Amid the challenging times brought on by the COVID-19 pandemic, the Canadian government introduced several relief programs to support businesses. In this blog post, we’ll delve into four essential programs: the Canada Emergency Business Account (CEBA), the Canada Emergency Wage Subsidy (CEWS), the 10% Temporary Wage Subsidy, and the Canadian Emergency Commercial Assistance Program (CECRA).
Subsidy Bookkeeping: CEBA, CEWS, CECRA
The Canada Emergency Business Account (CEBA)
The CEBA provides interest-free loans of up to $40,000 to small businesses, with 25% of the loan (up to $10,000) being forgivable if repaid before December 31, 2022. We’ll explain eligibility criteria and outline the steps to properly record the loan in your accounting system.
The Canada Emergency Wage Subsidy (CEWS)
The CEWS offers eligible employers a subsidy of up to 75% of employee wages if their businesses have experienced revenue declines. We’ll discuss how to determine eligibility and provide a step-by-step guide to recording the wage subsidy in your financial records.
The 10% Temporary Wage Subsidy
Designed to help eligible employers reduce payroll deductions, this program allows a subsidy of 10% of remuneration paid from March 18, 2020, to June 19, 2020, up to $1,375 per eligible employee. Our blog post will walk you through calculating the reduction in source deductions and recording the subsidy accurately.
Canadian Emergency Commercial Assistance Program (CECRA)
CECRA provides rent relief of 75% to affected businesses, with the government and landlords covering 75% of the rent payment while the tenant covers 25%. We’ll discuss eligibility requirements and guide you on recording the subsidy or rent refund in your financial statements.
Conclusion:
With numerous financial relief programs available, navigating the intricacies of each can be overwhelming. Our comprehensive guide will equip you with the knowledge and steps needed to make the most of these vital COVID-19 support programs. Remember to carefully review eligibility criteria and seek professional advice to ensure accurate recording and compliance with reporting requirements. Together, we can overcome these challenging times and build a resilient future for businesses in Canada.
