitted with comments.
Opt for electronic records of employment
Are you producing your records of employment in paper format? To facilitate their transmission, opt for electronic records of employment (ROE SAT). By means of this service, your employees will have access to a copy via My Service Canada Account (MSCA) within two business days of their production. You can request this service by sending an email to firstname.lastname@example.org.
FREQUENTLY ASKED QUESTIONS (FAQ) ON FEDERAL WAGE SUBSIDIES
We update this section’s information as fast as possible, in light of the available details. Be assured that we remain on the lookout for governmental announcements.
Launched on March 18, 2020, then improved several times, the Government of Canada’s COVID-19 Economic Response Plan provides financial assistance to businesses in struggle during the crisis. Here is an overview of the most frequently asked questions regarding both measures of the program: the Canada Emergency Wage Subsidy (CEWS) and the 10% Temporary Wage Subsidy for Employers.
Q1: What are the most recent modifications to the Canada Emergency Wage Subsidy (CEWS)?
Initially, the CEWS would reimburse 75% of wages paid to businesses that experienced a loss in revenue of at least 30% (15% in March).
However, the CEWS has been revised on more than one occasion since it was implemented by the Government of Canada on March 27, 2020. In July, the Canada Revenue Agency (CRA) adapted its eligibility criteria and extended its program until November 21, 2020.
Consequently, the CEWS became accessible to any eligible businesses that experienced a drop in revenue, under a new two-rate calculation formula: the base wage subsidy rate, which varies depending on the revenue decline, and the top-up wage subsidy rate for businesses that experience a decline in revenue of more than 50%. When making your calculations, refer to the CRA tables below.
Here is an overview of some of the other adjustments made to this support program in July:
- The CEWS eligible employer list has been extended;
- Employees that are without remuneration in respect of 14 or more consecutive days are now eligible for the CEWS;
- For periods 5 to 9, you would have the possibility of using an alternative approach for the drop-in-revenues test;
- Under the safe harbour rule for claim periods 5 and 6, a business can choose to apply the new rules for the CEWS or continue to claim coverage for 75% of wages paid. As of claim period 7, all businesses are required to comply with the adjusted CEWS program;
- To accommodate entrepreneurs with seasonal employees, or employees that are returning from a prolonged leave of absence, the wage average calculation now offers more flexibility. The employers concerned will now have the choice between two (2) reference periods for the calculations. It should be noted, however, that the pre-crisis wage average concept for active arm’s length employees has been abolished for period 5 and subsequent periods1. As of this period, the CEWS calculation will be based solely on actual remuneration paid for the eligibility period;
- A modified special rule would apply to employees that do not deal at arm’s length with the employer. The comparative calculations can now be based on reference remuneration from 2019 (the wage subsidy for such employees would be based on the employee’s weekly eligible remuneration or pre-crisis remuneration, whichever is less, up to a maximum of $1,129).
On November 19, 2020, Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy) was adopted. In addition to the creation of the Canada Emergency Rent Subsidy (CERS), this bill extends the CEWS until June 30, 2021, to continue to support Canadian businesses throughout this difficult period.
Although the program’s main criteria remained unchanged until December 19, 2020 (period 10), the government has since modified certain rules:
- The deadline to submit a request is January 31, 2021, or 180 days after the end of the qualifying period;
- Period 10 has been added to cover wages from November 22 to December 19, 2020;
- The maximum subsidy rate of 65% does not change (base percentage 40% + top-up percentage 25%);
- The base and top-up rates are now determined based on the decline in revenue for one month.
To calculate the top-up rate, employers can opt for this new rule OR continue to determine their rate based on the 3-month average revenue drop, whichever is more advantageous (safe harbour rule);
- The employer portion of employment insurance (EI), Québec Parental Insurance Plan (QPIP), Canada Pension Plan, and Québec Pension Plan (QPP) contributions for employees on paid leave will be reimbursed until December 19, 2020.
- As of period 9 (October 25 to November 21, 2020), the calculation of the amount for employees on paid leave further corresponds to employment insurance benefits. For claim periods 9 and 10, the allotted amount is the greater of:
- $500, and;
- The lesser of:
- 55% of baseline remuneration in respect of the eligible employee determined for that week, and;
N.B. An employee is considered to be on leave with pay throughout a week if that employee is remunerated by the employer for that week, but does not perform any work for the employer in that week. This refund is not available for eligible employees that are on leave with pay for only a portion of a week.
