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Canada Emergency Wage Subsidy (CEWS)

What the changes are

Calculation details for claim periods 11 to 13 are now available.

January 2021 changes

Changes to CEWS as of January 6, 2021:

  • details for claim periods 11 to 13 (December 20, 2020, to March 13, 2021):
    • the maximum top-up subsidy rate is 35%
    • the maximum subsidy amount for employees on leave with pay is $595
    • the base revenue drop comparison months for period 11 will be the same as period 10
November 2020 changes

Changes to CEWS as of November 19, 2020 (Bill C-9):

  • the subsidy is extended to June 2021
  • the maximum subsidy rate for periods 8 to 10 will remain at 65% (40% base rate + 25% top-up)
  • beginning in period 8, the top-up rate and base rate are is now calculated using the same one-month revenue drop
    • for periods 8 to 10, use the new top-up calculation or the previous 3-month average drop, whichever works in your favour
  • the deadline to apply is January 31, 2021 Footnote 1, or 180 days after the end of the claim period, whichever comes later
  • starting in period 9, the calculation for employees on leave with pay now aligns better with EI benefits
  • you can now calculate pre-crisis pay (baseline remuneration) for employees who were on certain kinds of leave, retroactive to period 5
  • the Canada Emergency Rent Subsidy (CERS) has been introduced for businesses, non-profits, and charities
July 2020 changes

Changes to CEWS as of claim period 5 (Bill C-20):

  • the subsidy rate varies, depending on how much your revenue dropped
  • if your revenue drop was less than 30% you can still qualify, and keep getting the subsidy as employees return to work and your revenue recovers
    • for periods 5 and 6, if your revenue dropped at least 30%, your subsidy rate will be at least 75%, up to a maximum of $847/week per eligible employee
  • employers who were hardest hit can qualify for a higher amount
  • employees who were unpaid for 14 or more days can now be included in your calculation
  • use the current period’s revenue drop or the previous period’s, whichever works in your favour
Periods 1 to 4

For claim periods 1 to 4 (Bill C-14):

  • you must meet a minimum of 15% (period 1) or 30% (periods 2 to 4) revenue drop to qualify for the subsidy
  • if you qualify for a period, you automatically qualify for the following period
  • the subsidy rate is 75% of eligible employees' remuneration, up to a maximum of $847/week per eligible employee
  • employees who were unpaid for 14 or more consecutive days in the period can't be included in your calculation

How the subsidy helps

Get a % of your employees’ pay
per eligible employee
per week

The amount you get per employee is based on your revenue drop.

Subsidy rates for periods 11 to 13

You will be able to use the online calculator or downloadable spreadsheet to figure out how much subsidy you may receive for periods 11 through 13.

For periods 11 to 13, the maximum subsidy rate is 75% (40% base rate + 35% top-up). How you calculate your subsidy rate will be the same each period:

Revenue drop of 70% or more

Base rate

40%

plus

Top-up rate

35%

Revenue drop of 50% to 69.99%

Base rate

40%

plus

Top-up rate

1.75 x (revenue drop - 50%)

Revenue drop of 0% to 49.99%

Base rate

0.8 x revenue drop

plus

Top-up rate

0%

For periods 11 to 13, the top-up rate is based on the same revenue drop used to calculate your base rate.

Examples of how much you may qualify for

Your revenue drop is 60% in period 11, 12, or 13

In this example, you are calculating the period 11 wage subsidy for your employees Maude and Jean-Pierre, who have been working throughout the claim period (active employees) and are not related to you (arm’s-length employees).

Step 1: Determine your revenue drop

For this example, you’ve been using the general method to calculate your drop in eligible revenue since period 5 and have already figured out all the revenue drops you’ll need for period 11:

  • Claim period month: December 2020 divided by December 2019: 60% drop
  • Previous period month: November 2020 divided by November 2019: 58% drop

Step 2: Calculate the subsidy rate

To calculate your base and top-up rates, use the higher of the two revenue drops from step 1:

  • the claim period month revenue drop (December)
    or
  • the previous month's revenue drop (November)
  • In this example, you’ll use the December revenue drop of 60% because it is higher than the previous period month’s revenue drop of 58%.
  • Revenue drop of 60% = maximum base rate of 40%
  • Revenue drop of 60% = 1.75 x (60%-50%) = top-up rate of 17.5%

Step 3: Add the base rate and top-up rate to get your overall subsidy rate

Base rate of 40% + top-up rate of 17,5% = overall rate of 57.5%

Step 4: Calculate the amount of subsidy for your employee

Let’s say Maude made $1500/week during the claim period:

  • 57.5% (your overall subsidy rate) of $1,129/week (the maximum amount of remuneration per week)
  • $1,129 x 57.5% = $649.18/week
  • $649.18 x 4 weeks = $2596.70 for Maude for this claim period

Let’s say Jean-Pierre made $500/week during the claim period:

  • 57.5% (your overall subsidy rate) of $500/week (Jean-Pierre’s eligible weekly remuneration)
  • $500 x 57.5% = $287.50/week
  • $287.50 x 4 weeks = $1150 for Jean-Pierre for this claim period
Your revenue drop is 60% in period 8, 9, or 10

In this example, you are calculating the period 8 wage subsidy for your employees Bess and Jer, who have been working throughout the claim period (active employees) and are not related to you (arm’s-length employees).

