Archive for category: Business Tips

The Canada Emergency Wage Subsidy has been extended until December 19, 2020. It is designed to slowly cut down on the amount that businesses will be receiving. Information for periods until November 21^st have been released to the public.

 

The periods are as follows:

5. July 5 to August 1 –Opened up for filing on August 17 2020
6. August 2 to August 29 – Will open up for filing September 2 2020
7. August 30 to September 26
8. September 27 to October 24
9. October 25 to November 21

 

The subsidy now consists of a base subsidy & top up subsidy.

Base Subsidy: CEWS now offers a base subsidy for any employer who experienced a decline in revenue in the period. The amount they are eligible for is based off how much their revenues has dropped.

Top up Subsidy: For the hardest hit employers, CEWS now includes a top up of up to 25%.

 

Periods 5 & 6 Safe Harbour Rules

Employers who have experience at least a 30% revenue drop in periods 5 & 6, may still use the previous CEWS program to receive 75%. The CRA refers to this as the “Safe Harbour Rule”.

In the “Supporting Canadian Workers” News release, they stated that they would:

“Provide certainty to employers that have already made business decisions for July and August by ensuring they would not receive a subsidy rate lower than they would have had under the previous rules.”

Reference Periods for CEWS

Period 5 provides a reset for the reference period used for CEWS. You may choose to continue to use Month over Month (general approach) or January & February average (alternative approach). Once you have chosen for period 5, you must follow this way for the rest of CEWS.

An additional measure added to the reference period for the base subsidy of CEWS, is that it allows for the current or previous month to be used as the 2020 reference period. This allows for the company to automatically qualify for the next month of the program.

The top up subsidy has different qualifying reference periods. It encompasses a three month period.

See below charts for full reference periods.

 

Base Subsidy

	Claim period	General approach	Alternative Approach
Period 5	July 5 to August 1, 2020	July 2020 over July 2019 or June 2020 over June 2019	July 2020 or June 2020 over average of January and February 2020
Period 6	August 2 to August 29, 2020	August 2020 over August 2019 or July 2020 over July 2019	August 2020 or July 2020 over average of January and February 2020
Period 7	August 30 to September 26, 2020	September 2020 over September 2019 or August 2020 over August 2019	September 2020 or August 2020 over average of January and February 2020
Period 8	September 27 to October 24, 2020	October 2020 over October 2019 or September 2020 over September 2019	October 2020 or September 2020 over average of January and February 2020
Period 9	October 25 to November 21, 2020	November 2020 over November 2019 or October 2020 over October 2019	November 2020 or October 2020 over average of January and February 2020

 

Top-Up Subsidy

	Claim period	General approach	Alternative approach
Period 5	July 5 to August 1, 2020	April to June 2020 over April to June 2019	April to June 2020 average over January and February 2020 average*
Period 6	August 2 to August 29, 2020	May to July 2020 over May to July 2019	May to July 2020 average over January and February 2020 average*
Period 7	August 30 to September 26, 2020	June to August 2020 over June to August 2019	June to August 2020 average over January and February 2020 average*

 

Base Subsidy

Starting in period 5 of the wage subsidy, the base subsidy will be calculated based off the amount of revenue decline in the period, multiplied by 1.2. This amount will top out at a 50% decline, which would be a 60% base subsidy amount. See above for reference periods.

This base subsidy will slowly decrease in amount, eventually getting to 20% subsidy in period 9. The amount you multiple the revenue loss will also decrease as the periods continue on. Chart below for reference.

Timing	Period 5*: July 5 – August 1	Period 6*: August 2 – August 29	Period 7: August 30 – September 26	Period 8: September 27 – October 24	Period 9: October 25 – November 21
Maximum weekly benefit per employee	Up to $677	Up to $677	Up to $565	Up to $452	Up to $226
Revenue drop
50% and over	60%	60%	50%	40%	20%
0% to 49%	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop = 24% base CEWS rate)	1.2 x revenue drop (e.g., 1.2 x 20% revenue drop = 24% base CEWS rate)	1.0 x revenue drop (e.g., 1.0 x 20% revenue drop = 20% base CEWS rate)	0.8 x revenue drop (e.g., 0.8 x 20% revenue drop  = 16% base CEWS rate)	0.4 x revenue drop (e.g., 0.4 x 20% revenue drop = 8% base CEWS rate)

 

 

Top Up Subsidy

Starting in period 5, there is a top up available to the hardest hit employers. This is defined as anyone who has experienced a revenue drop of more than 50%. See above for reference periods.

