How do you record the 75% Wage Subsidy from the government properly? I have heard multiple answers, record as revenue or record as sub-wages. Step by step process please

Hello lisa122,

I appreciate how important it is to properly allocate and record amounts for your business in your books. QuickBooks Online strives to give you the tools to accurately do so, and I'll point you in the right direction for learning how to record the Canada Emergency Wage Subsidy in the program.

The 75% CEWS subsidy calculations and implementations take place outside of QuickBooks Online. Since there is no need to configure the program a certain way in order to have the CEWS calculations take place in your books, there isn't a step-by-step article provided by QuickBooks for this subsidy like there is the 10% subsidy.

For your reference, here's more information about the CEWS 75% subsidy.

• Canada Emergency Wage Subsidy (CEWS)
• Frequently asked questions - Canada emergency wage subsidy (CEWS)

• Calculate your subsidy amount

In light of that, we recommend that you speak with an accountant or bookkeeping professional if you need assistance with determining how to enter this.

QuickBooks Online helps you connect with an accountant in a couple of ways by using the My Accountant tab. There, you can invite an accountant you're already working with as a user to your QuickBooks, which gives them direct access to enter and make changes to your books as needed. That tab also has the Find a pro to help button that provides you with a list of accountants near you that have QuickBooks certification, which gives them the extra edge of knowing how to navigate the program.

All the best to you!

Not helpful. 

Hi kzurowski. I appreciate you reaching out on this post. I'd be happy to help you get back on track. Let me know if you're stuck somewhere, I'm here to assist. 

An actual quick answer on how to record the CEWS cheques from CRA would be helpful.

Hi AlK1. Thanks for contacting us here. It's vital you're able to record the CEWS cheques correctly and I'll be happy to give you hand. Before we get started, have you tried following the info provided above by my colleague, LauraAB? Let me know where you'd like for me to elaborate on, I'm here to help. 

The CEWS is neither operating income nor "wages".  It is considered to be Other Income and should be recorded as such.  That way, it shows up at the bottom of the financial statement and is not confused with operating income / sales.  I created an Other Income type account, calling it Canada Emergency Wage Subsidy (CEWS).

I did my entries as follows:

1.  Create a JE dated the last day of the period for which the claim applies:

CR     Other Income Account

DR     Accounts Receivable (populate name field with a customer name - mine is called "Receiver General - CEWS"

In the 'Number' field of the JE, I wrote Period 1 CEWS, Period 2 CEWS, etc.

Do one of these journal entries for each period of the CEWS that you are claiming.

2.  When you receive the money from CRA, do a Receive Payment to your "Receiver General - CEWS" customer.

The accounting for this goes as follows:

DR   Undeposited Funds Account

CR   Accounts Receivable ("Receiver General - CEWS" customer)

3.  Go to Make Deposit.  Deposit your CEWS payments exactly as they are going into the bank so you can track them.  I never deposit lump sums that don't match the bank statement - it can be very difficult to sort out what makes up those lump sums if you ever need to.  The final accounting is done in this step:

DR    Bank Account

CR    Undeposited Funds

Conversely, if you cannot go back and make JE's dated in prior periods (depends how fussy you are about closing out each month), then make one large journal entry dated as early as you can make it, with one line for each Period so you know what you are claiming in each period.

This should help you complete the transactions for the CEWS.  Good luck!

Thank you!  That was very helpful.