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Canada Emergency Wage Subsidy (CEWS)

How the revenue drop and subsidy rate are calculated

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Revenue drop and subsidy rate calculation for claim periods 5 and later New

For claim periods 5 and later (claims that cover July 5, 2020, and later), there is no minimum revenue drop required to qualify for the subsidy. The rate your revenue has dropped is only used to calculate how much subsidy you receive for these periods.

Calculate your revenue drop online

You can use the online calculator or spreadsheet to find your revenue drop for periods 5 and later while calculating how much subsidy you may receive.

or

Read about the calculation

You can read the in-depth details of how the revenue drop and subsidy rate are calculated for claim periods 5 and later.

Overall subsidy rate

For claim periods 1 to 4, the subsidy calculation was based on a fixed rate of 75%. However, for claim periods 5 and later, the CEWS rate is variable and depends on the amount your revenue dropped. It is made up of two parts.

Overall CEWS rate = base rate + top-up rate

  • Base rate
    The base rate uses your base revenue drop
  • plus Top-up rate
    The top-up rate is available to employers that have experienced a 3-month average revenue drop of more than 50%
  • equals Overall CEWS rate

You can calculate your overall subsidy rate (base and top-up) using the online calculator or spreadsheet.

For periods 5 and 6 only, if your:

  • base revenue drop is at least 30%, and
  • overall subsidy rate is less than 75%
  • you may benefit from using the rules and calculations from period 4 to calculate your subsidy amount.

This is referred to as the “safe harbour” rule. If you use the online calculator or spreadsheet to calculate your subsidy amount, the safe harbour rule is automatically applied if you qualify and it is to your benefit.

You can learn how the subsidy rate is used when calculating your CEWS amount by reading more about how the overall subsidy amount is calculated.

Rounding your rates

The CEWS application accepts rates up to two decimal places. If the rate you calculated has more than two decimal places, you can round up or down to the nearest hundredth (second decimal place). However, you cannot round a rate up to reach a threshold.

For example:

  • If your calculated revenue drop in period 5 is 29.99…%, your rate would be 29.99%. You may not round it up to 30% to qualify for the "safe harbour" rule.
  • If your calculated top-up revenue drop is 69.99…%, you may not round it up to 70% to qualify for the maximum top-up rate.

Base revenue drop calculation

The revenue drop you use to calculate the base subsidy rate is the decline in eligible revenue you experienced when comparing your claim period revenue with your baseline revenue.

Revenue drop (%) = 1 – (Claim period revenue / baseline revenue)

Using the current or prior claim period revenue drop (the “deeming rule” for periods 5 and later)

For claim periods 5 and later, you will calculate two revenue drops and use the higher result in your base rate calculation. If you use the online calculator or spreadsheet to calculate your subsidy amount, both rates will be calculated when you enter your revenues and the higher rate will automatically be applied.

Current period

Revenue drop (%) = 1 – (Claim period revenue divided by baseline revenue)

or

Previous period

Revenue drop (%) = 1 – (Previous claim period revenue divided by previous claim period baseline revenue)

The higher rate that results is the one you will use to calculate your subsidy amount. This is your base revenue drop. You must repeat this calculation and comparison for each claim period.

Baseline revenue and prior reference period options

Your baseline revenue is determined by the prior reference period you choose. It is either:

General prior reference period

the eligible revenue you earned in the corresponding month(s) in 2019

or

Alternative prior reference period

the average of the eligible revenue you earned in January and February, 2020

You must choose one of these prior reference period options and use it when calculating your revenue drop for both the base rate and top-up rate for all claims in periods 5 and later. However, if you used one method for claims you made in periods 1 to 4, you may switch to the other method beginning with your claim in period 5.

Note: If you choose to use the alternative prior reference period (January and February 2020), you need to check the "prior reference period" election box when completing your CEWS application form.

