November 15, 2014
On September 11, the federal government introduced the new Small Business Job Credit program.

The Small Business Job Credit is a two-year measure that is intended to help small businesses by lowering their Employment Insurance (EI) premiums from the legislated rate in 2015 and 2016.

The Small Business Job Credit will effectively lower small businesses’ Employment Insurance (EI) premiums from the current legislated rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit. Almost 90 per cent of all EI premium-paying businesses in Canada will receive the credit, reducing their EI payroll taxes by nearly 15 per cent.

Ottawa says that the savings small businesses will realize from this measure will help them create jobs and growth, and support Canada’s sustained economic recovery in a time of ongoing global uncertainty.

You are eligible for this credit if you meet all of the following conditions in 2015 and/or 2016:
  • You deducted EI premiums from the remuneration you paid to your employees, and you remitted these premiums (along with your businesses’ share of EI premiums) to your payroll program (RP) account
  • You reported the income and deductions on a T4 slip and filed this information on your RP account for 2015 and/or 2016
  • The total of employer EI premiums you paid for all of your RP accounts in 2015 and/or 2016 was $15,000 or less.

Canada Revenue will automatically establish eligibility for 2015 and 2016 separately, based on the T4 information that you file for each of those years.

If eligible, Canada RA will automatically calculate the amount of your credit, and issues a refund using the EI information from the T4 slips you filed with your 2015 and/or 2016 T4 information returns. There is no application form to complete.

If you have more than one payroll program (RP) account under your business number (BN), the CRA will determine if you are eligible to receive a credit by adding the employer EI premiums for all RP accounts under that BN. The amount of credit that each RP account will receive is generally proportional to the amount of the employer’s EI premiums that was paid into each RP account.

If you receive the credit, you must report that amount as income or reduce your EI expense when you file your business return for the year in which you have received a credit, even if the CRA transferred some or all of this credit to pay off a debt.

More information is available on the Finance Canada website at http://gfl.me/x2jA.