Covid-19 10% Temporary Wage Subsidy
On March 18, 2020, the Government of Canada announced a 10% wage subsidy for eligible small businesses, up to a maximum of $1,375 per employee and $25,000 per employer. The subsidy is applied in form of a reduction of remittances on payrolls processed between March 18, 2020 to June 19, 2020. Please visit this page of CRA's website to find out if your company's eligible for the TWS. .
Applying the TWS to your Knit profile:
- Open Company > Payroll Details
- Underneath your company's CRA Payroll Number & Remittance schedule, you will see COVID 19 Temporary Wage Subsidy with a checkbox beside
- If you are eligible for this Wage subsidy, check off the box COVID 19 Temporary Wage Subsidy. The Temporary Wage Subsidy Eligibility window will open with this message:
The Temporary Wage Subsidy for Employers is limited to the eligible employers listed below.You are an eligible employer if you:
- are a non-profit organization, registered charity, or a Canadian-controlled private corporation (CCPC);
- have 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.
Note: CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year, calculated on an associated group basis, is less than $15 million. Sole proprietor/partnerships are not eligible for this subsidy
- After you have confirmed that your company is eligible and you have read the message listed above, check off the box beside the following message:
I attest that I am the authorized signing officer of <company name>, <company name> fulfils the requirements to be eligible for the Temporary Wage Subsidy and will be fully responsible for any penalties that occur if <company name> is ineligible for the subsidy.
- Select Save, you will then be prompted with the following message:
Are you sure <company name> is eligible? This option is not reversible once confirmed.*
(Note The 10% Wage subsidy tax setting is irreversible and cannot be removed from your company's profile; removing the subsidy tax setting after remittances have been reduced could result in penalties from the CRA)
Select Ok and the wage subsidy will be applied.
Carrying forward the 10% wage subsidy
If you started applying the wage subsidy mid-way through the subsidy eligibility period, you can make a request to carry forward the 10% wage subsidy on past payrolls to future payroll runs. To make this request, send an email to firstname.lastname@example.org with the following information:
- Client name
- Payroll ID
- Pay date
If you are an accounting firm with several clients, please send a list of payroll IDs in a spreadsheet that includes the payroll ID, company name and paydate. Once we have that information, our team can take the amount of eligible subsidy from that payroll and apply it to future payroll runs
To find out the amount of subsidy that has been applied to each employee's salary:
- Ooen Reports > Payroll Reports > Employee Report Per Payroll
- Select the employee's name from the drop-down list
- Enter the date range and select Submit
- The paydates that were processed during the date range you have selected will appear, the Temporart Wage Subsidy amount applied to each of the employee's payrolls will be listed in the last column on the right
Frequently Asked Questions
Q: What is the Temporary Wage Subsidy for Employers?
A: On March 18, 2020 the Canadian Federal Government announced the Temporary Wage Subsidy for Employers program. Eligible employers may reduce their remittance payments to the CRA for remuneration paid to their employees between March 18, 2020 and June 20, 2020.
Q: How do I know if my company is eligible?
A: Please visit this page of CRA's website to find out if your company's eligible for this subsidy
Q: What about the Canadian Emergency Wage Subsidy? If I qualify for both can I receive both subsidies?
A: On March 25, 2020, the COVID-19 Emergency Response Act, which included the implementation of a temporary 10% subsidy. For employers that are eligible for both the CEWS and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period generally reduces the amount available to be claimed under the CEWS in that same period.
Please note that the 10% Wage subsidy tax setting is irreversible and cannot be removed from your company's profile; removing the subsidy tax setting after remittances have been reduced could result in penalties from the CRA.
Q: Will Knit automatically reduce remittances for me?
A: If you activate the feature, the subsidy will automatically be calculated on each subsequent pay run. If you reach the subsidy's limits (reach the employer/employee maximum or reach the end of the date period covered), calculations will automatically be adjusted and stopped.
Q: I have the Covid-19 Wage subsidy tax setting applied to my company's profile. I ran a payroll run and there was no wage subsidy applied, why?
The 10% subsidy is applied in the form of a reduction in a company's remittances. If there are not enough Provincial/Federal taxes to cover 10% of the payroll's total wages paid, no subsidy will be applied. The eligible amount of subsidy will be applied to future payroll runs until the company reaches the per employee/company maximum.
Q: What if my business is closed or I don't pay staff during this period?
A: You are not eligible for this subsidy If you did not pay remuneration to an employee during the eligibility period.
Q: Where can I see the total subsidy amount applied to my payroll run?
A: You can see the total wage subsidy applied to a payroll run in Knit on the Review Payroll page under the What gets Taxed and Debited section.
Q: What do I have to do after the eligibility period concludes on June 19th?
A: There's no action on your end, the wage subsidy is currently limited to the period as per CRA on the Knit platform.