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Applications for the Canada Emergency Wage Subsidy are expected to be available starting April 27, 2020, with the first payments beginning May 6th and 7th.

We have created this guide to help you through the application process.

Overview

This temporary wage subsidy is to provide an amount to employers equal to 75% of employees’ remuneration paid, up to a maximum of $847 per week per employee, from March 15, 2020, to June 6, 2020, for up to twelve weeks.  You can read more about the details of the program here.

The Highlights

  • All applications will be made through the My Business Account portal, though a representative can complete the application on your behalf as well.
  • Applications will open on April 27th, 2020 but there is no need to rush, all applications received through May 4th will be batched and approved on May 5th
  • Funds are expected on May 6th and 7th.

The Application Process

  • The CEWS website will walk you through the series of steps required to apply. You can start here.
  • Confirm you are an eligible employer, have met the revenue test and have eligible employees.
  • Determine the baseline remuneration to each employee. This is the average weekly earnings paid to each employee from January 1, 2020, through March 15, 2020.  If your payroll is monthly or semi-monthly you will need to convert it to weekly for the application.
  • Calculate your subsidy amount by using CRA’s spreadsheet which you can download in step 2b here
    • The spreadsheet will require you to have information about the baseline remuneration as well as weekly pay for the application period for each employee. Make sure you have access to the payroll details and reports before you begin.  Depending on the number of employees you have, this may take a little time.
    • When completed, be sure to save a copy so that you have the employee names and baseline completed for the next application period.
  • Use the numbers from the spreadsheet to complete the remaining steps in the calculation.
  • If you have furloughed employees, you are able to claim a 100% subsidy for the employer portion of CPP and EI that was paid. This goes into step 3.  If not, enter zero.
  • If you claimed the 10% wage subsidy on any previous source deductions remittance or are participating in a work-sharing program, these amounts are entered in step 4.
  • Finally, click “Calculate your total wage subsidy” to see the results. This will bring up a summary of the calculation which you will need to print/save for the actual application.

Once applications, open, all of this information will be needed to apply.  We also expect that CRA will want to audit certain claims in the future.  It would be best to keep copies of ALL of your calculations, reports and information used to apply for each period.  Audits likely won’t start for at least a year, and by then many of the details will be long forgotten.

The approval process is expected to be automated based on a check of calculations and inputs made, however, CRA is suggesting about 10% of applications will not be automatically approved due to inconsistency with current tax information or application errors.  In those circumstances, 3,000 CRA auditors have been allocated to manually review and approve claims.  The expectation is that these approvals will still be done within the original timeline to allow funds to flow to applications on May 6th and 7th.

Approximately 2,000 call centre agents have also been brought on to assist those completing the applications, but you should expect the phone lines to be very busy and waits to be quite long.  It would be best to work through the preliminary calculations as soon as possible to be ready to apply on April 27th.

CRA is aware that some people may end up with errors in their applications.  There will be a process to “fix” and repay overclaimed amounts however any fraudulent claims will be dealt with severely including full repayment with interest, penalties and the potential for incarceration.   

Something to Note

  • Automatic verification will switch to manual verification if payroll information is substantially different from what the CRA has on file for other periods.
  • Manual verification kicks in for companies with revenue over $250 million.
  • The CRA assumes 10% of applicants will end up with manual verification for one reason or another. and large claims would require manual verification – no definition of “large” provided has been provided at this moment.
  • The application window will open at 6 a.m. ET on Monday, however, businesses need not rush to apply. Applications will not be processed on a first-come, first-served basis. Instead, all applications received from April 27 to May 3 will be batch-processed at the same time on May 4.

To Summarize:

Beginning April 27, applications will be open for the Canada Emergency Wage Subsidy.

To apply:

  • Most businesses may apply using My Business Account.
  • If you represent a business, you may apply using Represent a Client.
  • Alternatively, you may apply using a separate online application form (available April 27).

The CEWS will be processed at the payroll program account level, so you will have to file a separate application for each RP account.