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Updates to Emergency Wage Subsidy - Spring & Summer 2021

Covid Support Programs - Federal

Canada Emergency Wage Subsidy

As of March 2021 the Canadian government has extended the CEWS (Canada Emergency Wage Subsidy) till June 5, 2021 (Period 16).

In the latest Budget proposal on April 19th, they report a plan to extend the subsidy until September 25, 2021.

However, the subsidy rate may begin to decrease beginning July 4, 2021.

Read Budget Line Here.

The current maximum wage subsidy rate for active employees is still at 75%. The revenue drop will stay the same as previous claim periods and the maximum subsidy amount for each employee on leave with pay remains the same at $595. You may now use a new pre-crisis pay period when calculating an employee’s pre-crisis pay.

Please note that Periods 1-8 are now closed, and you cannot submit for those periods. It is in your best interest to get caught up on your submissions, so you do not miss out on any subsidy for your payroll. 

The wage subsidy does not renew automatically. Each period, you must authorize that you’re eligible and calculate your amount according to that period’s rules before you apply. 

There are required revenue drops to qualify as well as top up amounts based on the revenue drop as well. Example, Period 1 had a revenue drop of 15% to qualify and then Periods 2-4 had a required drop of 30% to qualify and top up rates only came into effect if your revenue drop was greater than 50%. You can compare your revenue drop by either the corresponding month in the previous year, (General Prior Reference Period) or the average of the eligible revenue you earned in January & February 2020 (Alternative prior reference period). You must continue with the same reference period going forward.

CRA has provided a calculator to help simplify the calculations for the claims for each period. You can access that calculator here https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html. Once you are done, you can take the numbers provided by the calculator and put them into your application that you can find in your My Business Account on CRA’s website under payroll.

For more information on this program, please go to https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-apply-guide.html


Canadian Income TaxSarah QuealeSynergy Tax & Business Solutions