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About the hiring credit for small businesses (HCSB)

The hiring credit for small businesses (HCSB) is a one-time credit that small business owners receive if they're eligible. The credit is paid up to $1000 based on the increase in an Employer's EI premiums paid in 2011.

Here's a few other things you should know:

  • Once you submit your T4 Summary, the CRA calculates the amount of the credit.
  • This credit is applied to the payroll account for amounts over $2.00 and up to $1000.
  • The HCSB is applied to any outstanding balance of the payroll accounts and any balance is transferred to the current year.
  • The Statement of Account will identify how the credit was applied.
  • This is considered business income which can be used to reduce your EI Expense (Payroll Expense).

For more information on the HCSB, visit the CRA website.

In QuickBooks

Don't enter a liability adjustment for the credit received. Instead, claim the credit as you pay your payroll liabilities.

  1. Open the Pay Liabilities window.
  2. Select the liabilities that are to be paid.
  3. Select Review liability cheques to enter expenses/penalties.
  4. Click Create.
  5. Click the Expenses tab.
  6. Select the account used to track your EI Employer expenses. By default this is the Payroll Expenses account.
  7. Enter the amount of your credit as a negative value.
  8. Enter a Memo (optional).
  9. Click the Recalculate button to reduce the amount of the liability cheque.
  10. Click Save & Close.

Note: Your PD7A report won't match the payrment you're sending. The CRA will match up your credit to your remittance to balance things.

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