Hiring a student? How wage subsidies work in Canada

A student wage subsidy is money that covers part of what you pay a student you hire. In Canada, the best-known options are Canada Summer Jobs for summer roles, the Student Work Placement Program for co-op and work-integrated learning placements, and Mitacs internships for research and business strategy projects. The one rule they share: apply and get approved before the student starts.

What is a wage subsidy, exactly?

A wage subsidy is a form of funding where a program pays back part of the wages for a specific new hire. You still hire the person, run payroll and supervise the work. The program then reimburses some of the cost, usually after you send a claim with proof that the wages were paid.

It is not a loan, and you don't pay it back if you follow the agreement. But it is also not money handed over up front for anything you like. It is tied to one job, one person (or one position) and a set period. If you want to see how this compares with other funding types, read grant, loan or tax credit?.

Which student hiring programs should I know about?

Each of these works differently. Check each program page for the current amounts, dates and rules.

• Canada Summer Jobs is a federal program that helps employers create summer jobs for young people. Not-for-profits, public sector employers and small private businesses can apply. There is a yearly application window, and it closes well before summer, so plan ahead.
• Student Work Placement Program helps employers hire post-secondary students for work placements, such as co-op terms and internships. You don't apply to the government directly: you apply through one of the program's delivery partners, which are often industry organizations.
• Mitacs Accelerate funds research internships where a graduate student or postdoctoral researcher works on a project with your organization. Your organization contributes part of the cost and Mitacs adds funding on top. It suits businesses and non-profits with a real research question.
• Mitacs Business Strategy Internship pairs your organization with a post-secondary student to work on a business problem, such as a market plan, a process change or a digital project. Your organization pays a share and Mitacs covers the rest.

Why must I apply before the student starts?

Almost every wage subsidy pays only for work done after you are approved. If you hire first and apply later, the wages already paid usually can't be claimed. This is the same rule that applies to most Canadian funding: read apply before you spend for the full picture, and see retroactive costs in the glossary.

In practice, that means:

1. Find the program and confirm you are eligible.
2. Apply during the intake window (or any time, if it is a continuous intake).
3. Wait for the approval or agreement.
4. Then post the job, hire and start the student, following the program's rules on dates.

Who counts as a student?

Each program defines this itself. Some are for young people in general, some require enrolment at a college or university, and some are for graduate students only. Age limits, enrolment status and citizenship or work permit rules vary. Read the eligibility section on the program page, and see our guide on how to read eligibility rules.

What paperwork will I need?

Expect to keep:

• the approval letter or agreement, and any conditions in it
• the job description and the student's start and end dates
• payroll records showing hours and wages paid, with deductions
• proof of the student's eligibility, if the program asks for it
• any reports the program asks for at the end

Clean payroll records make claims much easier. Our post on getting paid: claims and reports explains what usually happens after the job ends.

Can I combine a student subsidy with other funding?

Sometimes. Many programs limit how much public funding can go toward the same wages, and some say you can't use two subsidies for the same position. This is called stacking. Read can you combine grants? and always declare other funding on your application.

Where can I see what's open now?

Use the funding check to see programs that fit your organization, browse hiring programs, or look at what is closing soon. For a deeper look at every kind of hiring support, read the guide to wage subsidies and hiring programs.

Frequently asked questions

Can I get a wage subsidy for a student I already hired?

Usually not for work done before approval. Most programs pay only for wages after the agreement starts. Some programs may allow a current student under specific conditions, so check the program page before you assume either way.

Do I have to pay the subsidy back?

Not if you follow the agreement. If the job doesn't happen, ends early, or doesn't match what you were approved for, you may receive less or have to return part of the money.

Is the subsidy taxable?

Government assistance can affect your taxes, for example by reducing the wage expense you deduct. Ask your accountant how it applies to your situation.

Can a non-profit hire a student with a subsidy?

Yes. Several student hiring programs accept not-for-profit organizations, and some give them more favourable terms. See funding for non-profits.