How to Apply for the 75% Canadian Emergency Wage Subsidy (CEWS)

How to Apply for CEWS

The Canadian Emergency Wage Subsidy (CEWS) is a 75% wage subsidy that the Government of Canada is offering to eligible businesses that have been affected by COVID-19. This article will cover in detail how to apply for the CEWS.

Scroll to the bottom where we’ve also provided below a Google Sheet and accompanying video tutorial that you can use to perform the required calculations.

Steps to apply for CEWS:

1. Determine if eligible for the subsidy - Determine if your business is eligible for the CEWS
2. Determine eligible employees - Determine which employees are eligible for the CEWS.
3. Calculate subsidy amount - Calculate how much your wage subsidy may be.
4. Apply for the wage subsidy - Use the information in steps 1-3 to apply for the wage subsidy.

We will dive into each of these steps in detail.

1. Determine if Your Business is Eligible for CEWS

There are three criteria that all must be met for a business to be eligible for the subsidy.

1. CRA Payroll Account - The organization must have had a CRA payroll account on March 15, 2020
2. Eligible employer - It must be classified aseligible employer
3. Eligible Reduction in revenue - It must have experienced an eligible reduction in revenue

Have a CRA Payroll Account on March 15, 2020

The business must also have had a payroll number on file with CRA on March 15, 2020. This looks like a nine digit business number followed by RP.

More information on what a payroll program account is can be found here.

Eligible Employers

Whether or not your business is an eligible employer comes down to what type of organization or entity it is. Most small businesses in Canada will qualify as eligible employees.

Eligible employers include:

• Individuals (AKA self-employed / sole proprietors)
• Taxable corporations (incorporated businesses)
• Persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:
• 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 that are made up of eligible employers (see the rest of the list above for “eligible employers”)

More info on this can be found on the Government of Canada CEWS webpage linked here.

Eligible Reduction in Revenue

The second component is that the business must have experienced an eligible reduction in revenue when compared to a “baseline revenue period”.

• March 2020’s revenue must have decreased by at least 15%
• April 2020’s revenue must have decreased by at least 30%
• May 2020’s revenue must have decreased by at least 30%

To determine if a business has experienced an eligible reduction in revenue it must compare monthly revenue in the current year to a baseline revenue period. The baseline revenue period can be either:

• The corresponding month in 2019, or
• The average revenue earned in January and February 2020 (Jan 2020 + Feb 2020 divided by 2)

For example, if you were comparing the business’ March 2020 revenue to a baseline revenue period, you could either:

• Compare it to March 2019’s revenue, or
• Compare it to the average revenue earned in January and February 2020.

The following table shows what options you have to compare current monthly revenue to baseline revenue periods.

Further details on this can be found on the Government of Canada’s CEWS page linked here.

2. Determine Your Eligible Employees

Eligible employees:

1. Must have been employed during the claim period - Eligible employees are individuals that are employed by your business in Canada during the claim period (see the above table for claim periods).
2. Must not have been without pay for 14 days during the claim period - If there was a period of 14 or more consecutive days during a claim period where the employee did not receive pay, then they are not eligible.

You can find additional details on eligible employees on the CEWS webpage linked here.

3. Calculate the Subsidy Amount

The wage subsidy amount that you will receive is calculated based on:

• The number and type of eligible employees that you have, and
• The amount and type of pay they received

This all gets fairly confusing so we’ve included a video tutorial below that accompanies the calculation spreadsheet.

The general idea is that the wage subsidy received will be 75% of eligible remuneration actually paid, up to a maximum of $847/week per employee.

This online calculator can be used to calculate the amount of the wage subsidy. We go into detail in the video tutorial below on how to use the calculator.

There are some restrictions to this for employees who earned less than $1,129.33 per week as well as employees who are not dealing at arm’s length (family members of the employer for example).

Employees Who Earn $1,129/week or More

The maximum subsidy is $847 per week. For employees earning $1,129.33 (or more) for each week in the claim period, the maximum weekly subsidy is ($1,129.33 x 75% = $847).

