COVID-19: How to Pay Staff - Wage Subsidy Scheme Ireland

However, should a business be in a position that it can continue to operate, there are alternatives such as reduced working hours, working from home benefits and wage cuts. The government and other governing bodies have introduced a number of subsidies and aids to mitigate the long term effects of Coronavirus on businesses and where possible, ensure they can continue to operate. This includes a wage support scheme that will allow businesses pay employee wages up to 70% for the next 12 weeks. Read all the information you need to know as an employer on this scheme below.  

Disclaimer: Occupop is not a governing body or financial institution, this information has been collated from gov.ie, revenue.ie and various financial experts as at date of publication and is subject to change. Any information provided here is intended to inform rather than advise.

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How to support staff wages during Coronavirus - Wage Subsidy Scheme

As of Thursday, 26th March 2020, a new temporary wage subsidy scheme has been passed into law by the Irish Government which will be administered by Revenue. These figures have been updated in light of the progressing situation and should you have previously applied for the COVID-19 refund scheme, it will be automatically updated and there is no need to register again. 

The Wage subsidy Scheme will provide the following support/refund to employers:

• Refund up to 70% of the net pay of an employee earning up to €38,000 per annum, gross pay.  Limited to €410 net pay per week.
• A refund of €350 net pay of an employee earning between €38,000 and €76,000 per annum gross pay
• Refund applicable to those earning over €76,000 per annum gross pay prior to COVID-19 but their salary has subsequently fallen below €76,000, ensuring a maximum net weekly pay of €960 isn't exceeded.*
• The employee must also have been on the payroll as at 29th February 2020

* Qualification and calculation are as follows:

• less than 20%, no subsidy is payable
• between 20% and 39%, a subsidy of up to €205 is payable
• 40% or more, a subsidy of up to €350 is payable
• Subsidiary payment is calculated referencing the weekly net payments to employee's for January & February 2020 and the gross pay being made by the employer.

How businesses qualify for the wage subsidy scheme: 

The Scheme is available to employers from all sectors whose business activities are being adversely impacted by the COVID-19 pandemic. You must qualify for all of the below to be eligible for this scheme.

• If you are experiencing significant negative economic disruption due to COVID-19
• There is at least a 25% reduction in turnover between 14th March 2020 and 30th June 2020 
• You are unable to pay normal wages and normal outgoings in full
• You intend to retain your employees on the payroll

Points to note on the wage subsidy scheme: 

• No tax or PRSI is payable on this subsidy amount 
• Employers can top up the payment as needed
• An employee cannot receive more net pay under this scheme than they would normally have received before this scheme 
• Top up amount will be taxed as normal

Wage Subsidy Scheme payment dates:

This scheme comes into effect on Friday 27th March 2020. All refunds will be processed by Revenue within 2 days of your payroll submission.  

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How to apply for the wage subsidy scheme: 

This can be done through the Revenue website. If you do not manage your online ROS account, contact your accountant or financial adviser. 

1. Login to ROS, myEnquiries and select the category COVID-19: Temporary Wage Subsidy.
2. Read the COVID-19: Temporary Wage Subsidy Self-Declaration and press the Submit button.
3. Ensure bank account details on Revenue records are correct. These can be checked in ROS and in Manage Bank Accounts, Manage EFT, enter the refund bank account that the refund is to be made to.

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We will be posting up regular updates and information for businesses, employees and the self-employed in regard to the Coronavirus. Follow us on LinkedIn to ensure you don't miss out on these updates. 

For advice on everything financial and COVID-19 related for businesses, we recommend using the TaxAssist COVID-19 content hub. TaxAssist are a full service accountancy service that focus on helping SMEs.