The 75% Wage Subsidy
The 75% Wage Subsidy details were announced today by Finance Minister Bill Morneau. Unfortunately this program is at least 3 to 6 weeks from being operational from today’s date.
The previously announced 10% wage subsidy (which is still available) was actually a discount that eligible employers could take on payroll taxes due to the Canada Revenue Agency (CRA). This new 75% wage subsidy is actually monies that the CRA will pay to eligible employers.
The 75% wage subsidy has the following details:
Open to businesses of any size;
Previous Eligibility Requirements:
Businesses must have lost at least 30% of its gross revenues in comparison to the same month of the prior year (e.g. March 2020 vs. March 2019).
Updated Eligibility Requirements:
Businesses now have the option to use January 2020 and February 2020 as reference points to show a 30% loss of gross revenues in comparison to March 2020; and
Businesses only need to show a loss of 15% of its gross revenues when comparing the past gross revenues to March 2020; since the impact of Covid-19 was felt by businesses from mid-March 2020.
Evidence that employee’s have been paid must be available;
Must be applied for on a monthly basis (for each month the subsidy is being requested); and
The subsidy will apply to the first $58,700 of each employee’s salary and provide up to a maximum of $847 per week.
The full administrative details will follow within the next couple of days.
It is advisable to seek professional advice to understand the tax laws that impact your particular situation, and to guide you through the complexities of Canadian Income taxes.
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