CEWS – Canada Emergency Wage Subsidy

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Updated: April 7, 2021


Bill C-9 – Update – (Status: implemented) 

Canada Emergency Wage Subsidy  (CEWS)  [75% wage subsidy]

Click here for CRA CEWS FAQ’s


On March 3, 2021, the government of Canada announces changes to Canada Emergency Wage Subsidy, Canada Emergency Rent Subsidy and the Lockdown Support program.

The following changes are:

  • Maximum base wage remains 40% and the maximum top-up remains 35%. The maximum combined wage subsidy remains 75%.
  • The approaches chosen by employers must remain the same during these periods.
  • Revenue Decline reference periods:
      • General Approach – based on 2019 calendar months
      • Alternative Approach – the average of January and February 2020 
  • Alternative  baseline remuneration computation period form period 14-16

Choice to decide between the following periods:

      • March 1 to June 30 2019
      • July 1 to December 2020
  • Support for Furlough Employees – Remains the same until June 5, 2021.

The amount of eligible remuneration paid per week:

      • $500
      • 55% of pre-crisis remuneration, maximum subsidy of $595 



Qualifying periods added 

  • Period 4  June 7 – July 4            June 2019 reference
  • Period 5  July 5 – Aug 1              July 2019 reference
  • Period 6  Aug 2 – Aug 29           Aug 2019 reference
  • Period 7  Aug 30 – Sept 26       Sept 2019 reference
  • Period 8  Sept 27 – Oct 24        Oct 2019 reference
  • Period 9  Oct 25 – Nov 21         Nov 2019 reference
  • Period 10  Nov 22 – Dec 19      Dec 2019 reference 
  • Period 11  Dec 20 – Jan 16        Dec 2019 reference 
  • Period 12  Jan 17 – Feb 13        Jan 2020 reference
  • Period 13  Feb 14 – Mar 13       February 2020 reference
  • Period 14  Mar 14 – Apr 10       March 2019 reference
  • Period 15  Apr 11 – May 8         April 2019 reference
  • Period 16  May 9 – June 5          May  2019 reference


(Added: qualifying periods 11 to 17 – details to follow)

The final period ends no later than June 30, 2021.

For the entitlement periods 5 and thereafter, if an employee has taken parental leave or other EI leave in accordance with paragraph 12 (3) of the EI Act for the entire period from 1 July 2019 to 15 March 2020, the reference period for that employee may be chosen as the period of 90 days prior to commencement of leave.



Revised CEWS

All eligible employers that experience any level of qualifying revenue decline may be eligible to claim a subsidy.

The subsidy rate of the revised CEWS varies depending on the level of decline in “qualifying revenues.”



The Revised CEWS is based on two components – a base rate and a top-up rate

Base rate:

A maximum base rate is available if a decline in revenue of at least 50% occurred during that period. If the decline is less than 50%, the base rate is reduced.

The maximum base rate for periods 5 and 6 is 60% and gradually decreases.

The maximum base rate for period 8 and 10 is 40%.


Top-up rate:

The maximum top-up rate is 25% in qualifying Periods 5 to 9. It is available if the qualifying revenue drop is 70% or greater.

The decline in qualifying revenue is computed by comparing either:

qualifying revenue in the preceding 3 months to revenue for the same months of the prior year,


average monthly revenue in the preceding 3 months to average monthly revenue in January and February 2020.



Rate Structure of the combined base CEWS and the top-up CEWS for the most affected employers


Revenue drop in the current 1month reference period

Period 7: August 30 – September 26

Period 8 to 10: September 27 – December 19

Period 11 to 13: December 20 – March 13

Period 14 to 16: March 14 – June 5

Maximum weekly benefit per employee   Up to $847 Up to $573 Up to $595 Up to $595
Revenue drop 50% and over 75% (50% base CEWS + 25% top-up) 65% (40% base CEWS + 25% top-up) 75% (40% base CEWS + 35% top-up) 75% (40% base CEWS + 35% top-up)
0% to 49%



1.0 x revenue drop +25% 

(e.g., 1.0 x 20% revenue drop + 25% = 45% CEWS rate)



0.8 x revenue drop+ 25% 

0.8 x revenue drop+ 0% 

0.8 x revenue drop+ 0% 



The total available subsidy in respect of each week during a qualifying period in respect of an active eligible employee is computed by multiplying the applicable base rate plus the applicable top-up rate by total “eligible remuneration” of up to $1,129.


 (Base Percentage + Top-up Percentage) x Eligible Remuneration (up to $1,129 per week)


The reference periods to determine the qualifying revenue decline in percentage are based on current monthly revenues compared to 2 options:

  • The same months’ revenues in the prior year
  • To the average of January and February 2020 revenues (alternative method)

Note: An employer is not required to use the same revenue reference period approach used for the qualification of Periods 1 to 4. But they need to use the same approach to qualify for Periods 5 to 10.

For qualifying period 2,3, or 4, 70% (for qualifying period 5 to 17 – (any decline in qualifying revenue is sufficient).


CRA Calculator  – Calculate your subsidy amount  



The Safe Harbour Rule is used to ensure to qualify for periods 5 and 6 (July 5 to August 1 and August 2 to August 29).

A rate of 75% of the CEWS is available if the revenue decline is at least 30%. (i.e. the safe harbour rules ensure that for Qualifying Periods 5 and 10, employers will have access to a CEWS rate that is at least as high as the rate would have been under the initial CEWS).


Furloughed Employees:

The subsidy calculation for furloughed employees starting August 30 aligns with the benefits provided under the CERB and/or Employment Insurance. The employer portion of contributions in respect of the CPP, QPP, EI, and the QPIP continues to be refunded to the employer.

