Wage Subsidy

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 21st have been released to the public.


The periods are as follows:

  1. July 5 to August 1 –Opened up for filing on August 17 2020
  2. August 2 to August 29 – Will open up for filing September 2 2020
  3. August 30 to September 26
  4. September 27 to October 24
  5. 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.