For eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark. How CRA would determine a reasonable benchmark is very unclear.
Amount of Subsidy
The subsidy amount for a given employee on eligible remuneration paid between March 15 and June 6, 2020 would be the greater of:
Further guidance with respect to how to define pre-crisis weekly remuneration for a given employee will be provided in the coming days. Without this clarification, a calculation cannot be made.
- 75 per cent 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 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
In effect, employers may be eligible for a subsidy of up to 100 per cent of the first 75 per cent
of pre-crisis wages or salaries of existing employees. These employers would be expected where possible to maintain existing employees’ pre-crisis employment earnings.
Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new
Eligible remuneration may include salary, wages, and other remuneration.
These are amounts for which employers would generally be required to withhold or deduct amounts to remit to the Receiver General on account of the employee’s income tax obligation.
However, it does not include severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.
Non Arm’s Length Employees
A special rule will apply to employees that do not deal at arm’s length with the employer. The subsidy amount for such employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration. That is, a non arm’s length employee cannot increase their salary after March 15, 2020 to maximize the benefit. The entitlement will be based on what the non-arm’s length employee was earning before March 15th