In order to encourage the hiring of apprentices in certain trades, employers are eligible for the apprenticeship job creation credit if they hire an “eligible apprentice”. The credit for a taxation year equals the lesser of $2,000 and 10% of the “eligible salary and wages” payable by the employer to the eligible apprentice for the year in respect of the eligible apprentice’s employment in Canada in the year.
Any unused credit may be carried back 3 years and carried forward 20 years.
An “eligible apprentice” is an individual who is employed in Canada in a prescribed trade during the first 24 months of the individual’s apprenticeship contract that is registered with the government under a program designed to certify or license individuals in the trade. The prescribed trades for these purposes are the “Red Seal” trades for a province under the Interprovincial Standards Red Seal Program (see red-seal.ca).
The “eligible salary and wages” payable are the salary and wages payable by the employer to the eligible apprentice for the first 24 months of the apprenticeship, but not including bonuses, remuneration based on profits or certain taxable benefits.