Baseline revenue prior reference period comparison options for claim periods 5 to 9
Claim period General prior reference period
(current or previous)
Alternative prior reference period
(current or previous)
Period 5
  • July 2020 over July 2019
    or
  • June 2020 over June 2019
  • July 2020 over average of January and February 2020
    or
  • June 2020 over average of January and February 2020
Period 6
  • August 2020 over August 2019
    or
  • July 2020 over July 2019
  • August 2020 over average of January and February 2020
    or
  • July 2020 over average of January and February 2020
Period 7
  • September 2020 over September 2019
    or
  • August 2020 over August 2019
  • September 2020 over average of January and February 2020
    or
  • August 2020 over average of January and February 2020
Period 8
  • October 2020 over October 2019
    or
  • September 2020 over September 2019
  • October 2020 over average of January and February 2020
    or
  • September 2020 over average of January and February 2020
Period 9
  • November 2020 over November 2019
    or
  • October 2020 over October 2019
  • November 2020 over average of January and February 2020
    or
  • October 2020 over average of January and February 2020

If you were not operating as a business throughout January and February 2020, read more about how to calculate your baseline revenue for the base revenue drop if you choose the alternative prior reference period.

Examples of revenue drop calculation for claim periods 5 and later

Example: Choosing a revenue comparison option

Poppy’s Doggy Daycare is preparing to claim the subsidy for the first time for period 5.

  • Its monthly eligible revenue in 2020 so far is as follows:
    • January: $11,400
    • February: $13,200
    • March: $14,900
    • April: $12,900
    • May: $8,100
    • June: $8,700
    • July: $10,100
  • For the same months in 2019, its eligible revenue was:
    • January: $14,400
    • February: $16,000
    • March: $16,300
    • April: $16,600
    • May: $9,400
    • June: $10,900
    • July: $11,200

General prior reference period (option 1)

Calculating Poppy’s current period revenue drop:

  • July 2019 eligible revenue: $11,200
  • July 2020 eligible revenue: $10,100
  • Current period revenue drop: 1 - ($10,100 ÷ $11,200) = 9.82%

Calculating Poppy’s previous period revenue drop:

  • June 2019 eligible revenue: $10,900
  • June 2020 eligible revenue: $8,700
  • Previous period revenue drop: 1 - ($8,700 ÷ $10,900) = 20.18%

Poppy’s base revenue drop will be 20.18% if it chooses to use the general prior reference period revenue comparison option for period 5. The base revenue drop is the greater of the current period revenue drop (9.82%) and the previous period revenue drop (20.18%).

and

Alternative prior reference period (option 2)

Calculating Poppy’s average monthly eligible revenue from January and February 2020:

  • January 2020 eligible revenue: $11,400
  • February 2020 eligible revenue: $13,200
  • Average monthly eligible revenue from January and February 2020: ($11,400 + $13,200) ÷ 2 = $12,300

Calculating Poppy’s current period revenue drop:

  • July 2020 eligible revenue: $10,100
  • Average monthly eligible revenue from January and February 2020: $12,300
  • Current period revenue drop: 1 - ($10,100 ÷ $12,300) = 17.89%

Calculating Poppy’s previous period revenue drop

  • June 2020 eligible revenue: $8,700
  • Average monthly eligible revenue from January and February 2020: $12,300
  • Previous period revenue drop: 1 - ($8,700 ÷ $12,300) = 29.27%

Poppy’s base revenue drop will be 29.27% if it chooses to use the alternative prior reference period revenue comparison option for period 5. The base revenue drop is the greater of the current period revenue drop (17.89%) and the previous period revenue drop (29.27%).

The alternative prior reference period (option 2) results in the higher base revenue drop for this claim period.

Note: If it uses the alternative prior reference period for period 5, Poppy’s must use the alternative prior reference period for its revenue comparison for periods 6 to 9 also, even if the general prior reference period revenue comparison option results in the higher base revenue drop for those periods.

Example: Current period's revenue drop is lower than previous period's

Denfield Kitchen is preparing to claim the subsidy for period 6. It uses the alternative prior reference period revenue comparison option.

