Get A Free, No-Obligation Bookkeeping Estimate
Let us show you why we are among the Best Accounting Firms in Canada
Connect with Us Today for Business Account Services
Staying on top of your financials isn’t just good practice—it’s essential for keeping your business steady in uncertain times. With corporate tax deadlines and GST/HST remittances still in place, managing your finances carefully can help you avoid unnecessary stress while taking advantage of available government support programs like the Temporary Wage Subsidy (TWS) and the Canada Emergency Wage Subsidy (CEWS).
In this guide, we’ll break down the key measures you need to know, provide actionable advice, and answer common questions to help you manage your business effectively.
Your financial records are more than just numbers; they’re the foundation of your business. Keeping them organized ensures you:
- Have a clear understanding of your cash flow.
- Make informed decisions about expenses and investments.
- Stay compliant with government regulations.
Let’s take a closer look at the current tax requirements and the support programs that can make a difference for your business.
Tax Deadlines and Government Support Measures
GST/HST and Corporate Tax Filing
Despite recent challenges, GST/HST remittance and corporate tax deadlines remain unchanged. This means:
- You must continue to remit GST/HST by your regular remittance dates.
- Corporate tax filing deadlines are still in effect, so plan accordingly to avoid penalties.
Key Tip: Maintaining up-to-date books will help you meet these deadlines without surprises.
Deferred Income Tax Payments
To provide relief, the federal government has deferred income tax payments for amounts owed between March 18 and August 31, 2020. These payments are now due on September 1, 2020. This deferral applies to:
- Installment payments.
- Balances owing for income tax.
Additionally, new income tax and sales tax audits have been temporarily paused to ease the burden on businesses.
Understanding Wage Subsidies: TWS and CEWS
The TWS is a three-month program designed to help eligible employers reduce payroll deductions owed to the CRA.
- How It Works: Employers can claim 10% of the remuneration paid from March 18 to June 19, 2020.
- Limits: Up to $1,375 per eligible employee and $25,000 per employer.
- Eligibility: Most small businesses, nonprofits, and registered charities are eligible.
This subsidy directly reduces the amount of federal, provincial, or territorial income tax you need to remit to the CRA, helping to ease your financial load.
Canada Emergency Wage Subsidy (CEWS)
The CEWS offers even greater support, providing a 75% wage subsidy to eligible employers to help retain employees during difficult times.
- Coverage Period: The CEWS applies to wages paid during a specific period and is designed to support businesses that experience a significant revenue drop.
- Eligibility: Businesses, nonprofits, and charities meeting the revenue reduction criteria may qualify.
- Combining Benefits: You can use both the TWS and CEWS if eligible, but the benefits are coordinated to prevent double-dipping.
How to Prepare Your Business Financially
1. Stay Organized
- Use accounting software to track income and expenses.
- Regularly update your financial records to avoid last-minute rushes.
2. Take Advantage of Support Programs
- Check eligibility for wage subsidies like TWS and CEWS.
- Apply early to ensure timely financial relief.
3. Plan for Tax Obligations
- Set aside funds for GST/HST remittance and corporate taxes.
- Use the deferred payment deadline as an opportunity to strengthen your cash flow.
4. Seek Professional Help
If you’re unsure about tax compliance or eligibility for support programs, consult a professional bookkeeper or accountant. Their expertise can save you time and money in the long run.
FAQs
1. Can I use both the TWS and CEWS programs?
Yes, eligible businesses can take advantage of both programs. However, the benefits are coordinated to ensure no overlap in the subsidies claimed.
2. Do I still need to file my corporate taxes on time?
Yes, corporate tax filing deadlines remain unchanged, even if payment deadlines are deferred. Filing on time helps you avoid penalties.
3. How do I calculate the TWS amount for my business?
The TWS is equal to 10% of the remuneration paid to eligible employees during the program period, up to $1,375 per employee and $25,000 per employer.
4. What happens if I miss the GST/HST remittance deadline?
Missing the deadline can result in penalties and interest. Staying on top of your remittance schedule is critical for compliance.
5. Are there other government support measures available for small businesses?
Yes, there are additional programs, such as interest-free loans through the Canada Emergency Business Account (CEBA). Check the CRA or government websites for the latest updates.
Conclusion
Managing your business finances during uncertain times requires organization, awareness, and the right tools. By staying on top of your books, meeting tax deadlines, and leveraging wage subsidies like TWS and CEWS, you can navigate challenges with confidence. Remember, resources are available to support you—don’t hesitate to take advantage of them.