A Bookkeeper’s Perspective
When the coronavirus pandemic hit Canada in early 2020, it was nearly impossible to fathom the toll it would take on Canadian businesses. At Source Online Bookkeeping, it has been difficult to see the impact of COVID-19 on our business community. However, since the introduction of Canada’s Emergency Wage Subsidy program on March 27th, 2020, we’ve had the enormous pleasure of helping many small businesses find effective ways to navigate the global pandemic financially.
We’ve also learned that applying for the Canadian Emergency Wage Subsidy (CEWS) isn’t a straightforward process for many business owners. We’ve met several clients in recent months that are unsure how to access subsidy relief and are at risk of missing out on crucial financial support.
In this article, we’re sharing our expert bookkeeping tips that Canadian small business owners can use to navigate COVID-19 wage subsidy benefits.
What is CEWS?
CEWS stands for the Canadian Emergency Wage Subsidy. It is a federal program released in March of 2020 to help employers retain employees during COVID-19 pandemic restrictions. As of October 25th, 2020, over 1.4 million applications have been approved, with $45.3 billion being paid to Canadian employers by the federal government.
How Long Will CEWS Be Available?
CEWS was initially designed to be in place until June of 2020. As the coronavirus crisis continues to persist and negatively impact Canada’s economy, CEWS has been extended. As of October 14th, 2020, CEWS is expected to be in effect until June 2021.
Who Qualifies For the Emergency Wage Subsidy?
All eligible employers that have experienced a significant loss of revenue due to COVID-19 during the program’s claim periods, and meet the program’s eligible employer criteria, should apply for wage subsidy relief.
An employer is deemed eligible if they meet one or more of the following criteria:
- Must have had a registered payroll account with the CRA (Canadian Revenue Agency) on or before March 15th, 2020
- Sole proprietorship, such as a small business owner
- A taxable corporation
- A tax-exempt organization, including registered charities and non-profit organizations.
- Certain indigenous government-owned corporations.
- Satisfy the conditions of the Revenue Reduction Test
What Benefits Can CEWS Provide Qualifying Employers?
CEWS has varying options designed to help Canadian businesses through the current pandemic. Depending on how hard the company has been affected economically since March will determine the benefit amount the company may qualify for. The two main subsidy benefits include base subsidy allotments and top-up.
CEWS base subsidy rate is dependent on the level at which COVID-19 has impacted the business, and the time frame that revenue loss was experienced. The amount you get is per employee.
Employers that have been hit incredibly hard by the COVID-19 crisis may qualify for additional wage subsidy benefits in addition to the base subsidy amount. To be eligible for top-up benefits, your revenue must have dropped more than 50%.
The CEWS Wage Subsidy Application Process
To apply for the emergency wage subsidy, first, ensure your company meets the program’s criteria of an eligible employer. We have outlined the requirements for you in the section above. Once you’ve determined that your business may be eligible, it’s time to start the application process.
Inform Your Bookkeeping Firm You’d Like to Apply for CEWS
Let your bookkeeping service provider know you’re interested in applying for the CEWS benefit. Ask them if they’re familiar with the program and find out if they’re up-to-date with CEWS most recent developments. If your bookkeeping firm already handles payroll duties for your company, they should be able to complete most of the application process for you easily.
If your bookkeeper hasn’t managed the organization’s payroll before, they may need the following information from you before starting the application process.
- Payroll Account number
- Payroll web access code
- Number of employees
- Payroll information
If you don’t employ professional bookkeeping services, you can still complete a CEWS application independently. Just gather the above information and then access the application found on the CRA’s My Business Account online portal. If you find the application process difficult or daunting, seek the advice of a bookkeeping firm that’s right for you.
Need More Help With Your CEWS Application? Connect with Source Online Bookkeeping
The Source Online team has qualified members dedicated to helping small business owners with their emergency wage subsidy applications. For more information on our bookkeeping services, including CEWS application inquiries, please browse our website. We’re happy to answer any questions you may have and help you with your business’ bookkeeping needs.