The amount of the subsidy given for furloughed employees relies on the claim period:

  • For periods 1 – 4 & 5 – 6, the subsidy is the same as in the original program as follows (for arms-length employees)

75% of the amount of remuneration paid, to a maximum benefit of $847 per week;

The CEWS is computed based on remuneration paid in respect of a week during a qualifying period; the remuneration may be paid at any time before January 31, 2021.



Deadlines to submit claims extended

Qualifying entities can still file for an application it must be received before February 2021. 



Other changes

1. Formal appeals applications: provide an appeal process based on the existing procedure for notices of determination that allows for an appeal to the Tax Court of Canada.

2. Asset Sales: provide continuity rules for the calculation of an employer’s drop in qualifying revenues in certain circumstances where the employer purchased all or substantially all of the assets of a business during a qualifying period.

Continuity rules provide for calculating an acquirer’s drop in revenues. These rules are subject to conditions, which include:

          • The seller used the acquired assets to carry on a business in Canada
          • The buyer purchased all or substantially all of the seller’s assets used to carry on business in Canada
          • The buyer and seller made a joint election with the CRA (unless the seller no longer exists, in which case the buyer makes the election)

Where the conditions are met, the revenue from the acquired assets in both the past or current reference period is included in the buyer’s revenue for the qualifying period and excluded from the seller’s.

Asset Sales: Instead of having to acquire all or substantially all of the business property, the condition may be met by acquiring all or substantially all of the property of the seller, which can reasonably be considered necessary for the eligible undertaking to be able to operate a business of the seller or part of a business of the seller as a business.


4. New “baseline remuneration” definition to better accommodate seasonal employees and employees returning from extended leaves.

    Bill C-20 adds two more alternative baseline periods: 

        • One alternative period begins March 1, 2019, and ends June 30, 2019
        • The second begins July 1, 2019, and ends December 31, 2019
        • Baseline Remuneration – accommodation for employees returning from leave 

5. Allowing prescribed organizations that are registered charities or NPOs to choose whether or not to include government-source revenue in “qualifying revenue” for the purposes of the CEWS program.

6. Allowing entities that use the cash method of accounting to elect to use accrual-based accounting to compute their revenues for the purpose of the CEWS program.

7. Consolidated vs. Non-consolidated Revenue – provide relieving CEWS computation measures for corporations that have amalgamated and for eligible entities that use a payroll service provider.

8. Trusts may be an “eligible entity”– which provides for the aligned treatment of trusts and corporations for the purposes of the CEWS.



New Qualifying Periods 11 to 17

The maximum CEWS rate for Qualifying Periods and reference periods 11 – 17 (Status: to be announced).

The “top-up rate percentage” – is replaced by the percentage determined by the regulation for the qualifying period. If there is no percentage determined, the lesser of 25% and the percentage determined by the formula.

“Top-up revenue reduction percentage” – to calculate the revenue decline test. Instead of the three-month revenue decline test for the top-up subsidy. Both the “top-up rate” and “base-rate” will be determined by the employer’s monthly revenues, the year-over-year basis for current or previous months.


Bill C-9:  Other changes  

Application deadlines: the deadline for application is January 31, 2021, and 180 days after the end of the specific period.

“Eligible employee: employees who did not receive a remuneration for 4 or more days do not qualify as an “eligible employee.” This applies for periods 1 to 4. The employee is required to be employed primarily in Canada.

Joint Ventures: all interest in an eligible entity is owned by all the participants in the joint venture. The revenues produced in this venture can be used to qualify for periods of revenue instead of its own, to qualify for the revenue decline test. 

Asset purchase: the asset purchase rule has been extended to cover unlimited acquisitions. Instead of acquiring all or substantially all the business property, the condition may be met by acquiring all or substantially all the property of the seller, which can reasonably be considered necessary for the eligible undertaking to operate as an enterprise a business of the seller or part of a business of the seller.

Elections: the technical problem preventing elections under these paragraphs after the fourth period has been fixed.

Amending or revoking elections: a qualified entity may now amend or revoke an election made on or before the date that the application is due for the first qualifying period in respect of which the election is made.

Eligibility of employees: workers who are mainly employed in Canada, and this requirement is limited to the period in which the person is employed by the eligible institution.



10% Temporary Wage Subsidy  (TWS)

  • The 10% TWS is a three-month measure that allows eligible employers to reduce the amount of federal, provincial, or territorial income tax they have to remit to the CRA. The subsidy is equal to 10% (or a lower percentage the employer elects to claim) on the remuneration paid from March 18 to June 19, 2020, up to $1,375 for each eligible employee. The maximum for each employer is $25,000.
  • If you are an eligible employer that has more than one payroll program (RP) account, you must submit all payroll information on separate self-identification forms. You must submit all the forms together, making sure that the total is not more than the maximum subsidy per employee and/or maximum subsidy per employer. If you have not reduced your payroll remittances during the year, you can still calculate the TWS on remuneration paid during the identified period and submit the application form(s) at the end of the year.
  • For the TWS, you are considered to have remitted an amount to the CRA that is equal to the amount of the subsidy. Since this amount forms part of your payroll remittance, the CRA will use the information on this form to reconcile the subsidy on your payroll program account. This will ensure that you do not receive a discrepancy notice.


Election:  You may be eligible for both the TWS and the CEWS. Employers that are eligible for both subsidies can claim only a maximum total subsidy of 75% of the eligible remuneration that they pay. Therefore, if you are eligible for both subsidies, you must reduce your CEWS claim by all amounts you claim under the TWS for the payment dates in a specific CEWS claim period.

If an employer chooses, they may elect for the TWS to be equal to a lower percentage of the remuneration they pay. If you claim less than the total 10% amount you are eligible for, the CRA will consider that you elected to reduce your eligible subsidy.



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