  • Its monthly eligible revenue in 2020 for the last two months was:
    • July: $63,700
    • August: $76,400
  • Its monthly eligible revenue at the beginning of the year was:
    • January: $74,000
    • February: $80,100

Calculating Denfield Kitchen’s average monthly eligible revenue from January and February 2020:

  • January 2020 eligible revenue: $74,000
  • February 2020 eligible revenue: $80,100
  • Average monthly eligible revenue from January and February 2020: ($74,000 + $80,100) ÷ 2 = $77,050

Current period revenue drop

Calculating Denfield Kitchen’s current period revenue drop

  • August 2020 eligible revenue: $76,400
  • Average monthly eligible revenue from January and February 2020: $77,050
  • Current period revenue drop: 1 - ($76,400 ÷ $77,050) = 0.84%
and

Previous period revenue drop

Calculating Denfield Kitchen’s previous period revenue drop

  • July 2020 eligible revenue: $63,700
  • Average monthly eligible revenue from January and February 2020: $77,050
  • Previous period revenue drop: 1 - ($63,700 ÷ $77,050) = 17.33%

The previous period revenue drop (17.33%) results in a higher base rate for this claim period.

Example: Current period's revenue drop is higher than previous period's

XYZ Inc. is preparing to claim the subsidy for period 6. It uses the general prior reference period revenue comparison option.

  • Its monthly eligible revenue in 2020 for the last two months was:
    • July: $145,900
    • August: $154,500
  • For the same months in 2019, its eligible revenue was:
    • July: $180,900
    • August: $210,200

Current period revenue drop

Calculating XYZ’s current period revenue drop:

  • August 2019 eligible revenue: $210,200
  • August 2020 eligible revenue: $154,500
  • Current period revenue drop: 1 - ($154,500 ÷ $210,200) = 26.50%
and

Previous period revenue drop

Calculating XYZ’s previous period revenue drop:

  • July 2019 eligible revenue: $180,900
  • July 2020 eligible revenue: $145,900
  • Previous period revenue drop: 1 - ($145,900 ÷ $180,900) = 19.35%

The current period revenue drop (26.50%) results in a higher base rate for this claim period.

Base subsidy rate calculation

The base rate is added to the top-up rate to determine the overall subsidy rate for active employees.

The base rate is calculated by multiplying your base revenue drop for the claim period by the factor for the claim period shown in the table below.

If your base revenue drop for a claim period is at least 50%, you will receive the maximum base rate for that claim period. The maximum base rate changes for each claim period.

Base CEWS rate for claim periods 5 to 9
Claim period Revenue drop of 50% or more Revenue drop of less than 50%
Period 5 60% 1.2 x revenue drop
Period 6 60% 1.2 x revenue drop
Period 7 50% 1.0 x revenue drop
Period 8 40% 0.8 x revenue drop
Period 9 20% 0.4 x revenue drop

Top-up revenue drop calculation

The top-up rate applies to eligible employers whose revenue has dropped by more than 50% in a particular period of three months.

The top-up revenue drop is used to calculate the top-up rate. It is the decline in eligible revenue you experienced when comparing the average monthly revenue of the 3 months prior to the claim period with either:

General prior reference period

the same three months in 2019

or

Alternative prior reference period

January and February 2020

You must use the same prior reference period comparison option for the top-up revenue drop that you chose for the base rate revenue drop.

  • if you chose the general prior reference period for the base rate (same month in 2019), you must use the general prior reference period when calculating your top-up revenue drop
  • If you chose the alternative prior reference period when calculating your base rate (average of January and February, 2020), you must use the alternative prior reference period when calculating your top-up revenue drop
Top-up prior reference period comparison options for claim periods 5 to 9
Claim period General prior reference period comparison Alternative prior reference period comparison
Period 5
  • average of April, May, and June 2020
    over
  • average of April, May, and June 2019
  • average of April, May, and June 2020
    over
  • average of January and February 2020
Period 6
  • average of May, June, and July 2020
    over
  • average of May, June, and July 2019
  • average of May, June, and July 2020
    over
  • average of January and February 2020
Period 7
  • average of June, July, and August 2020
    over
  • average of June, July, and August 2019
  • average of June, July, and August 2020
    over
  • average of January and February 2020
Period 8
  • average of July, August, and September 2020
    over
  • average of July, August, and September 2019
  • average of July, August, and September 2020
    over
  • average of January and February 2020
Period 9
  • average of August, September, and October 2020
    over
  • average of August, September, and October 2019
  • average of August, September, and October 2020
    over
  • average of January and February 2020

Top-up rate calculation

The top-up rate is added to the base rate to determine the overall subsidy rate for active employees.

