PLEASE NOTE THIS SCHEME HAS NOW ENDED.
The Government has announced a more enhanced scheme for employers and employees who are facing difficulties as a result of the COVID-19 outbreak.
This new scheme is called the 'Temporary Covid-19 Wage Subsidy Scheme' and takes effect from Thursday 26th March 2020.
This replaces the previous Employer Covid-19 Refund Scheme.
Comprehensive Revenue guidance on the Temporary Covid-19 Wage Subsidy Scheme can be found here
We have summarised the key points of the Scheme below.
To qualify, employers:
The Scheme is restricted to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 and 15 March 2020
Where employers didn't fulfil their PAYE reporting obligations for February 2020 by 15 March 2020, please click here for further information.
See Revenue guidance on employer eligibility and supporting proofs here
The scheme is to be run in two phases:
(employees with an average net weekly pay greater than €960 will be excluded from the subsidy scheme - please refer to 'Employees whose average weekly pay is higher than €960' below for recent changes)
Phase 2 of the Wage Subsidy Scheme has been announced to take effect from 4th May.
We are currently in a consultation phase with Revenue and will provide more information on how phase 2 will operate in due course.
In the meantime, general information regarding Phase 2 can be accessed here
In order for Revenue to recognise employees being paid under the scheme, they have requested that PRSI Class J9 is used.
a) Within the employee's record, select PRSI class J9 within their Revenue Details utility.
An information page will appear for you to read - click 'OK' to proceed, followed by 'Update'.
b) Now access Weekly/Monthly/Fortnightly Input and select the employee.
c) Click into their Additions utility.
d) The calculator will now ascertain what the refundable payment amount is, based on the employee's average periodic net pay during January and February (and taking into account the capped payment thresholds).
Should you be in a position to be able to top up this payment, the calculator will also calculate the maximum top up amount you can give without affecting your subsidy.
Important notes regarding the calculator
e) Click Accept to proceed.
f) Read the prompt and click OK
The Periodic Input screen will now populate with the applicable non-taxable pay amount and it will also populate the employee's basic pay with the amount of the maximum top up:
g) If you don't wish to make a top up payment, it is important to change the basic pay amount to €0.01 - this will act as a notional gross pay amount in order to generate a payroll submission:
Please note: All other payments, benefits and deductions will be zero-ised.
h) Click 'Update File' to save your changes and repeat the process for further employees, if required.
On updating your payslips, the above will now flow through to the payroll submission (PSR) for submission to Revenue.
Where it is ascertained that an employee's average net pay for January and February exceeds €960 per week, it will be brought to your attention that the employee does not qualify for the subsidy when you query the potential Covid-19 refund:
Please note: From 16th April 2020, the wage subsidy is available to support employees where their average weekly net pay was greater than €960. In order to avail of the scheme, the employee's earnings must be reduced.
Where the employees earnings have now been reduced by:
To enter the subsidy for these employees, please close the calculator and enter the subsidy payment and gross pay manually.
Using the example above, the gross pay should be entered as €610 and the wage subsidy figure should be entered as €350. The combined pay cannot exceed €960.
Please note: if the employee isn't eligible because the earnings don't qualify, please change the employee's PRSI class back to their regular PRSI class e.g. PRSI class A1.
In many cases the payment of the Temporary Wage Subsidy and any additional income paid by the employer will result in a tax/USC refund to the employee. Any tax and USC refunds that arise can be repaid by the employer and Revenue will also refund this amount to the employer.
**In this instance, the Tax Details Report within Thesaurus Payroll Manager will not match the Revenue statement. In this case, the Revenue Statement will be correct as Revenue will account for the refunds.
Employers must not operate this scheme for any employee who is making a claim for duplicate support (e.g. Pandemic Unemployment Payment) from the DEASP. Where an employee previously laid off has been re-hired, the employee will qualify for the Subsidy scheme if their DEASP claim is ceased (see above).
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