Non-arm’s Length Employees

The maximum weekly subsidy for these employees is the lesser of:

• 100% of their weekly gross pay during the claim period
• 75% of their average weekly pay from the period January 1 to March 15, 2020; or
• The maximum subsidy of $847 ($1,129.33 x 75% = $847)

Employees Earning Less than $1,129.33 per Week

For employees earning less than $1,129.33 per week, the subsidy is equal to 75% of their weekly gross pay during the claim period.

4. Apply for the Wage Subsidy

Once you have the information from steps 1-3, it’s time to apply for the wage subsidy.

There are a couple of ways to apply for the subsidy:

1. CRA My Business Account - for business owners
2. CRA Represent a Client - for authorized representatives
3. CRA Web Forms for business owners who do not have My Business Account set up. Requires a web access code.

Choose the method that applies to you.

Information to Have On-hand.

• Your payroll account number
• Your payroll web access code if you’re using “CRA Web Forms” to apply
• The period covered by the claim (Mar 15 to Apr 11, Apr 12 to May 9, or May 10 to Jun 6)

Direct Deposit

It is very helpful to make sure that your business details and direct deposit information for payroll accounts are up to date. This will ensure that payments can be processed quickly. More info on setting up direct deposit can be found here.

Instructions on how to apply

Here are the steps that will apply to most employers. There are some circumstances that require additional calculations and steps, but these steps should work for the majority of employers.

1. Payroll Account Number - Enter your payroll account number.
2. Web Access Code (if applicable) - If you’re using CRA Web Forms, you’ll need to enter your web access code. If you don’t have one, you can obtain it via this service or by calling 1-800-959-5525.
3. Claim Period - Choose the claim period in question: Mar 15 to Apr 11 / Apr 12 to May 9 / May 10 to Jun 6
4. Line A - Number of Eligible Employees - Enter the number of eligible employees that you had on payroll during the period covered by the claim.
5. Line B - Total Eligible Remuneration Paid - Enter the total eligible remuneration paid during the period. This includes salary, wages, fees, commissions or other amounts for services rendered.
6. Line C - Basic Canada Emergency Wage Subsidy - Enter the amount of wage subsidy that you calculated in the previous section.
7. Line D - EI and QPIP Paid to Furloughed Employees - If you have furloughed employees (on leave with full or partial pay), enter the employer’s portion of EI or QPIP that was paid for the relevant period. You will need to get this directly from your payroll data or see “Step 3 Premiums and Contributions” on the online calculator to get help with this figure. This step only applies if you have furloughed employees.
8. Line E - CPP and QPP Paid to Furloughed Employees - If you have furloughed employees (on leave with full or partial pay), enter the employer’s portion of CPP or QPP that was paid for the relevant period. You will need to get this directly from your payroll data or see “Step 3 Premiums and Contributions” on the online calculator to get help with this figure. This step only applies if you have furloughed employees.
9. Line F - 10% Temporary Wage Subsidy Reduction - If you have claimed the 10% temporary wage subsidy for employers, enter the amount of the 10% wage subsidy that you received or will receive for this period. Enter $0 if not applicable.
10. Line G - Amount Received under ESDC Work Sharing Benefit - If you participated in the ESDC Work Sharing Benefit program, enter the total amount received by your eligible employees during the claim period. Enter $0 if not applicable. This step only applies to those who participated in the ESDC work sharing program.
11. Line H - Canada Emergency Wage Subsidy - Line H will calculate the CEWS amount that you can receive once you click “Next”.
12. Attestation - The last step is to complete and submit the attestation stating that the information included in the application is true and complete to the best of your knowledge. If you’re the business owner, complete and submit the “Attestation for Business owners”

If everything goes smoothly and you’ve set up direct deposit, the funds should be received within 10 business days.

Video Tutorial for CEWS Application

We’ve prepared a Google Sheet and a video tutorial that you can use to help complete the CEWS application.

1. Go to the Google Sheet linked here
2. Copy the Google Sheet by clicking the “File” menu, then “Make a copy”
3. OR if you prefer Excel, Download the Google Sheet as an Excel file by clicking the “File” menu, then “Download”, then “Microsoft Excel”
4. Follow along with Joe on the tutorial video above and/or with the instructions on the form.