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Level 1

# How do I calculate the 75% wage subsidy for employees paid at the end of the month? For the average biweekly gross from jan1-mar15 would I add jan+feb+ (mar divide by 2)?

Employees were paid in march on march 28. Would I then divide by 11 weeks? I also do not understand the biweekly gross pay in respect of the claim period. Do I only include payments during the claim period? Or divide the monthly pay for the claim period?
Level 8

## How do I calculate the 75% wage subsidy for employees paid at the end of the month? For the average biweekly gross from jan1-mar15 would I add jan+feb+ (mar divide by 2)?

Hello @brandon_kijiji ,

https://quickbooks.intuit.com/learn-support/en-ca/covid-19/temporary-wage-subsidy-for-employers-how-...

Good luck!

Level 2

Level 8

## How do I calculate the 75% wage subsidy for employees paid at the end of the month? For the average biweekly gross from jan1-mar15 would I add jan+feb+ (mar divide by 2)?

Hello @brandon_kijiji ,

You may have already got this straightened out since your post was some time ago.  But with the newer CEWS 2.0 now out, I thought this post might help someone.

Since I posted last about the subject of CEWS, I've spent a lot of time studying it and working with our external accountant, EY, and have found out quite a bit more information.  CRA has not made this easy, and as you know, have now made things even more complicated with CEWS 2.0.  One of the biggest areas of confusion most people are having is how to calculate the baseline earnings.

The calculation of the baseline earnings is as follows:

1. Create a report that encompasses all pay periods paid between Jan 1 and Mar 15. (not days or hours worked during this period, but pay cheques paid in this period!)
2. Determine the total number of weeks that fall within this period.  For example, I had 6 bi-weekly pay periods fall within this period, so total number of weeks was 12.
3. Divide the total gross wages (not including any non-cash taxable benefits such as RRSP or Group Insurance) by the # of weeks to arrive at the average weekly remuneration per employee.
4. Exceptions will be employees who received no remuneration for periods of 7 days or more (or 5 working days if you are on Monday to Friday - I found it easier this way).  If this is the case, you must reduce your denominator accordingly for affected employees.  Example:  Out of a total 60 working days in this period (12 weeks x 5 working days per week = 60 days), John was not paid at all for 10 days, so was only paid for 50 out of the 60 days.  Divide 60 / 50 = 1.2.  Deduct 1.2 from 12 weeks = 10.8 weeks.  To come up with your average weekly weekly baseline remuneration for this employee, use total earnings (as above) over the time period and divide by 10.8 weeks instead of 12 weeks.  This results in a more 'fair' calculation for this employee than dividing by 12.

Now, with CEWS 2.0, you have the option of using a different time period for the baseline remuneration, if it works out more favourably for the employee.  In my situation, we started off 2020 much slower than we did 2019 so our employees (hourly workers) had a much higher income at the beginning of 2019 then in 2020.  I used one of the alternative time periods as it worked out much better for our hourly employees.  Salaried employees weren't affected so I continued to use Jan 1 - Mar 15, 2020 for them.  Here are the new 'pre-crisis periods' that CRA is allowing:

Claim period Pre-crisis pay period options (number of days in period)

 Periods 1 to 3 January 1 to March 15, 2020 (75 days)March 1 to May 31, 2019 (92 days) Period 4 January 1 to March 15, 2020 (75 days)March 1 to May 31, 2019 (92 days)March 1 to June 30, 2019 (122 days) Periods 5 and later January 1 to March 15, 2020 (75 days)July 1 to December 31, 2019 (184 days)

For each claiming period, determine which pre-crisis period works best for each employee to ensure you get the maximum subsidy.  Just keep very good records so you can prove your calculations in case of audit, which is almost a sure thing.

As far as my spreadsheet is concerned, although it is completely accurate, I am now pointing people to CRA's spreadsheet as it leaves nothing to guesswork.  You can go through the entire claiming process from this website:  https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy.html

There are both online and spreadsheet calculators where you choose specific claiming periods and it will make the calculations for you, after you have entered the comparable company revenues to determine whether your business qualifies.  Just go through it step by step.  I used the calculation spreadsheet because I can save it and keep it with my records.

You will not be able to (necessarily) use your actual pay periods to calculate the subsidy itself.  The subsidy is based on exactly what the remuneration is from the first day to the last day of each claiming period.  Our bi-weekly pay periods did not match the CRA's claiming periods so I had to pull reports of all payable hours worked on those exact days, by week.  I used CRA's SS and added four or five columns to the right of it.  In the first column, I put each person's equivalent hourly wage.  In the next four columns, I entered how many hours each person had worked in Week 1, Week 2, Week 3 and Week 4.  Then I used a formula to multiply each person's hourly wage by the weekly hours and it populated the spreadsheet instead of me having to do a manual calculation and enter the actual \$ in the spreadsheet. Then the subsidy calculates on it's own.  Note that if your bi-weekly periods match the claiming periods perfectly, you can use your payroll run information and use Tab 3 (Step 2b) to enter your employee info.

Tab 1 to determine whether drop in revenue qualifies you for subsidy:

Tab 2 - Subsidy Calculation

Tab 5 (Step 4)

Amount of Subsidy is calculated for you:

This is not the end, though.  When you walk through the steps on that web page link, you will have to make adjustments to this amount if you have already claimed the 10% payroll remittance reduction or your employees were on work sharing, etc.  Once you reach the end of all that, you will have the net wage subsidy amount you will get for that period.  Whew!  Trust the federal government to come up with such a convoluted plan!  LOL

Best of luck to you!

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