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Understanding Canada Emergency Wage Subsidy (CEWS)

Updated May 20, 2020: Please note that tax policies are changing rapidly. We are updating this article as details are made available.


As a Canadian employer whose business has been affected by COVID-19, you may be eligible for a subsidy of 75% of employee wages for up to 24 weeks, retroactive from March 15, 2020, to August 29, 2020.

This wage subsidy will enable you to re-hire workers previously laid off as a result of COVID-19, help prevent further job losses, and better position you to resume normal operations following the crisis.




To be eligible to receive the wage subsidy, you must:

  • be an eligible employer

  • have experienced an eligible reduction in revenue, and

  • have had a CRA payroll account on March 15, 2020

What type of employers qualify?

  • Individuals
  • Corporations
  • Registered charities, other than public Institutions
  • Not-for-profits
  • Partnerships, where the partners are made up only of the above entities

What is revenue for the purposes of CEWS?

Revenue is to be calculated based on “normal accounting practices” or an employer can elect to calculate revenue, for purposes of the CEWS, on a cash basis. The method selected to calculate revenue for purposes of the CEWS must be used consistently for each period.

Revenue from non-arm’s length persons (e.g. related companies) must be excluded from revenue for purposes of the CEWS.

What is “eligible reduction in revenue”?

  • Calculate your reduction by comparing your eligible revenue for the starting month of the claim period with your baseline revenue. Your baseline revenue is either:
    • the revenue you earned in the corresponding month in 2019, or
    • the average of the revenue you earned in January and February 2020

You must choose one of these baseline revenue options for your method of comparison and will not be able to change it for your calculations for any other periods.


Claim period Start and end dates Baseline revenue Claim period revenue Required reduction
1 March 15 to April 11, 2020
  • March 2019, or
  • average of January and February 2020
March 2020 15%
2 April 12 to May 9, 2020
  • April 2019, or
  • average of January and February 2020
April 2020 30%
3 May 10 to June 6, 2020
  • May 2019, or
  • average of January and February 2020
May 2020 30%
4 June 7 to July 4, 2020
  • June 2019, or
  • average of January and February 2020
June 2020 30%

How is the wage subsidy calculated?

The CRA website has an Excel sheet for download that assists in calculating the CEWS, which you can access here. The subsidy is calculated on an employee-by-employee basis and there is no maximum per employer. The formula is described below but the maximum of $847 per week is equal to 75% of an annual salary of $58,700.

The subsidy for a given week is calculated as being greatest of two formulas (A) and (B):

(A) The least of the following:

  • $847;
  • 75% of “baseline remuneration” in respect of the employee; and
  • 100% of eligible remuneration paid to the employee in respect of that week.

(B) The least of the following:

  • 75% of the eligible remuneration; and
  • $847.

Baseline remuneration is what was previously called “pre-crisis” earnings. Baseline remuneration is the average weekly eligible remuneration paid to the employee by the employer during the period of January 1, 2020 and March 15, 2020, excluding any period of seven or more consecutive days for which the employee was not remunerated.

For new employees (excluding non-arm’s length persons) hired after March 15, the wage subsidy will be calculated per formula (B) above as they won’t have any baseline remuneration. For non-arm’s length persons (e.g. related persons) the amount can only be calculated using (A) above meaning if they have no baseline remuneration they aren’t entitled to the wage subsidy.

Amounts that decrease the CEWs Claim – 10% Temporary Wage Subsidy (TWS) and Work Sharing Benefit (WSB)

An employer must reduce their claim for the CEWS by any amount they received under the ESDC’s Work Sharing Benefit program and any amount they were eligible, even if not claimed, to receive under the TWS. You can find more information on the TWS here.

How to apply for the CEWS

Employers can apply through CRA’s My Business Account.

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