More recently, the CRA released the Fall Economic Statement 2020: Supporting Canadians and Fighting COVID-19. This plan announced that the CEWS rate would return to 75% for the periods from December 20, 2020, to March 13, 2021, to ensure continued support to employers during the first quarter of 2021.
On December 18, 2020, the government made the necessary modifications to the regulations to raise the subsidy maximum to 75%.
The eligibility criteria for claim periods 11 to 13 are now known:
- Periods 11, 12 and 13 have been added :
- Period 11 : December 20, 2020, to January 16, 2021 (open claim period)
- Period 12 : January 17, 2021, to February 13, 2021 (open claim period)
- Period 13 : February 14, 2021, to March 13, 2021 (upcoming).
- The maximum base rate is 40% and the maximum complementary rate is 35%, for a combined rate of 75%;
- To determine the allowable CEWS rate , a business will henceforth consider its revenue drop on a monthly basis only (the notion of comparison on three months no longer exists for periods 11 to 13);
- The top-up rate is based on the same decline of revenue used to calculate your base rate.
- Employees on a leave with pay:
- The maximum subsidy amount available is now $595 following its harmonization with the employment insurance benefits;
- The employer’s contributions to employment insurance (EI), Quebec parental insurance plan (QPIP), Canada pension plan (CPP) and Quebec Pension Plan (QPP) continue to be refunded until March 13, 2021.
To know the details pertaining to the CEWS adjustments, please refer to the Government of Canada website.
Q2: Am I eligible to the CEWS?
Based on recent adjustments, the following employers are eligible for the CEWS:
- Corporations (other than public institutions) that are not exempt from tax under Part I of the Income Tax Act (the Act);
- Individuals (including a trust);
- Registered charities (other than public institutions);
- Persons that are exempt from tax under Part I of the Act (other than public institutions);
- Agricultural organizations;
- Boards of trade or chambers of commerce;
- Non-profit corporations for scientific research and experimental development;
- Labour organizations or societies;
- Benevolent or fraternal benefit societies or orders;
- Non-profit organizations;
- Partnerships, each member of which is a person or partnership described in this list;
- Registered journalism organizations;
- Registered Canadian Amateur Athletic Associations;
- Non-public educational and training institutions, including specialized schools such as language schools, driving schools, ballet schools, etc.;
- Partnerships with non-eligible members not exceeding 50%;
- Indigenous government-owned corporations;
- Partnerships where each partner of the partnership is either an Indigenous government or an eligible employer.
The CEWS is available in the following situations:
- When the majority of a business’s assets were bought by another;
- When an amalgamation took place (under certain conditions only).
N.B. Public bodies are not eligible for this subsidy.
For more information on the eligibility criteria for the CEWS, refer to the Who can apply page on the CRA’s website.
Q3: Which employees are eligible to the CEWS?
To be eligible for the CEWS, an employee must be employed in Canada by an eligible employer.
N.B. Effective July 5, 2020, the CEWS eligibility criteria would no longer exclude employees that are without remuneration in respect of 14 or more consecutive days in an eligibility period, which was the case for periods 1 to 4.
Q4: Can I claim the CEWS for an employee that I rehired and pay retroactively?
Yes. An eligible employer can rehire eligible employees and pay them retroactively in respect of a claim period and qualify for the CEWS.
Q5: Can I claim the wage subsidy for an eligible employee even if they were hired after March 15, 2020?
Yes. An eligible employer may be able to claim the CEWS for remuneration paid to employees hired after March 15, 2020.
Q6: How can I attest to my reduction in revenues?
To attest to the reduction of revenues for the base CEWS, you have two (2) options, which apply to periods 1 to 13 inclusively:
- Compare your revenues for the period you are applying for, to your revenues for the same period, the previous year (“general year-over-year approach”).
- Compare your revenues for the period you are applying for, to the average revenue for the months of January and February 2020 (“alternative approach”).
Employers are not obliged to apply the same approach, for periods 5 to 10, that they used for periods 1 to 4. Therefore, you are free to choose the method that is the most beneficial for your business, either the “general approach” or the “alternative approach”. Regardless of the method chosen, you will need to use this approach for periods 5 to 10.