The top up maxes out at 25%. It is calculated by taking the revenue decline minus 50 and multiplying it by 1.25 (see table below). This 25% does not change between periods.

This top up would then be added to the base subsidy to get the total subsidy for the period.

** Note that because the reference periods for the top-ups are 3 month periods in the past, a company could qualify for a top up, but not for the base subsidy. Both must be looked at.

3-month average revenue drop	Top-up CEWS rate	Top-up calculation = 1.25 x (3 month revenue drop – 50%)
70% and over	25%	1.25 x (70%-50%) = 25%
65%	18.75%	1.25 x (65%-50%) = 18.75%
60%	12.5%	1.25 x (60%-50%) = 12.5%
55%	6.25%	1.25 x (55%-50%) = 6.25%
50% and under	0.0%	1.25 x (50%-50%) = 0.0%

 

Calculating the Wage Subsidy

The CRA has created easy to use online tools and a downloadable spreadsheet. They can be found here.

Once you have chosen your reference period (month vs month, or compared to average of January/February), you will only need to input the companies sales periods for the months requested. CRA will then calculate the wage subsidy percentage that may be applied. This calculate does include the Safe Harbour rule mentioned above for periods 5 & 6.

 

*** All tables and numbers were taken from the CRA release on the new CEWS here. There is information on CEWS for Furloughed Employees on the link above – but no details have been added here.

 

It is important to file the wage subsidy correctly. If you need help, contact a qualified professional.

On January 1, 2020 the federal government instituted a carbon tax in Alberta. To help offset the amounts paid, they have also introduced the Climate Action Incentive for Alberta residents. 

 

Alberta is not the only province that this incentive has been introduced in. Residents in Saskatchewan, Manitoba, and Ontario will also see it this year. For the interests of the post however, it will only be referencing the Albertan incentive. 

 

You access this incentive when you are filing your 2019 tax return. Each family will be able to claim it once. By including this in your taxes, it ensures accurate and quick processing. It will also make sure that everyone will receive it, as everyone needs to file taxes! 

 

The incentive will be paid in a tier system, with larger families receiving more: 

 

• $444 for single adults, or the first adult in a couple
• $222 for the second adult in a couple, or the first child of single parent
• $111 for each child in the family, or the second child on for single parents

 

If you are resident of a small or rural community, defined as anywhere out of a census metropolitan area (Alberta has three census metropolitan areas, Edmonton, Calgary, and Lethbridge), you are eligible for an extra 10% payment amount. This is to reflect the extra energy needs of those outside of major cities. You will need to indicate on your tax return if this is applicable to you. 

 

The amount of the Climate Action Incentive will change annually, based on the amounts of the federal carbon tax. Most Albertans are calculated to receive more back from this incentive than they will pay towards the carbon tax.

 

If you have any addition questions, you can ask your tax preparer, or check out the CRA website here

To our valued customers,

 

COVID-19 is at the forefront of all our minds as the outbreak continues to spread. On-Core would like to assure you that we are closely monitoring the situation and acting based on all recommendations from the Public Health Agency of Canada. The health and well-being of staff and clients are our top priority as this situation progresses. We have increased cleaning of our office, instituted protocol to minimize the risk of exposure, and are making sure that staff who feel sick do not come to work.

 

In order to lower the risk for both staff and clients, and ensure the least disruption of your bookkeeping, we ask that clients please consider the following:

 

• If you have returned from out of the country recently, or are feeling unwell, please have someone else drop off your work to us. If you are dropping off your work in person, we do have envelopes outside of the door, and you can put it in the mail slot on our front door.
• If possible, consider an electronic option for your work. On-Core can send you a Dropbox link to make this easier.
• Consider calling or emailing in to On-Core with questions, instead of having an in-person meeting.

 

 

Please note, that the Government of Canada has extended the personal tax deadline to June 1^st. They have also extended the deadline to pay income taxes, interest free, until after August 31^st.  The Canada Revenue Agency will also allow businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020.

 

On-Core will continue to provide all our regular services to our clients and strive to meet all deadlines. We also feel it is important to complete your personal tax returns as scheduled so please continue to bring in your paperwork.