Step 1: Determine your revenue drop

For this example, you’ve been using the general method to calculate your drop in eligible revenue since period 5 and have already figured out all the revenue drops you’ll need for period 8:

  • Claim period month: October 2020 divided by October 2019: 60% drop
  • Previous period month: September 2020 divided by September 2019: 58% drop
  • Average of July, August, and September, 2020, divided by the average of July, August, and September, 2019: 66% drop

Step 2: Calculate the subsidy rate

For the base rate, use the higher of the two revenue drops from step 1:

  • the claim period month revenue drop (October)
    or
  • the previous month's revenue drop (September)
  • In this example, you’ll use the October revenue drop of 60% because it is higher than the previous period month’s revenue drop of 58%.
  • Revenue drop of 60% = maximum base rate of 40%

For the top-up rate, use the higher of these two amounts:

  • the revenue drop you used when calculating your base rate (the higher of either the claim period month or the previous period month)
    and
  • the average revenue drop over the three months prior to the claim period compared to the average monthly revenue of the same 3 months in the previous year

In this example, you’ll use the three-month average drop (July, August, and September) of 66% because it is higher than the base revenue drop of 60%.

Top-up revenue drop of 66% = 1.25 x (66%-50%) = top-up rate of 20%

Step 3: Add the base rate and top-up rate to get your overall subsidy rate

Base rate of 40% + top-up rate of 20% = overall rate of 60%

Step 4: Calculate the amount of subsidy for your employee

Let’s say Bess made $1500/week during the claim period:

  • 60% (your overall subsidy rate) of $1,129/week (the maximum amount of remuneration per week)
  • $1,129 x 60% = $677.40/week
  • $677.40 x 4 weeks = $2709.60 for Bess for this claim period

Let’s say Jer made $500/week during the claim period:

  • 60% (your overall subsidy rate) of $500/week (Jer’s eligible weekly remuneration)
  • $500 x 60% = $300/week
  • $300 x 4 weeks = $1200 for Jer for this claim period
Your revenue drop is 30% in period 8, 9, or 10

In this example, you are calculating the period 10 wage subsidy for your employees Sam and Lindy, who have been working throughout the claim period (active employees) and are not related to you (arm’s-length employees).

Step 1: Determine your revenue drop

For this example, you’ve been using the alternative method to calculate your drop in eligible revenue since period 5 and have already figured out all the revenue drops you’ll need to compare for this period:

  • Claim period month: average of January and February, 2020, compared to December 2020: 22% drop
  • Previous month: average of January and February, 2020, compared to November 2020: 30% drop
  • Average of January and February, 2020, compared to the average of September, October, and November, 2020: 26% drop

Step 2: Calculate the subsidy rate

For the base rate, you’ll use the November revenue drop of 30% because it is higher than the claim period month’s revenue drop of 22%.

  • Revenue drop of 30% = base rate calculation 30% x 0.8 = base rate of 24%

Because neither the drop you used to calculate your base rate (30%) nor your three-month average drop (26%) were over 50%, your top-up rate will be 0.

  • Top-up revenue drop less than 50.00% = no top-up amount

Step 3: Add the base rate and top-up rate to get your overall subsidy rate

Base rate of 24% + top-up rate of 0% = overall rate of 24%

Step 4: Calculate the amount of subsidy for your employee

Let’s say Sam made $1500/week during the claim period:

  • 24% (your overall subsidy rate) of $1,129/week (the maximum amount of remuneration per week)
  • $1,129 x 24% = $270.96/week
  • $270.96/week x 4 weeks = $1083.84 for Sam for this claim period

Let’s say Lindy made $500/week during the claim period:

  • 24% (your overall subsidy rate) of $500/week (Lindy’s eligible weekly remuneration)
  • $500 x 24% = $120/week
  • $120 x 4 weeks = $480 for Lindy for this claim period
Your revenue drop is 60% in period 7
Eligible, active, arm’s-length employee earns $1,500/week (when revenue drop is 60% in period 7)
Using the
period 7 calculation

Base amount:

  • maximum claim is 50% of $1,129/week
  • $1,129 x 50% = $564.50/week

Top-up:

