COVID-19 Response Updates - Wage Subsidies, Canada Emergency Business Account, Sales Tax Remittance Payments, and EPL
New information has been released regarding the announcement of the temporary wage subsidies for qualifying businesses. If you would like to read into any of these updates further, please visit the Government of Canada’s website at the following link: https://www.canada.ca/en/department-finance/economic-response-plan.html. Outlined below are some of the most current updates.
Please see the list of essential services as per the government of Alberta at this link: https://www.alberta.ca/essential-services.aspx. We are considered an essential service, but we would like to assure you that either way, we have the ability and configuration to work remotely, and therefore we will still be able to operate as normal.
Wage Subsidies for Employers – There are two separate Temporary Wage Subsidies for Employers, a ten percent (10%) subsidy and a seventy-five percent (75%) subsidy, The Canada Emergency Wage Subsidy. Employers may qualify for one or both programs.
Canada Emergency Business Account (Loans) – Interest-free loans of up to $40,000 will be made available to eligible small businesses and not-for-profits to help cover their operating costs. To qualify, the business must be able to demonstrate they paid between $50,000 to $1,000,000 in total payroll in 2019. Businesses should work with their current financial institutions to apply.
Sales Tax Remittance Payments – Although Goods and Services Tax / Harmonized Sales Tax (GST/HST) remittances have been deferred to June 30th, 2020, returns still need to be processed for the original due date. All your bookkeeping must continue to be up to date.
On March 18th, 2020, the Government of Canada announced a ten percent (10%) Temporary Wage Subsidy for Employers. This allows eligible employers to reduce payroll remittances (Source Deductions) of income tax sent to the Canada Revenue Agency (CRA). Payroll remittance due dates have not been deferred; remittances must continue to be made by the remittance due date.
Eligible employers include Canadian-controlled private corporations, non-profit organizations and registered charities provided the following:
- Have a business number and payroll program account (RP) with the CRA on March 18th, 2020;
- Pay salary, wages, bonuses, and/or other remuneration to at least one employee;
- Taxable capital employed in Canada is less than $15 million.
Calculation of the Temporary Wage Subsidy is 10% of the remuneration paid between March 18th, 2020 and June 19th, 2020 to a maximum of $1,375 per employee. The maximum for each employer is $25,000.
On March 27th, 2020, the Government of Canada announced the Canada Emergency Wage Subsidy for up to seventy-five percent (75%) for eligible employers for up to 12 weeks (March 15th, 2020 to June 6th, 2020). Please find further details at this link: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html. This subsidy must be used only to pay employees, in an effort to reduce layoffs and get people back to work.
Eligible employers for the Canada Emergency Wage Subsidy include:
- Individuals, taxable corporations, partnerships, non-profit organizations, registered charities (Doesn’t include publicly traded companies);
- Employers with a minimum of thirty percent (30%) reduction in revenue as compared to this time last year (for example, if an employer is applying for the subsidy for March 2020, revenue must be at least 30% lower than March of 2019);
- Reduction in revenue is due to COVID-19.
Employers are expected to make the best effort to cover the remaining twenty-five percent (25%) of salaries. Eligible employers will be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency’s (CRA) My Business Account portal as well as a web-based application.
The Canada Emergency Wage Subsidy is considered government assistance and will be included in the employer’s taxable income.
Employment Practices Liability (EPL) Insurance – Please see the attachment if you are interested in learning more about EPL Insurance.
We hope you are all staying safe and well during this time of uncertainty. The King Business Solutions Centre is currently operating within our standard office hours, but our front interior door is locked. You are welcome to drop-off and pick-up from our video monitored front vestibule. We also have a client portal, email, and fax capabilities. Give your bookkeeper a call, we are here to help!