As of March 22, 2020, we have more details on the Temporary Wage Subsidy support program:
- it is available to incorporated small business (ensure you meet eligibility requirements), not for profits and charities but NOT businesses operating as proprietorships or partnerships
- the subsidy is 10% of the gross pay to employees between March 18 and June 20, 2020
- you can deduct the subsidy amount from only the income tax deduction portion source deduction remittance, you cannot reduce the CPP or EI amounts
- you may start deducting on your first remittance that includes March 18 in the pay period. For example, if you are a monthly remitter, you may deduct on your April 15 remittance but only on pay from March 18 or later
- the subsidy will be taxable, ie included in income of the business for tax purposes
- there is no form for the calculation being provided by the government. There are maximums for each employee and for the employer as a whole. It must be calculated and tracked manually
- businesses will be able to apply for the subsidy later so if you aren’t comfortable doing the calculation to stay within the maximums or how to deduct on your remittance you will be able to apply later
- a reporting form will be required later in the year
These are the broad strokes of the program. See the link below for all the details.
If you have any questions, please do not hesitate to ask. If you need help calculating the subsidy, I will be working on a tool to help that I will share free of charge. Connect with us by email hello@aspirecpa.ca
Get our weekly newsletter straight to your inbox -> eepurl.com/gDYb5b