As of periods 11 to 13 (December 20, 2020 to March 13, 2021), please note that you have to establish your revenue loss by comparing monthly revenue, in accordance with the reference periods defined by the CRA (see Table 2A hereafter):
For the top-up CEWS rate, you are eligible for periods 5 to 10 if you experience a revenue drop of more than 50% when comparing your average monthly revenue from quarter to quarter (see 3-month reference periods in Table 2B hereinafter). For the comparative calculation, either of the above-mentioned approaches may be used.
N.B. By virtue of the rules implemented in November 2020, for periods 8 to 10, your business has the choice to determine its revenue reduction on a quarterly or monthly basis. If you choose the second option, refer to Table 2C.
Furthermore, by virtue of the rules applicable as of January 2021, the revenue drop of the business will be established strictly on a monthly basis for periods 11 to 13, in accordance with the reference periods in Table 2C hereafter (from the CRA’s website):
Q7: I was told that the government could also reimburse certain contributions. Is this true?
Yes. For all the salaries paid to employees on leave with pay, the Government of Canada gives to employers that are eligible to the CEWS a 100% refund for the following employer-paid contributions:
- Employment Insurance;
- Canada Pension Plan;
- Québec Pension Plan;
- Québec Parental Insurance Plan.
This refund covers 100% of these contributions for each week throughout which eligible employees are on leave with pay during the eligible period. There is no overall limit on the refund amount that an eligible employer may claim.
For greater certainty, employers are required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers must submit their claim for a refund with their application for the CEWS.
To help you isolate remuneration paid to employees on leave with pay and identify them easily, Nethris has created earning code G98 – Hr. COVID N-Work, which we strongly encourage you to use immediately. This code will make it easier for you when you need to request reimbursement of the contributions remitted for them.
N.B. An employee is considered to be on leave with pay throughout a week if that employee is remunerated by the employer for that week but does not perform any work for the employer in that week. This refund is not available for eligible employees that are on leave with pay for only a portion of a week.
Q8: When and how can I benefit from the CEWS?
CEWS applications can be submitted as of April 27, 2020, via the Canada Revenue Agency’s My Business Account portal.
An application for a claim period can only be submitted once the period has ended, as long as the eligible employer has paid the eligible remuneration being claimed for that period.
Note that an eligible employer’s payroll frequency does not affect the eligible remuneration paid calculation with regard to the wage subsidy. An employer whose payroll cycle does not correspond to the subsidy claim periods will need to do a manual calculation to take into account remuneration paid for a claim period.
When completing the application, you will need:
- Your payroll program account number (123456789RP0001, for example);
- To know which claim period you are applying for;
- All of the information necessary to complete the applicable fields in the application.
The CEWS will be processed at the payroll program account level, so you will have to file a separate application for each payroll program account.
The government has provided you with a calculator, which allows you to:
- Determine the amounts (lines A to G) you must enter in the online form when submitting a claim;
- Preview the subsidy amount you may receive;
- Print or save your results to validate your claim.
The calculation tool offers two (2) options: the online calculator (recommended for businesses with fewer than 20 employees) or the downloadable calculation sheet (Excel). You can currently use either of the two options of the calculator for claim periods 1 to 10. Other periods will be added when they become available.
Note that the CRA has updated its calculator to include the changes adopted on November 19, 2020, pertaining to the top-up subsidy calculation for periods 8 to 10. Based on the indications provided, the calculator will automatically apply the most advantageous subsidy rate you are eligible to, taking into account the safe harbour and deeming rules, as well as the information you provided.
To understand what the wage subsidy calculation is based on, read the How the subsidy is calculated page.
N.B. The calculation tool provided by the Government of Canada is not an official application form.
Before submitting your application, we suggest that you ensure that you are registered and have access to the CRA’s My Business Account and, if you have not already done so, that you sign up for direct deposit.
Q9: How can I gather the information needed to use the calculator provided by the federal government for Canadian employers?
First, it is noteworthy to mention that your CEWS application should be submitted based on your pay period end dates rather than the dates wages are paid (payable dates).
To identify the information required to use the CEWS calculator provided by the Government of Canada, Nethris has provided you with the COVID-19 Wage Subsidy CEWS (SPD620) report (previously entitled COVID-19 Wage Subsidy 75%). This report is the recommended solution for all our clients, whether you are a Nethris Internet Suite or Telephone Payroll user.