The top-up rate is calculated by subtracting 50% from your top-up revenue drop and multiplying that result by 1.25.

If your top-up revenue drop for a claim period is at least 70%, you will receive the maximum top-up rate of 25% for that claim period. The top-up calculation is the same for each claim period from 5 to 9.

Top-up rate calculation for claim periods 5 to 9
Top-up revenue drop Top-up rate
70% or higher 25%
50.01% to 69.99% 1.25 x (top-up revenue drop - 50%)
50% or lower 0%

Note: You cannot round your rate to reach the 70% maximum top-up.

Example of overall subsidy rate calculation for claim periods 5 and later

Example: Qualifying for CEWS with a partial top-up

Chez Riendeau is a cooking school who saw a significant drop in business as the pandemic began. Although their in-person classes have been cancelled since mid-March, they have managed to continue earning through their popular online courses.

Chez Riendeau is preparing to claim the subsidy for period 6. It uses the alternative prior reference period revenue comparison option.

  • Its monthly eligible revenue in 2020 so far is as follows:
    • January: $82,300
    • February: $81,800
    • March: $54,700
    • April: $32,500
    • May: $35,300
    • June: $39,500
    • July: $42,800
    • August: $40,600
  • Calculating Chez Riendeau’s average monthly eligible revenue from January and February 2020:
    • January 2020 eligible revenue: $82,300
    • February 2020 eligible revenue: $81,800
    • average monthly eligible revenue from January and February 2020: ($82,300 + $81,800) ÷ 2 = $82,050

Current period revenue drop

Calculating Chez Riendeau’s current period revenue drop

  • August 2020 eligible revenue: $40,600
  • average monthly eligible revenue from January and February 2020: $82,050
  • current period revenue drop: 1 - ($40,600 ÷ $82,050) = 50.52%
and

Previous period revenue drop

Calculating Chez Riendeau’s previous period revenue drop

  • July 2020 eligible revenue: $42,800
  • average monthly eligible revenue from January and February 2020: $82,050
  • previous period revenue drop: 1 - ($42,800 ÷ $82,050) = 47.84%

The previous period revenue drop (50.52%) results in a higher base rate.

Because its base revenue drop is at least 50%, it received the maximum base rate for period 6, which is 60%.

Top-up revenue drop

Calculating Chez Riendeau’s average monthly revenue from the 3 months prior to the claim period:

  • May 2020 eligible revenue: $35,300
  • June 2020 eligible revenue: $39,500
  • July 2020 eligible revenue: $42,800
  • average monthly eligible revenue from May, June, and July 2020: ($35,300 + $39,500 + $42,800) ÷ 3 = $39,200

Calculating Chez Riendeau’s top-up revenue drop:

  • average monthly eligible revenue from May, June, and July 2020: $39,200
  • average monthly eligible revenue from January and February 2020: $82,050
  • top-up revenue drop: 1 - ($39,200 ÷ $82,050) = 52.22%

Because Chez Riendeau uses the alternative prior reference period revenue comparison option, its top-up revenue drop is 52.22%, which compares the average monthly eligible revenue of the 3 months prior to the claim period to the average monthly eligible revenue of January and February 2020.

Calculating Chez Riendeau’s top-up rate:

  • top-up revenue drop: 52.22%
  • period 6 top-up rate: 1.25 × (52.22% - 50%) = 2.78%

Calculating Chez Riendeau’s overall CEWS rate:

  • base rate: 60.00%
  • top-up rate: 2.78%
  • period 6 top-up rate: 60.00% + 2.78% = 62.78%

Chez Riendeau is eligible to claim a basic CEWS amount that will be calculated using its overall subsidy rate of 62.78%.

