You will be asked whether an employee is arm’s length or not when you calculate your subsidy amount, because the subsidy is calculated differently for eligible non-arm’s-length and arm’s-length employees.

Arm's-length employees

For most small businesses, workers are usually arm’s-length employees unless they are an owner or an owner’s family member.

Non-arm's-length employees

In a small business, a non-arm’s-length employee would most often be:

• a business owner
• a member of an owner’s immediate family (for example, a spouse, parent, child, sibling, grandparent, or grandchild)

It’s possible (but less common) for a non-arm’s-length employee relationship to exist between unrelated people, depending on the circumstances.

If you’re not sure about whether an employee is considered arm’s length or non-arm’s length, or have a business involving more complex control (like a corporation, trust, or partnership), you can read more about specific relationships that are considered non-arm’s length.

Only eligible remuneration paid for weeks where your employees were active are considered in your CRHP calculation. This includes calculations for the base period (March 14 to April 10, 2021) and the claim period remuneration.

Active employees

Are employees who worked for any part of a week during the claim period.

Employees on leave with pay

Are employees who were temporarily furloughed for one or more full weeks in the claim period but were still receiving pay for those weeks. To be considered on leave with pay for a week within a claim period, an employee must:

• not have worked at all during the full week
• not have been on paid absence (such as vacation leave, sick leave, or a sabbatical)
• have received full or partial pay from you for the week
• have been in an employer-employee relationship with you at the time (they were not terminated)

Whether an eligible employee is active or on leave with pay is determined on a week-by-week basis and used in the online calculator and downloadable spreadsheet.

For all eligible employees, you will need to know how much eligible remuneration you paid them in respect of each week in the claim period. They must have received their pay before you apply for the subsidy.

If your pay schedule doesn’t align with the claim period dates, you will have to manually calculate how much you paid the employee in respect of each week. It doesn’t matter whether the employee receives their paycheque at the end of the week, at the end of the month, or another time, as long as you use the actual amount they were paid that relates to that week. You can’t use an average of daily wages.

If you pay employees weekly or bi-weekly, you can use the calculator spreadsheet to enter your employees’ pay.

Read about how to calculate weekly remuneration for different payroll schedules in the CEWS FAQs

For the CRHP, you only need to calculate pre-crisis pay for non-arm's-length eligible employees.

Pre-crisis pay (baseline remuneration) is an average amount of eligible remuneration the employee received in a week during a specific period before March 15, 2020.

There is more than one pre-crisis pay period option you may use when calculating an employee’s pre-crisis pay for a claim period. To get the most potential benefit, choose the pre-crisis pay period that has the highest weekly average for that employee.

If you have hired new eligible employees who did not work for you prior to March 15, 2020, their pre-crisis pay will be $0.

Calculate the pre-crisis pay amount

1. Total all the remuneration paid to the non-arm's-length employee during the chosen pre-crisis pay period
2. Divide the total pay by
   • the number of weeks or partial weeks to which the total pay relates^{Footnote 1}, minus any period of 7 or more consecutive days for which the employee was not paid