With the help of the COVID-19 Wage Subsidy CEWS report, which can be used and modified with ease, you can effortlessly identify the following information:
- The average wages paid per employee from January 1 to March 15, 2020;
- The calculation of CEWS eligible earnings for each claim period according to the “period end date” method based on clarifications provided by the Government of Canada;
- The data for earning code G98 – Hr. COVID N-Work, used to isolate the remuneration paid to employees on paid leave.
For more details concerning the COVID-19 Wage Subsidy CEWS (SPD620) report and how to use it, refer to the “SPD620 – COVID-19 Wage Subsidy CEWS report and using payroll preprocessing” (for the Nethris Internet Suite) and “SPD620 – COVID-19 Wage Subsidy CEWS” (for Telephone Payroll users) procedures, available in the Documentation section (? > Documentation > COVID-19 Documents) of the Nethris Internet Suite.
Therefore, please note that:
- You may have to make a few adjustments to the report to cover the application claim period;
- For clients who manage their payroll on a biweekly basis while specifying the hours worked each week, the average wages are calculated as if your payroll was processed weekly, therefore minimizing the need for manual adjustments.
- To calculate the average wages (baseline remuneration), you can choose a period other than January 1 to March 15, 2020. You must, however, inform the CRA of your choice using the RC661 – Canada Emergency Wage Subsidy Attestation form. If you choose this option though, we recommend that you make the necessary calculations manually.
To identify the information required to make the necessary calculations, you can refer to either of the following reports:
- Nethris Internet Suite users: COVID-19 Wages per payment dates1 system report;
- Telephone Payroll users: Payroll record (SPD603).
The COVID-19 Wages per payment dates report is available under the Reports > Report generator > Reports list tab of the Nethris Internet Suite, and the Payroll record (SPD603) report is found under Reports > Payroll results > Payroll reports.
In order to guide you on how to use these two reports, procedures were created and made available in the Documentation section (? > Documentation > COVID-19 Documents) of the Nethris Internet Suite.
1 You should use this report if you have the Report Generator solution and manage over 20 eligible earnings. If this is not the case, it is better to use the Payroll record (SPD603) report.
Q10: What should I do if I realize that I may have submitted one or more incorrect CEWS applications or if I wish to modify an application that has already been submitted?
If you feel that you may have made an error on a previously submitted CEWS application or if you wish to verify the accuracy of prior claims (recommended by Nethris), we suggest that you compare the amounts claimed since March 2020 and the amounts indicated in the COVID-19 Wage Subsidy CEWS (SPD620) report.
If you notice a discrepancy between these amounts, it is possible, as of June 1, 2020, to request adjustments to applications you have already submitted via the CRA’s My Business Account portal.
Whether using My Business Account (for business owners) or Represent a Client (for authorized employer representatives) to modify a previously submitted CEWS application, you must select the Change a prior claim tab and:
- Select Canada Emergency Wage Subsidy (CEWS) under your payroll program account number (RP) on the home page of My Business Account or Represent a client.
If you need to amend applications for more than one payroll program account number, you will be required to do so independently.
- Ensure that you meet the conditions detailed in the Before you start section before making an adjustment request.
- Choose the period for which you wish to make a modification.
- Select the Change a prior claim
- Click on Next to view the details of a previous application.
- Enter the new amount on each line you wish to modify. Only enter the information corresponding to the chosen period. For example, if the initial amount is $100.00 and you wish to increase it by $20.00, change the amount to $120.00.
N.B. You will need to have an updated attestation form in your file to support the amended application.
Q11: How do I return an excess subsidy amount received to CRA?
After comparing the amounts claimed since March 2020 and the amounts indicated in the amended version of the COVID-19 Wage Subsidy CEWS (SPD620) report presented on June 6, 2020, you may need to return all or part of the subsidy received if you:
- send the CRA any amendments to a previous application;
- made a calculation or data entry error for a claim period;
- find out you do not qualify for the subsidy after you receive a payment;
- receive a notice from the CRA that, following a review, your claim has been reduced or denied.
Any excess CEWS amount received that is not returned may be subject to interest.
