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  • Writer's pictureSumma MG

Canada Emergency Wage Subsidy (CEWS)

The CEWS provides a 75% wage subsidy for eligible employers for up to 12 weeks, retroactive to March 15, 2020. Eligible Employers:


Taxable corporations

Non-profit organizations and charities

Partnerships consisting of eligible employers

Those that see a 15% drop in revenue in March and 30% for April and May

Calculating Revenues:

Calculated using the employer's normal accounting method

Excludes revenue from extraordinary items and amounts on account of capital

Option to calculate under the accrual method or cash method, not a combination of both

Once selected employers must continue to use this calculation method

Affiliated groups are able to compute revenue on a consolidated basis

Revenue in Canada earned from arms-length sources

Amount of Wage Subsidy

The subsidy amount for a given employee on eligible remuneration paid for the period between March 15 and June 6, 2020 is the greater of:

75% of the amount of remuneration paid, up to a maximum benefit of $847 per week; and

the amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of the employee's pre-crisis weekly remuneration, whichever is less.

Employers are expected, where possible to maintain existing employees' pre-crisis employment earnings.

Pre-Crisis Remuneration

Based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration.

Eligible Remuneration

May include salary, wages, and other remuneration like taxable benefits.

These are amounts for which employers are generally required to withhold or deduct amounts to remit to the Receiver General.

Does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.

No overall limit on subsidy

Refund for Certain Payroll Contributions

100% refund for employer-paid contributions to Employment Insurance and the Canada Pension Plan

Refund covers eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees.

The refund is not available for eligible employees that are on leave with pay for only a portion of a week.

Employers are required to continue to collect and remit employer and employee contributions to each program as usual.

Eligible employers apply for a refund at the same time that they apply for the CEWS.

Eligible Periods

Eligibility is determined by the change in an eligible employer's monthly revenues, year-over-year, for the calendar month in which the period began.

All employers are allowed to calculate their change in revenue using an alternative benchmark to determine their eligibility.

This provides flexibility to employers including high-growth firms, sectors that faced difficulties in 2019, non-profits and charities, and employers established after February 2019.

Employers are allowed to compare their revenue using an average of their revenue earned in January and February 2020 or general year-over-year approach.

You must use the same approach for the duration of the program.

Once an employer is found eligible for a specific period, the employer automatically qualifies for the next period.

The amount of wage subsidy received by the employer in a given month is ignored for the purpose of measuring year-over-year changes in monthly revenues.

Eligible Employees

Employed in Canada.

Eligibility for the CEWS of an employee's remuneration is available to employees

Employees who have been without remuneration for 14 or more consecutive days are not eligible

This rule replaces the previously announced restriction that an employer would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit.


Apply through Canada Revenue Agency's My Business Account portal.

Employers will need to keep records demonstrating their reduction in arm's-length revenues and remuneration paid to employees.

More details about the application process will be made available shortly.

Interaction with 10% Wage Subsidy

For employers that are eligible for both the CEWS and the 10% wage subsidy for a period, any benefit from the 10% wage subsidy for remuneration paid in a specific period generally reduces the amount available to be claimed under the CEWS in that same period.

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