3 thing you need to know when taking advantage of the Temporary Wages Subsidy for Employers:
Posted on3 thing you need to know to take advantage of the Temporary Wages Subsidy for Employers:
1) To take advantage of this reduce your payroll remittances:
a. To take advantage you will reduce the income tax portion of your payroll remittance by 10% of the gross pay to each employee.
b. You must still pay the CPP and EI portion of your payroll remittance. You cannot reduce this potion to take advantage of the benefit.
c. If your subsidy is more that then total income tax you deducted from employee pay you would just extend the period in which you reduce your remittances past your July remittance.
2) There are limits:
a. The subsidy tops out at $1,375 per employee for the time period March 18, to Jun 20, 2020. This means that should an employee earn over $13,750 during this period the additional income they earn will not be subsidized.
b. Earnings does not just mean salary. The subsidy includes wages, bonuses and other types of remuneration.
c. The maximum per business if $25,000. If you have multiple business associated for tax purposes your can utilize up to $25,000 per business if that business pays wages and salaries employees.
3) If you have a third-party payroll provider where you would be paying full source remittances all is not lost.
a. There are ways to collect this subsidy outside of payroll remittance
b. You must still have workers during subsidy period the period and keep records of you’re the amount you paid out.
c. You then get the subsidy at the end of the year or have them reduce your next year’s remittance.
Included is the link to all the frequently asked questions answered by the CRA. As always please feel free to reach out to us with any questions/concerns you may have.
https://www.colbysteckly.ca/contact/ We are here to support you during these uncertain times.
https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html