  • maximum claim is 1.25 x (your revenue drop % - 50%)
  • 1.25 x (60% - 50%) = 12.5%
  • $1,129 x 12.5% = $141.13/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Your claim for this employee:

  • $564.50 + $141.13 = $705.63/week

Eligible, active, arm’s-length employee earns $500/week (when revenue drop is 60% in period 7)
Using the
period 7 calculation

Base amount:

  • maximum claim is 50% of $500/week
  • $500 x 50% = $250.00/week

Top-up:

  • maximum claim is 1.25 x (your revenue drop % - 50%)
  • 1.25 x (60% - 50%) = 12.5%
  • $500 x 12.5% = $62.50/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Your claim for this employee:

  • $250.00 + $62.50 = $312.50/week
Your revenue drop is 30% in period 7
Eligible, active, arm’s-length employee earns $1,500/week (when revenue drop is 30% in period 7)
Using the
period 7 calculation

Base amount:

  • maximum claim is 1 times your revenue drop % x $1,129/week
  • 1 x 30% = 30%
  • $1,129 x 30% = $338.70/week

Top-up:

  • $0/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Your claim for this employee:

  • $338.70 + $0 = $338.70/week

Eligible, active, arm’s-length employee earns $500/week (when revenue drop is 30% in period 7)
Using the
period 7 calculation

Base amount:

  • maximum claim is 1 times your revenue drop % x $500/week
  • 1 x 30% = 30%
  • $500 x 30% = $150.00/week

Top-up:

  • $0/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Your claim for this employee:

  • $150.00 + $0 = $150.00/week
Your revenue drop is 60% in period 5 or 6
Eligible, active, arm’s-length employee earns $1,500/week (when revenue drop is 60% in period 5 or 6)
Using the
period 5 and 6 calculation
Using the "safe harbour" rule

Base amount:

  • maximum claim is 60% of $1,129/week
  • $1,129 x 60% = $677.40/week

Top-up:

  • maximum claim is 1.25 x (your revenue drop % - 50%)
  • 1.25 x (60% - 50%) = 12.5%
  • $1,129 x 12.5% = $141.13/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Rate:

  • Claim is 75% of earnings up to a maximum benefit of $847/week

Your claim for this employee:

  • $677.40 + $141.13 = $818.53/week

Your claim for this employee:

  • $847/week

For this employee, you would use the $847/week subsidy and not the $818/week.


Eligible, active, arm’s-length employee earns $500/week (when revenue drop is 60% in period 5 or 6)
Using the
period 5 and 6 calculation
Using the
"safe harbour" rule

Base amount:

  • maximum claim is 60% of $500/week
  • $500 x 60% = $300.00/week

Top-up:

  • maximum claim is 1.25 x (your revenue drop % - 50%)
  • 1.25 x (60% - 50%) = 12.5%
  • $500 x 12.5% = $62.50/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Rate:

  • maximum claim is 75% of $500/week
  • $500 x 75% = $375.00/week

Your claim for this employee:

  • $300.00 + $62.50 = $362.50/week

Your claim for this employee:

  • $375.00/week

For this employee, you would use the $375.00/week subsidy and not the $362.50/week.

Your revenue drop is 30% in period 5 or 6
Eligible, active, arm’s-length employee earns $1,500/week (when revenue drop is 30% in period 5 or 6)
Using the
period 5 and 6 calculation
Using the
"safe harbour" rule

Base amount:

  • maximum claim is 1.2 times your revenue drop % x $1,129/week
  • 1.2 x 30% = 36%
  • $1,129 x 36% = $406.44/week

Top-up:

  • $0/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Rate:

  • maximum claim is 75% of $1,500 to a maximum of $847

Your claim for this employee:

  • $406.44 + $0 = $406.44/week

Your claim for this employee:

  • $847.00/week

For this employee, you would use the $847.00/week subsidy and not the $406.44/week.


Eligible, active, arm’s-length employee earns $500/week (when revenue drop is 30% in period 5 or 6)
Using the
period 5 and 6 calculation
Using the
"safe harbour" rule

Base amount:

  • maximum claim is 1.2 times your revenue drop % x $500/week
  • 1.2 x 30% = 36%
  • $500 x 36% = $180.00/week

Top-up:

  • $0/week

For this example,
we are assuming that the average three-month top-up revenue drop
was the same as the base revenue drop.

For non-arm’s-length employees, the subsidy amount is based on the least of their eligible remuneration, baseline remuneration, and $1129.00.

Rate:

  • maximum claim is 75% of $500/week
  • $500 x 75% = $375.00/week

Your claim for this employee:

  • $180.00 + $0 = $180.00/week

Your claim for this employee:

  • $375.00/week

For this employee, you would use the $375.00/week subsidy and not the $180.00/week.

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