The Government of Canada has created a three-month measure called the "Temporary 10% Wage Subsidy" to reduce the amount of the payroll deduction required to be remitted to the Canada Revenue Agency ("CRA"). The Temporary 10% Wage Subsidy is equal to 10% of the renumeration that an eligible employer pays from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer. Eligible employers are:
- are a(n):
- individual (excluding trusts),
- partnership,
- non-profit organization,
- registered charity, or
- Canadian-controlled private corporation (including a cooperative corporation);
- have an existing business number and payroll program account with the CRA on March 18, 2020; and
- pay salary, wages, bonuses, or other remuneration to an eligible employee.
Partnerships may be eligible for the subsidy under certain circumstances, including if their members consist exclusively of individuals.
Employers do not have to apply for the Temporary 10% Wage Subsidy. They will deduct typical deductions in the normal course and then calculate the subsidy when they remit those deductions to the CRA. At that point in time, the subsidy will be calculated and be applied to reduce the amount of payroll remittance of federal, provincial or territorial income tax payable to the CRA.
More information is available here.
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