Temporary Wage Subsidy – Updated March 25, 2020



  • This measure provides eligible employers with a temporary wage subsidy for a period of three months;
  • The subsidy is to be 10% of remuneration paid during that period, up to certain per employee and per employer maximums;
  • Businesses can benefit immediately from this support by reducing their remittances of income tax withheld from their employees’ remuneration;
  • Remittances for CPP and EI cannot be offset by the subsidy.


  • The employer must meet three criteria:
    • employ one or more individuals in Canada (“eligible employees”);
    • be registered with a business number and a payroll remittance account on March 18, 2020; and,
    • be any of the following:
      • a non-profit organization (exempt from income tax);
      • a registered charity;
      • most Canadian-controlled private corporations (CCPCs);
        • Eligibility requires that the CCPC had a business limit, for purposes of the small business deduction, greater than nil for its most recent tax year ended prior to March 18, 2020;
        • Reduction to the business limit caused by passive income is not considered;
        • A CCPC which had no business limit for other reasons (please check with us for this exception) would not qualify.
      • an individual (this means a proprietorship);
        • the proprietor themselves are NOT eligible; or
      • a partnership;
        • the partners themselves (if individuals) are NOT eligible


  • The subsidy will be equal to the least of three amounts, as follows:
    • a fixed maximum for each employer of $25,000;
      • CRA has indicated that this amount is per employer, and is not required to be shared between related or associated employers;
    • a fixed percentage, being 10%, of remuneration paid to eligible employees during the period from March 18, 2020 to June 19, 2020; or,
    • the number of eligible employees employed during the period from March 18, 2020 to June 19, 2020, multiplied by a fixed amount, $1,375.
  • To get the maximum benefit of $25,000, the employer must have more than 18 employees with total wages no less than $250,000 during the period.

Application process

  • No formal application process has been released;
  • Source deduction remittances for income tax, but not for CPP or EI, can be reduced for the available subsidy, providing an immediate cash flow benefit to the employer;
  • Presumably, there will be an eventual requirement to account for the subsidy claimed, possibly when T4 slips are prepared and filed in early 2021 – no additional filings have been implemented to date.

Other Notes

  • The legislation does not provide any exclusion for owners of the employer or persons related to the employer, so their remuneration should be eligible.


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