If you need to return all or part of a wage subsidy payment for any reason, follow the procedure indicated in the Return the CEWS section of the CRA website.
Q12: I have also heard about a 10% subsidy. Is this the same one?
No. It is the 10% Temporary Wage Subsidy for Employers, which was announced on March 18, 2020. This temporary measure, applicable on remuneration paid from March 18, 2020, to June 19, 2020, allows eligible employers to reduce the amount of federal, provincial or territorial income tax to be remitted to the CRA. This subsidy corresponds to 10% of the remuneration paid, up to $1,375 for each eligible employee and to a maximum of $25,000 total per employer. You can retroactively benefit from this subsidy (see question 16).
N.B. If you receive the subsidy, you have to report the total amount as income in the year in which the subsidy is received.
Q13: Is my business eligible for the 10% Temporary Wage Subsidy for Employers?
According to CRA’s criteria, you are eligible if you:
- Are a(n):
- Individual (excluding trusts);
- Partnership (see note below);
- Non-profit organization;
- Registered charity; or a
- Canadian-controlled private corporation (including a cooperative corporation) eligible for the small business deduction.
- Had an existing business number and payroll program account with the CRA on March 18, 2020; and
- Pay salary, wages, bonuses, or other remuneration to an employee.
N.B. An eligible employee is an individual who is employed in Canada.
Partnerships are only eligible for the subsidy if their members consist exclusively of individuals (excluding trusts), registered charities, or Canadian-controlled private corporations (CCPCs) eligible for the small business deduction.
If you did not pay salary, wages, bonuses, or other remuneration to an eligible employee from March 18, 2020, to June 19, 2020, you cannot receive the subsidy, even if you are an eligible employer.
For more information on the eligibility criteria for the 10% Temporary Wage Subsidy for Employers, refer to question Who is an eligible employer of the CRA’s Frequently Asked Questions regarding this support measure.
Q14: Can this remittance reduction be applied to ALL my source deductions at the federal level?
No. According to the CRA, this reduction can only be applied to federal, provincial or territorial taxes that would normally be remitted to the CRA. Therefore, the remittances for Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums cannot be reduced.
The CRA provides the following clarifications to this effect on its website:
Once you have calculated your subsidy, you can reduce your current remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy. […] If the income taxes you deduct are not sufficient to offset the value of the subsidy in a specific period, you can reduce future payroll remittances to benefit from the subsidy. This includes reducing remittances that may fall outside of the application period for the wage subsidy (after June 19, 2020).
Q15: How can I calculate the 10% Temporary Wage Subsidy for Employers?2
The CRA will not automatically calculate the allowable subsidy. As the eligible employer, you are responsible for calculating the subsidy manually.
To calculate your subsidy:
- Determine the total number of eligible employees employed from March 18 to June 19, 2020.
- Multiply the number of eligible employees by the maximum of $1,375 per eligible employee. Make sure this amount does not exceed the maximum of $25,000 per eligible employer.
- Calculate your gross payroll from March 18 to June 19, 2020 (total of the 3-month salary for each eligible employee).
- Multiply your gross payroll by 10% to get your allowable subsidy amount. Make sure this amount does not exceed the maximum of $1,375 per eligible employee or $25,000 per eligible employer.
To identify the information required to calculate the amounts you are entitled to, you can refer to either of the following reports:
- Nethris Internet Suite users: COVID-19 Wages per payment dates3 system report;
- Telephone Payroll users: Payroll record (SPD603).
The COVID-19 Wages per payment dates report is available under the Reports > Report generator > Reports list tab of the Nethris Internet Suite, and the Payroll record (SPD603) report is found under Reports > Payroll results > Payroll reports.
In order to guide you on how to use these two reports to calculate your subsidy amounts, procedures were created and made available in the Documentation section (? > Documentation > COVID-19 Documents) of the Nethris Internet Suite.
2 Please note that the 10% Temporary Wage Subsidy was in effect from March 18, 2020, to June 19, 2020. You can still apply for any period included between those dates, but cannot apply for subsequent periods.
3 You should use this report if you have the Report Generator solution and manage over 20 eligible earnings. If this is not the case, it is better to use the Payroll record (SPD603) report.
Q16: If I did not reduce my source deductions remittances by the 10% Temporary Wage Subsidy for Employers during the targeted period, does this mean that I can no longer benefit from it?
