Hiring Credit for Small Business

Economic Action Plan 2013 proposes to expand and extend the temporary Hiring Credit for Small Business.

The Government’s number one priority is creating jobs. In recognition of the important role that small businesses play as job creators in the Canadian economy, Economic Action Plan 2013 proposes to expand and extend for one year the temporary Hiring Credit for Small Business. This temporary credit would provide up to $1,000 against a small firm’s increase in its 2013 Employment Insurance (EI) premiums over those paid in 2012 to employers with total EI premiums of $15,000 or less in 2012. This temporary credit would be available to an estimated 560,000 employers, allowing these small businesses to reinvest approximately $225 million in job creation in 2013.

The Hiring Credit for Small Business (HCSB) was created with the intention of creating jobs, supporting small businesses and growing the economy. The HCSB gives small businesses relief from the employer's share of employment insurance (EI) premiums paid in a year. It does this by crediting up to $1,000 on the payroll account, based on the increase in an employer's EI premiums paid in one year over those paid in the year before. Small businesses are the engine of job creation in Canada and are indispensable in their role as job creators. In recognition of the challenges faced by small businesses across the country, Budget 2011 announced a one-year HCSB of up to $1,000 per employer whose total EI premiums were at or below $10,000 in 2010. This credit provided needed relief to small businesses by helping them defray the costs of hiring new workers and take advantage of emerging economic opportunities. As the economy continues to recover amid continuing global economic uncertainty, the Government of Canada has extended the HCSB for 2012, through the next phase of Canada’s Economic Action Plan.

About the Program

To encourage additional hiring by this vital sector, Budget 2012 extended the availability of the HCSB, which provides up to $1000, to offset a small business’s increase in its 2012 EI premiums, over those paid in 2011.

Who Is Eligible

The HCSB will be available to about 536,000 employers, whose total EI premiums were at or below $10,000 in 2011, reducing their 2012 payroll costs by about $205 million. That’s money that can then be re-invested in their business.

How It Works

You don’t need to apply for the HCSB. If you are eligible, the CRA will automatically calculate the credit using the EI information from the T4 slips you filed – no added paperwork or red tape!

Progress to Date

The HCSB is available for the 2012 tax year.

Find Out More

For more information, please the Canada Revenue Agency website or the Department of Finance.

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