Hiring Credit for Small Business

What is the Hiring Credit for Small Business?

In 2011, the federal government created the Hiring Credit for Small Business (HCSB) to stimulate new employment and support small businesses.

The HCSB is designed to give small businesses relief from the employer’s share of EI premiums. Small businesses can be eligible to receive a credit of up to $1,000 on their payroll deductions account.

Does your business qualify for the HCSB?

As per the CRA website, you are eligible for the HCSB credit if you meet all of the following conditions:

• you deducted EI premiums from the remuneration you paid to your employees, or paid the worker's share of EI premiums for barbers, hairdressers, fishers, or drivers of taxis and other passenger-carrying vehicles and you remitted these premiums (along with your share of EI premiums) to your payroll (RP) account;
• you reported the income and deductions on a T4 slip and filed this information on your RP account for 2011 (see Note below) and 2012;
• the total of employer EI premiums you paid for 2011 (see Note below) was $10,000 or less; and
• your total employer EI premiums increased in 2012

How is the HCSB credit calculated?

CRA will automatically calculate the credit amount for all businesses that are eligible. You do not need to apply for this credit.

CRA will use the EI information from the T4 slips you filed to determine the credit amount your business is eligible for. As per CRA, “the amount of credit is the difference between the employer’s portion of the EI premiums you paid in 2011 and 2012.”

New businesses started in 2012 are also eligible for the HCSB. CRA will use a zero value for the 2011 EI premiums when calculating the HCSB for 2012.

Note: self-employed individuals who pay EI premiums on their earnings are not eligible for the HCSB