In case you missed our press release and email to customers, please note that PayTickr will be waiving fees for March 2020 to help our customers deal with the financial setbacks of the COVID-19 pandemic. We hope everyone is staying safe and healthy at this time, and make sure you take a moment to review this page and understand how the actions the Canadian Government is taking can be used to assist yourself, your company, and your clients to manage this economic crisis.
One of the relief measures Canada has unveiled to help small businesses keep their employees is the temporary wage subsidy. Please review Question 2 on that link to ensure you/your client’s company is eligible. This subsidy states that for eligible companies, up to 10% of an employee’s gross pay can be deducted from the amount of taxes that must be remitted to the government by the company on behalf of that employee for any payroll runs between March 18th and June 20th. However, the total amount of this subsidy is limited to $1375 per employee and $25,000 for the entire company. One other less-talked about aspect is that if 10% of the employee’s gross pay is less than the amount of income tax to be remitted for that payroll run (and the company has not hit the mentioned caps), that subsidy can be applied to future payroll runs.
To help you calculate this subsidy, we’ve put together a calculator that you can use to manually track how much of this subsidy should be applied to a payroll run. However, if you’re using PayTickr for your payroll runs we can automatically do that tracking for you. We’d like to use this blog to show we’re tracking and displaying that in PayTickr.
How It’s Setup
First off, the subsidy will be applied at each payroll run. After you run a payroll on the eligible dates (or with remaining subsidy to be used) you will be prompted to choose whether to apply the subsidy for that payroll run:
If you’re not sure about whether you qualify at payroll run or get clarification about the eligibility rules at a later time, you can later adjust whether the wage subsidy is applied by clicking the “Change COVID-19 Subsidy Status of Selected Pay Stubs” from the “See Payroll Runs” page. When the subsidy is applied (either at payroll time or after the fact) we calculate how much of the subsidy is used yet and apply either 10% of the gross pay or the remaining amount under the cap to these payments.
How It’s Displayed
After the subsidy is applied to a payroll run it is displayed in three places: Telpay Direct Deposit export process, PD7A reports, and payroll reports. When you make a Telpay Direct Deposit export and get to the CRA information step (after choosing which remittances to apply), the tax will be adjusted by the subsidy, and you will see an alert showing much income tax is not being remitted due to the subsidy:
The PD7A will work identically, with the income tax to be paid reduced by the COVID-19 subsidy and an alert showing how much it was reduced by. Since we split the PD7A into federal and provincial tax, we apply the subsidy first to federal tax and then to provincial tax if the subsidy is higher than the federal tax.
Lastly, two new fields are available in payroll reports. These two fields are “COVID-19 Temporary Wage Subsidy Applied” and “COVID-19 Temporary Wage Subsidy Accrued”. The applied field will show how much of the subsidy was applied to each payment or employee in the report. The accrued field will show much of the subsidy was accrued but not paid on that payment (see next section for more details). Note: The income tax deducted fields will not change due to the subsidy because the amount deducted from employee wages has not changed.
If 10% of the gross pay is higher than the income tax deducted on a payroll run (and the employee and employer caps have not been reached) that subsidy can be accrued and applied to future payments. PayTickr will keep track of any of these accruals, and they can be displayed in payroll reports and also viewed in the “Manage Accruals” page. Each employee will now have a row on this page displaying how much of the subsidy they have available to be applied to future payments. When an employee has accrued this subsidy, it will be automatically applied to their next payroll run where it can be used (e.g. the next payroll run where the income tax is less than the subsidy “earned” on that payroll run).
If you have any questions about how we’re implementing this subsidy in PayTickr or anything else feel free to send us an email at email@example.com. We wish everyone the best in this difficult time.