Small Business Job Credit

September 11, 2014

 

Small Business Job Credit

 

Ottawa, ON – Recently, the Federal Government announced the introduction of the new Small Business Job Credit; a credit that is expected to save small businesses more than $550 million over the next two years.

 

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% of all EI premium-paying businesses in Canada (approximately 780,000) will receive the credit. Overall, this will reduce EI payroll taxes by nearly 15%.

 

Within the framework of EI premiums and payment, employers pay 1.4 times the legislated rate. Therefore, the 28-cent reduction ($1.88 to $1.60) is the actual equivalent of a 39 cent reduction per $100 of insurable earnings.

 

In addition, all employers and employees will benefit from a substantial reduction in the EI premium rate in 2017 when the new seven-year break-even rate-setting mechanism takes effect. Ultimately, this will ensure that EI premiums are no higher than needed to pay for the EI program over time.

 

“I am very pleased to see that the Federal Government is introducing the Small Business Job Credit which will significantly benefit small businesses in Bruce and Grey Counties and indeed businesses across the country,” said Larry Miller, MP for Bruce-Grey-Owen Sound. “Particularly in rural areas, small businesses are a key driver of the local economy. This credit will go a long way in keeping our local businesses strong and competitive.”

 

The Canada Revenue Agency will automatically calculate the credit on a business’ return. This will ensure that there is no new paper burden imposed on business owners.

 

For more information on the Small Business Job Credit please visit; http://www.fin.gc.ca/n14/14-120-eng.asp.

 

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