No. You can claim the subsidy amount even if the period of eligibility has expired. The CRA provides the following clarifications to this effect:
If you are an eligible employer, but choose not to reduce your payroll remittances during the year, you can still calculate the 10% Temporary Wage Subsidy for Employers on remuneration paid from March 18, 2020, to June 19, 2020. […] The CRA will pay the amount to you or transfer it to your next year’s remittance.
You can still claim this subsidy, but it cannot be applied if you reduce your 2021 federal tax payments withheld at source.
To benefit from the subsidy, you must fill out the PD27, 10% Temporary Wage Subsidy Self-identification Form for Employers, and send it to the CRA. In the “Additional information” section of the PD27, you must indicate how you want to receive your subsidy amount by requesting one of the following options to the CRA:
- Deposit the total amount to your account;
- Transfer the total amount to your account for next year (the CRA will apply the transfer after processing the declaration of T4 information for the following year).
Q17: If I did not reduce my source deduction remittances during the eligible period for the 10% Temporary Wage Subsidy, how can I do it now?
If you were eligible for the 10% Temporary Wage Subsidy, you can calculate the amount you are eligible to receive based on the remuneration paid from March 18 to June 19, 2020. The CRA will pay the subsidy amount or apply it to your remittances for the next fiscal year.
To claim this subsidy, you must fill out and submit the Form D27 for each of your payroll program accounts.
The CRA will use the information from your PD27 to reconcile the subsidy on your payroll program accounts. This will ensure you do not receive a deficiency notice.
Certain scenarios may help you complete the PD27 form, based on your circumstances. You can view them under the sub-title “Submitting your self-identification form” on the 10% Temporary Wage Subsidy for Employers – Reporting the TWS to the CRA page from Government of Canada’s website.
Furthermore, note that we designed a tool to help you fill out this form; the Info. to fill out form PD27 – SPD622 report. This report is available on the Nethris Internet Suite since December 10, 2020, and amendments were made on January 15, 2021 in order to respond to the needs of employers who have more than one payroll account at the federal level.
For detailed information on how to use this report, please refer to the notice we sent you on December 2, 2020, which is also available in the Messages section of the Nethris Internet Suite.
Q18: How does the 10% Temporary Wage Subsidy for Employers interact with the CEWS?
You may have been eligible for both the 10% Temporary Wage Subsidy for Employers and the CEWS in the period during which they were simultaneously in effect. In such a case, you cannot cumulate the amounts for both subsidies. Therefore, amounts for the 10% Temporary Wage Subsidy for Employers will reduce your CEWS amount.
Note that the CRA allows you to apply a rate lower than 10% for this subsidy. You must fill out the PD27 form and indicate the appropriate percentage of your claim (0% to 10%).
Between March 18 and June 19, 2020, you were eligible for both subsidies. You paid $20,500 in remuneration from April 12, 2020, to May 9, 2020, and calculated your 10% Temporary Wage Subsidy to be $2,050. For simplicity, you would only like to claim the CEWS. You may elect for the 10% Temporary Wage Subsidy for Employers to be equal to 0% of the remuneration you paid from April 12, 2020, to May 9, 2020. When you apply for the CEWS for the same period, you will not have to reduce your claim by the amount you were eligible for under the 10% Temporary Wage Subsidy for Employers.
Q19: When filling out the CEWS calculator fields, I am required to enter the amounts I calculated to for the 10% Temporary Wage Subsidy. I am eligible for this subsidy, however, I prefer to claim it at a later time. What must I enter?
When filling out the CEWS calculator fields, you can enter any amount corresponding to a percentage between 0% and 10% in the 4. Deductions section.
This information must be repeated when submitting your official CEWS claim. You then have to enter the subsidy amount you chose to apply for on line F – 10% Temporary Wage Subsidy for Employers reduction. You must also fill out the PD27 form, on which you will be required to provide the elected percentage for the 10% Temporary Wage Subsidy. If $0.00 was entered on line F, 0% must be entered on the PD27 form.
Q20: In its publications regarding the 10% Temporary Wage Subsidy, the federal government speaks of the dates on which employee wages are paid. Which dates are being referred to in this case?
Regarding the 10% Temporary Wage Subsidy when the government refers to wages paid during a certain period, it is referring to the payable dates.
