Did you know that the 2013 tax year gave many advantages to small businesses with employees? Small businesses that increased the amount of wages paid out on T4 Slips in 2013 are eligible for the extended Hiring Credit for Small Business (HCSB), which was laid out in the 2013 budget. This credit was designed to absorb some of the expenses paid out by smaller companies in the form of employer contributions to EI premiums. It’s an expansion of the program that was first instituted for the 2012 taxation year, and a limited-time offer, as the hiring credit will no longer be available in the current Federal budget.
The best thing about the HCSB is that businesses don’t need to do anything to claim it – it will automatically be processed by the CRA based on the EI premiums reported on T4 slips issued!
Eligible businesses are those with total EI deductions (the Employer component) under $15,000 who show an increase in premiums paid in 2013 over the previous year. Businesses that started operations in 2013 will have their 2012 contributions calculated as $0, in order to take full advantage of the credit.
The purpose of this credit is to promote hiring of new employees, or expanding the roles of existing part-timers. The government acknowledges that the employer contributions to EI represent a deterrent to business owners, and the HCSB has been established (and expanded) with the goal of fostering job creation.
For more information about the Hiring Credit for Small Business, visit the information page on the CRA website.