Revenue drop calculation for claim periods 1 to 4

For periods 1 to 4, you must show that your eligible revenue dropped by a minimum amount to qualify for the subsidy. If you meet the minimum revenue drop, the subsidy calculation uses a fixed rate of 75%.

How the revenue drop is calculated for periods 1 to 4

Your revenue drop for a claim period is the decline in eligible revenue you experienced. It’s calculated by comparing your eligible revenue for the claim period month to your eligible revenue from a corresponding previous period (“baseline revenue”).

Math behind the revenue drop calculation

For each claim period, 1 – (A÷B), where:

  • A is your eligible revenue for the claim period, and
  • B is your eligible revenue from a corresponding prior period (baseline revenue).

The result, expressed as a percentage, is your revenue drop.

Your revenue drop can’t be negative. If the result is negative, then your actual revenue drop for the claim period is 0%.

Claim period revenue
Your claim period revenue is the eligible revenue for the month in 2020 specified for that claim period.
Baseline revenue
Your baseline revenue is the eligible revenue for one of two prior period comparison options specified for that claim period.

Revenue drop required to qualify for claim periods 1 to 4

Claim periods and revenue drops for the Canada Emergency Wage Subsidy
Claim period Start and end dates Baseline revenue Claim period revenue Required drop
Period 1 March 15 to April 11, 2020
  • March 2019
    or
  • average of January and February 2020
March 2020 15%
Period 2 April 12 to May 9, 2020
  • April 2019
    or
  • average of January and February 2020
April 2020 30%
Period 3 May 10 to June 6, 2020
  • May 2019
    or
  • average of January and February 2020
May 2020 30%
Period 4 June 7 to July 4, 2020
  • June 2019
    or
  • average of January and February 2020
June 2020 30%

You must choose one of these prior reference period comparison options and use it when calculating your revenue drop for all claims in periods 1 to 4. However, if you use one method for claims you made in periods 1 to 4, you may switch to the other method beginning with your claim in period 5.

If you were not operating as a business throughout January and February 2020, read more about how to calculate your baseline revenue for eligibility purposes if you choose the alternative prior reference period.

Note: If you choose to use the alternative prior reference period (January and February 2020), you need to check the "prior reference period" election box when completing your CEWS application form.

Automatically qualifying for later periods (the “deeming rule” for periods 1 to 4)

For periods 1, 2, and 3, if you determine that you qualify for the subsidy for one claim period, you will automatically qualify for the following claim period. For example, if your revenue drop is over 30% for period 3, you don’t need to re-calculate your drop for period 4 (you are “deemed” to have met this qualification).

Read about how the deeming rule works in claim periods 5 and later

Examples of revenue drop calculation and automatically qualifying for claim periods 1 to 4

Example: Automatically qualifying for a subsequent period

Business "A" eligibility

Period 1: March 15 to April 11 (15% revenue reduction required)
Example 1 - Period 1: March 15 to April 11 (15% revenue reduction required): Revenue
Jan 2020 Feb 2020 Mar 2020 Baseline (compare to Mar 2020)
$100,000 $140,000 $130,000
  • March 2019: $170,000 (23.5% reduction)
  • Jan/Feb 2020 average: $120,000 (0% reduction)

CEWS eligibility: Qualifies for period 1

Baseline chosen: Corresponding month in 2019

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

Period 2: April 12 to May 9 (30% revenue reduction required)
Example 1 - Period 2: April 12 to May 9 (30% revenue reduction required): Revenue
Jan 2020 Feb 2020 April 2020 Baseline (compare to Apr 2020)
$100,000 $140,000 $120,000
  • April 2019: $160,000 (25% reduction)
  • Jan/Feb 2020 average: $120,000 (0% reduction)

CEWS eligibility: Qualifies for period 2

Baseline chosen: Corresponding month in 2019

Although the employer's revenue has not met the 30% reduction for period 2, because they qualified for period 1, they automatically qualify for the following claim period.