 

A staff member will always be in the office to answer questions and be of assistance.

 

If your regular staff member is not available, you can call our main line at 780-640-8244.

 

Thank you for your continued support of On-Core. We appreciate all our staff and clients and want everyone to be safe and healthy.

 

If you have any questions, please let us know, and we will be happy to answer them.

One of your payroll obligations is to create a Record of Employment (ROE) for your employees when there is an interruption in earnings. It is the document used by Service Canada when someone has applied for EI (this includes maternity leave).  Some employers are not aware of their requirement to file a ROE, which can be costly. As with everything government, there is a fine for not filing ROEs on time. They can charge the employer $2,000 or impose jail time of up to 6 months or both. 

 

If you are using a payroll program, it will assist you in the filing of your ROE. It will automatically fill out all the company and employee information. As well as all the blocks in section 15, which can be found below. This post will cover all the blocks that you will manually need to fill out in the payroll program. If you do not have a payroll program, you can find a more in depth guide to filling out an ROE here. 

 

Blocks on the ROE 

 

Block 6 – Pay Period Type

 

The frequency in which you pay your employees, for example, bi-weekly, monthly, or semi-monthly. If your employee is commission only, you would put weekly in this block.

 

Block 10- First Day Worked 

 

The day the employee started with your company. It is important to note, that if you have issued a previous ROE for this employee, that the first day worked is the first day worked after their previous leave, not their first day with the company.

 

Block 11 – Last Day for Which Paid 

 

This block is where you put their last day of employment with your company. It may not necessarily be the last day in which they physically worked. If they took vacation pay, or paid sick leave, it will be the date that these payments ended. 

 

Block 12 – Final Pay Period Ending Date 

 

This block corresponds with block 11. You need to enter in the last day of the pay period that they employees last day falls into. 

 

Block 14 – Expected Date of Recall 

 

If you have laid off an employee for a set amount of time, or they have gone on Maternity leave, you can put the date that you expect them to come back to work in this block. If you do not expect them to return to your company, you can click off not returning.

 

Block 15

 

Block 15 is comprised of 3 areas: 

 

Block 15A – Total Insurable Hours

Block 15B – Total Insurable Earnings

Block 15C – Insurable Earnings by Pay Period 

 

As mentioned above, a payroll program will fill in these sections for you. If you need to do it manually you can follow the link above, or talk to a payroll professional.

 

Block 16 – Reason for Issuing ROE

 

In this block, you need to inform Service Canada for the reason you are issuing the ROE. Common codes can be found in the chart below. 

 

Code	Reason
A	Shortage of work/ end of contract season
D	Illness or Injury
E	Quit
F	Maternity Leave
G	Retirement
J	Returning to school for apprentice training
M	Dismissal
N	Leave of Absence
P	Parental

 

One less used code that many employers do not know about it code K, Other. If you change payroll service providers, you need to file an ROE for your employees. You would use Code K, Other/Change in Service provider.

 

Block 17A – Vacation Pay 

 

Employees are entitled to vacation pay. In this block you need to tell Service Canada how you have paid it out to them. The two most common methods are: 

 

-Included with each pay

-Paid because no longer working – if you use this explanation, you will need to enter the amount you have paid out to the employee

 

Block 17C – Other Monies 

 

You use this section if you have paid out money to an employee, other than vacation pay, at their time of interrupted earnings. For all these reasons, you will need to enter in the amount paid out to them. 

Some examples of monies in this section are: pay in lieu of notice, severance pay, or bonuses. 

 

Deadlines for filing ROEs 

 

If you are preparing a paper ROE, the filing deadlines are within 5 calendar days of either:

 

• The first day of the interruption to earnings
• The day the employer learnt about the upcoming interruption  

 

If you are preparing an electronic ROE, the filing deadline is whichever of the following comes first: 

 

• 5 calendar days after the end of the last pay period
• 15 calendar days after the first day of the interruption to earnings 

 

Web ROE 

 

All employers should sign up for Web ROE. This allows you to file and amend ROEs electronically. It is the faster, and more efficient way to do ROEs. You can find a link to Web ROE here. 

 

If you have any questions, you can contact the Service Canada Employer line at 1-80-367-5693. Or talk to your accountant or bookkeeper.