EI Hiring Credit for small business extended to 2012
Given the increases in Employment Insurance (EI) in 2011 and 2012, CFIB's top budget request has been for an EI credit for employers to encourage new hiring and offset increasing payroll taxes. We succeeded! Now, firms with up to $10,000 in EI premiums can receive a one-time credit of up to $1,000.
The EI Hiring Credit was first introduced by the Federal government in the March 2011 Budget for one year and was extended another year in the March 2012 Budget.
Here are some benefits of the one-time credit:
- No new paperwork: Canada Revenue Agency (CRA) will automatically credit back the money upon the filing of your T4 information return.
- No extra tracking required: the credit is based on the employer's overall increase in EI premiums compared to those paid in the previous year.
- Help to hire or deal with additional costs: This credit is available for any increase in EI premiums. Examples could be: adding one new $39,000 per year job without paying any EI on that new position, increasing payroll or just dealing with the hike in your EI bill due to the 2011 or 2012 rate increases.
New! This year, for the first time, businesses eligible for the 2012 EI Hiring Credit may elect to receive an actual refund for the funds remaining after the outstanding balance in their payroll account has been paid off. This process will be expedited if the business owner signs up for direct deposit with CRA. However, it is also possible to request a cheque. Business owners can opt to receive the refund through My Business Account or by contacting CRA by phone or in writing.