The Canada Emergency Wage Subsidy (CEWS) has been underutilized and is a great option for both organizations and employees, as it directly impacts profitability and allows organizations to retain more staff.
CEWS allows Canadian employers who have seen a drop in revenue due to the COVID-19 pandemic, to apply for subsidy to cover a portion of employee’s wages. This subsidy will enable employers to re-hire workers, help prevent further job losses, and ease back into normal operations.
Changes to the rates and top-up calculations have been changed to include the following:
Revenue drop of 70% or more : Base rate 40% plus top-up rate 25%
Revenue drop of 50% to 69.99% : Base rate 40% plus top-up rate 1.25 x (revenue drop – 50%)
Revenue drop of 0% to 49.99% : Base rate 0.8 x revenue drop plus top-up rate 0%
Changes to CEWS as of November 19, 2020 (Bill C-9):
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- the subsidy is extended to June 2021
- the maximum subsidy rate for periods 8 to 10 will remain at 65% (40% base rate + 25% top-up)
- beginning in period 8, the top-up rate and base rate are is now calculated using the same one-month revenue drop
- for periods 8 to 10, use the new top-up calculation or the previous 3-month average drop, whichever works in your favour
- the deadline to apply is January 31, 2021, or 180 days after the end of the claim period, whichever comes later
- starting in period 9, the calculation for employees on leave with pay now aligns better with EI benefits
- you can now calculate pre-crisis pay (baseline remuneration) for employees who were on certain kinds of leave, retroactive to period 5
- the Canada Emergency Rent Subsidy (CERS)has been introduced for businesses, non-profits, and charities
Visit the Government of Canada website for full details.
