How to take advantage of the TWS

You do not need to apply for the 10% Temporary Wage Subsidy for Employers (TWS). The TWS is calculated before you send your payroll remittance to the Canada Revenue Agency (CRA).

Reducing your payroll remittances

You will continue deducting income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums from salary, wages, bonuses, or other remuneration paid to your employees as you currently do.

Once you have calculated your TWS, you can reduce your payroll remittance of federal, provincial, or territorial income tax you send to the CRA by the amount of the TWS:

• Example: How the subsidy will reduce your current payroll remittance

  If you deducted $2,500 of income tax from your employees’ pay and calculated a subsidy of $2,050, you would reduce your current payroll remittance of federal, provincial, or territorial income tax by $2,050. You would remit $450 of income tax to the CRA. The remaining $2,050 you keep is your subsidy.

When you can start reducing payroll remittances

You can start reducing payroll remittances of federal, provincial, or territorial income tax in the first remittance period that includes remuneration paid from March 18 to June 19, 2020.

Payroll remittances are not subject to deferral as part of the tax measures to help support those affected by the COVID-19 outbreak. You must continue remitting payroll deductions by your remittance due date.

For example, if you are a regular remitter, you could have reduced your payroll remittance that was due to the CRA on April 15, 2020.

If subsidies exceed payroll remittances

If the income taxes you deduct are not enough to offset the TWS in a specific period, you can reduce future payroll remittances to benefit from the TWS. This means, you can reduce remittances that may fall outside of the application period for the TWS (after June 19, 2020). Only subsidy amounts calculated on remuneration paid between March 18 to June 19, 2020 can be used for these future reduced remittances.

• Example: When you can reduce a future payroll remittance

  If you calculated a subsidy of $2,050 on remuneration paid from March 18 to June 19, 2020, but only deducted $1,050 of federal, provincial, or territorial income tax from your employees, you can reduce a future payroll remittance by $1,000, even if that remittance is for a remuneration paid after June 19, 2020.

If payroll remittances have not been reduced

If you are an eligible employer, but you do not reduce your payroll remittances, you can still calculate the TWS on remuneration paid from March 18 to June 19, 2020. The CRA will pay the amount of the subsidy to you at the end of the year or transfer it to your next year’s remittance.

Refer to Scenario 1 - You are an eligible employer who wants to receive the TWS, but have not reduced your remittances.