How to keep your employees on the payroll - during the COVID-19 Pandemic (CEWS) - Kerr Financial
Accounting & Tax
How to keep your employees on the payroll – during the COVID-19 Pandemic (CEWS)
Category: Accounting & Tax, Financial Planning Tags: Canada Emergency Wage Subsidy, Canadian, CEWS, Covid-19, Employers, Federal Government, small business

Keep your Employees on the Payroll

The federal government responded to the economic fall-out from the COVID-19 crisis with the introduction of the Canada Emergency Wage Subsidy (CEWS).  The objective of the CEWS is to encourage eligible employers to re-hire workers previously laid off as a result of the COVID-19 crisis, help prevent further job losses and better position eligible employers to resume normal operations after the crisis subsides. The CEWS provides eligible Canadian employers whose operations have been affected by the COVID-19 crisis, a subsidy of 75% of the first $58,700 per employee wage for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020. Employee eligibility is based on whether the person is employed in Canada, not where they reside.

Canada Emergency Wage Subsidy (CEWS)

The CEWS seeks to support Canadian employers that experience an eligible reduction in revenues of at least 15% from March 15 to April 11 and 30% from April 12 to June 6 due to the COVID-19 crisis. Eligible revenue generally includes revenue earned in Canada from, selling goods, rendering services and others’ use of your resources. Employers are encouraged to use their normal accounting method when calculating revenue and to use the same approach throughout he processes.

Eligible Employers

The CEWS Wage Subsidy defines eligible employers as:

-individuals (including trusts)

-taxable corporations

-persons that are exempt from corporate tax:

non-profit organizations

agricultural organizations

boards of trade

chambers of commerce

non-profit corporations for scientific research and experimental development

labour organizations or societies

benevolent or fraternal benefit societies or orders

-registered charities

-partnerships consisting of eligible employers

Public institutions such as municipalities, local governments, Crown corporations, public universities, colleges, schools, and hospitals are not eligible for the subsidy.

Eligibility requirements

To be eligible to receive the CEWS you would have to be considered an eligible employer, have experience an eligible reduction in revenue and have had a CRA payroll account on March 15, 2020.

The steps to receive the CEWS

  1. Consult and familiarize yourself thoroughly with the program on the government of Canada website as the program contains a lot of details and record keeping.
  2. Use the online calculator on the government of Canada website to find out how much you are eligible for.
  3. Maintain records of the total compensation paid, total income tax deducted and number of employees paid.
  4. When ready apply through CRA’s My Business Account.
  5. Once you pay your employees you will receive the money to your account by direct deposit or cheque, depending on how you were registered with the CRA.

Next Step

The support offered by the CEWS to eligible employers is one of many initiatives offered by the federal government.  As a next step, you are encouraged to consult with your financial planner in order to determine if you qualify for any additional support programs offered by all levels of all governments.



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