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

Period 3: May 10 to June 6 (30% revenue reduction required)
Example 1 - Period 3: May 10 to June 6 (30% revenue reduction required): Revenue
Jan 2020 Feb 2020 May 2020 Baseline (compare to May 2020)
$100,000 $140,000 $130,000
  • May 2019: $190,000 (31.6% reduction)
  • Jan/Feb 2020 average: $120,000 (0% reduction)

CEWS eligibility: Qualifies for period 3

Baseline chosen: Corresponding month in 2019

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

Example: Only qualifying for period 3

Business "B" eligibility

Period 1: March 15 to April 11 (15% revenue reduction required)
Example 2 - Period 1: March 15 to April 11 (15% revenue reduction required): Revenue
Jan 2020 Feb 2020 Mar 2020 Baseline (compare to Mar 2020)
$100,000 $140,000 $105,000
  • March 2019: $115,000 (8.7% reduction)
  • Jan/Feb 2020 average: $120,000 (12.5% reduction)

CEWS eligibility: Does not qualify for period 1

Baseline chosen: Corresponding month in 2019 and average of Jan/Feb are both below 15%.

Period 2: April 12 to May 9 (30% revenue reduction required)
Example 2 - Period 2: April 12 to May 9 (30% revenue reduction required): Revenue
Jan 2020 Feb 2020 April 2020 Baseline (compare to Apr 2020)
$100,000 $140,000 $120,000
  • April 2019: $160,000 (25% reduction)
  • Jan/Feb 2020 average: $120,000 (0% reduction)

CEWS eligibility: Does not qualify for period 2

Baseline chosen: Corresponding month in 2019 and average of Jan/Feb are both below 30%

Period 3: May 10 to June 6 (30% revenue reduction required)
Example 2 - Period 3: May 10 to June 6 (30% revenue reduction required): Revenue
Jan 2020 Feb 2020 May 2020 Baseline (compare to May 2020)
$100,000 $140,000 $120,000
  • May 2019: $180,000 (33.3% reduction)
  • Jan/Feb 2020 average: $120,000 (0% reduction)

CEWS eligibility: Qualifies for period 3

Baseline chosen: Corresponding month in 2019

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

Example: Qualifying for all 3 periods

Business "C" eligibility

Period 1: March 15 to April 11 (15% revenue reduction required)
Example 3 - Period 1: March 15 to April 11 (15% revenue reduction required): Revenue
Jan 2020 Feb 2020 Mar 2020 Baseline (compare to Mar 2020)
$100,000 $140,000 $110,000
  • March 2019: $140,000 (21.4% reduction)
  • Jan/Feb 2020 average: $120,000 (8.3% reduction)

CEWS eligibility: Qualifies for period 1

Baseline chosen: Corresponding month in 2019

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

Period 2: April 12 to May 9 (30% revenue reduction required)
Example 3 - Period 2: April 12 to May 9 (30% revenue reduction required): Revenue
Jan 2020 Feb 2020 April 2020 Baseline (compare to Apr 2020)
$100,000 $140,000 $120,000
  • April 2019: $160,000 (25% reduction)
  • Jan/Feb 2020 average: $120,000 (0% reduction)

CEWS eligibility: Qualifies for period 2

Baseline chosen: Corresponding month in 2019

Although the employer's revenue has not met the 30% reduction for period 2, because they qualified for period 1, they automatically qualify for the following claim period.

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

Period 3: May 10 to June 6 (30% revenue reduction required)
Example 3 - Period 3: May 10 to June 6 (30% revenue reduction required): Revenue
Jan 2020 Feb 2020 May 2020 Baseline (compare to May 2020)
$100,000 $140,000 $100,000
  • May 2019: $150,000 (33.3% reduction)
  • Jan/Feb 2020 average: $120,000 (16.6% reduction)

CEWS eligibility: Qualifies for period 3

Baseline chosen: Corresponding month in 2019

Note: Whatever baseline you initially choose, it must remain the same for claim periods 1 to 4

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