The Temporary Wage Subsidy for Employers and Updates on The Canada Emergency Wage Subsidy

The Temporary Wage Subsidy for Employers and Updates on The Canada Emergency Wage Subsidy

Kalen Ingram
Posted April 3, 2020 Category: Businesses


The TWSE permits employers to reduce payroll remittances to the CRA on account of federal and provincial income taxes. It can be applied to remuneration paid to employees between March 18, 2020 and June 19, 2020.

Eligibility Requirements?

Unlike the CEWS, which has more stringent eligibility requirements, the TWSE is accessible to any individual (excluding trusts), non-profit, charity, or Canadian-controlled private corporation that has an existing business number and payroll account with the CRA, and which pays salary/wages/bonuses or other remuneration to an employee in Canada.  Partnerships are also eligible provided their members consist exclusively of individuals (excluding trusts), registered charities, or Canadian-controlled private corporations eligible for the small business deduction.

How much?

The amount of the subsidy is 10% of the remuneration paid to employees from March 18, 2020 to June 19, 2020. The maximum subsidy is $1,375 for each employee or $25,000 per employer over the 3-month period.

How does it work?

You do not need to apply for the TWSE.  You have to calculate your wage subsidy yourself and simply reduce the amount remitted to CRA by the amount of your subsidy.  To be clear, you continue to deduct income taxes from your employees’ pay; the subsidy simply allows you to reduce the amount that is then remitted. CPP and EI deductions and remittances continue as usual.

If the income tax that you deduct from your employees’ wages over the 3-month period does not exceed your eligible subsidy, you are permitted to reduce income tax remittances applicable to wages paid to employees after June 19, 2020.

Can I use both the TWSE and the CEWS?

If you are eligible for both the TWSE and the CEWS, any amount you receive from the 10% wage subsidy will reduce the amount you receive under the CEWS.


The Government has released more details about the CEWS on its website after the Finance Minister’s press conference yesterday. 

Amount of the Subsidy

The subsidy is based on “eligible remuneration” paid between March 15 and June 6, and is the greater of:

A. 75% of remuneration paid, up to a maximum of $847 per week


B. The lesser of either:

(i) remuneration paid, up to a maximum of $847 per week
(ii) 75% of the employee’s “pre-crisis” weekly remuneration

Eligible remuneration includes salary, wages, and other remuneration but not severance pay, or items such as stock option benefits or the personal use of a corporate vehicle.  There is not yet a definition of “pre-crisis” weekly remuneration.

Eligibility Periods

The government has defined three specific eligibility periods, with a reference period to determine eligibility, as follows:

  Claiming period Reference period for eligibility
Period 1 March 15 – April 11March 2020 compared to March 2019
Period 2 April 12 – May 9 April 2020 compared to April 2019
Period 3 May 10 – June 6 May 2020 compared to May 2019

CEWS and the Canada Emergency Response Benefit (CERB)

An employer will not be permitted to claim the CEWS for remuneration paid to an employee that falls within a 4-week period for which an employee has claimed entitlement to the $2,000 CERB.

We hope that you find these helpful.

Keep safe.

The Labour & Employment Team at Cunningham Swan

Kalen Ingram
Posted April 3, 2020 Category: Businesses

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