CAUTION! Please note that with regard to the CEWS, the government also uses the payable date notion, but this only refers to the average pre-crisis wages.
When entering the information to calculate the amounts you are entitled to for this subsidy (data entered in the calculator provided by the government), the data entered should be based on the “days paid”, therefore according to work days using the “period end date” method.
Q21: I heard that the CRA issued particular instructions regarding the 2020 T4 tax slips. What are these instructions?
The CRA has indeed announced at the end of August that all employers will have to declare four (4) new amounts on their 2020 T4 slips. In this way, the CRA will be able to validate payments for the CEWS, the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB).
Therefore, for the 2020 tax year, T4 tax slips will contain four (4) new codes in order to declare the employment income for the following specific periods:
- Code 57: Employment income – March 15 to May 9
- Code 58: Employment income – May 10 to July 4
- Code 59: Employment income – July 5 to August 29
- Code 60: Employment income – August 30 to September 26
In this regard, we sent you the New T4 reporting requirements in connection with COVID-19 notice on October 2, 2020. This notice informed you that our systems would be updated in compliance with these requirements and of the solutions implemented as well as the procedure to follow to make use of them.
Familiarize yourself with the special 2020 reporting requirements on the CRA’s website.
Q22 : Where can I obtain additional information regarding the business support measures provided by the Government of Canada?
Here are a few useful links to help you better understand the main support programs put in place by the Government of Canada in response to the COVID-19 global pandemic:
- Canada’s COVID-19 Economic Response Plan
- Canada Emergency Wage Subsidy (CEWS)
- Adapting the Canada Emergency Wage Subsidy to Protect Jobs and Promote Growth
- CRA and COVID-19 – Support for employers
- Canada Emergency Wage Subsidy (CEWS) – Calculate your subsidy amount
- Canada Emergency Wage Subsidy (CEWS) – Application guide
- 10% Temporary Wage Subsidy for Employers
- Glossary on the COVID-19 pandemic
- Fall Economic Statement 2020 – Supporting Canadians and Fighting COVID-19
- Government announces wage subsidy rate increase to 75 per cent
This updated FAQ refers to the latest version of the CEWS and mainly contains information regarding period 5 and subsequent periods. For more details on eligibility criteria and procedures for the first version of the program (for periods 1 to 4), refer to the Government of Canada’s website.
REHIRING OR REACTIVATING AN EMPLOYEE
Reminder of procedures
The government wrappelage subsidies and the gradual revival of the economy may prompt you to rehire your workers. Which is why we thought to remind you of the procedures for rehiring or reactivating your employees from our solutions.
To rehire, follow the steps found in the User Help. Do not forget to enter the date.
You can reactivate your inactive employees from their employee file (HR > Employment profile > Employment and compensation). You simply need to modify the “Availability” field by selecting “Active”.
If you are using our Telephone Payroll services, you can make the changes during your next payroll data entry. However, if you have more than modifications, be sure to send them to us at email@example.com, two business days before your next payroll processing.
Have you thought ahead?
If you caught COVID-19, would you have a backup plan? Apply the following preventive measures to prevent unnecessary problems:
- Ensure that your access codes are valid.
- Have an authorized backup who can access the Nethris Internet Suite and enter employee payroll information so that the payroll can be processed on time. Ensure that their access codes are valid as well.
- Ensure that your backup is also authorized to communicate with Customer Service if needed. Ensure that this person has the mandatory calling code.
Thank you to all entrepreneurs!
Like the Government of Canada, Nethris encourages businesses to keep their employees on the payroll or rehire them if they can afford to do so. An employee represents a significant investment; they must be recruited, welcomed, trained and equipped to contribute to your SME profitability. In our view, your employees are a valuable resource and have the know-how to ensure the success of your activities.
We wish to profess our heartfelt admiration for all the employers contributing to the prosperity of the Canadian economy.
The information provided on this page is intended as a guideline only with the intention of helping our clients in the face of the COVID-19 pandemic. It cannot have the effect of changing or modifying the applicable agreement(s) in effect with our clients, nor shall it be construed as a waiver of any rights or remedies therein.
In the event of a discrepancy between the content of this page and the information provided by official agencies, the latter always takes precedence. Nethris is not responsible for errors and omissions that may be on this page nor for consequences resulting from its use.