Wage Subsidy Scheme Issues

The_Chap

fungie wrote: »

But they are doing that either way!

Ok I should have added “where possible”

Will23

Does anyone know of any online calculator to work out how this scheme works with the new changes announced this week?

It’s difficult to work out what the subsidy available for individuals might be as the references to sliding scale makes it confusing.

It would also be useful for people to be able to track their future tax liability if in the scheme so that they may put this aside week on week or month on month now, as it’s not really theirs to spend in a way!

Cheers.

gb19815

Can employer top up wage to 100% with cova payment?

Skihunta13

gb19815 wrote: »

Can employer top up wage to 100% with cova payment?

Yes to 100% of you average take home for January and February. Any top up over that the revenue reduce the subsidy by the same amount.

gb19815

Thanks

KilrushWinger

Hi,

Just wondering on how I would go about processing a redundancy at this time?
The one month redundancy notice has been given to the employee and they will be off the payroll at the end of April.
Reason for redundancy is the client they are working on has gone bust and no more work is available both now and in the future. The one month is abiding by the terms in their contract.

Should we have claimed the subsidy payment for this employee in March and April due to them technically not being kept on until the scheme technically ends on 18 June? I will organise payment back to Revenue if I'm in the wrong.

Thanks

collsoft

Hi All,

Just to keep the "Ban Hammer" "Gods" happy I will declare that I am Jason Collins, the owner of CollSoft Payroll.

A couple of days ago a post asked if there was any online calculators available (Will23 Post #393) and I answered the question Honestly.

I dont know why my answer has been deleted, but I note that it has.

There is not much point in me in answering questions here if they are just going to be deleted by admins.

Sorry I cant hep anymore - good luck understanding TWSS Phase 2

IRtax

You should probably put yourself on week one tax basis to stop getting tax refunds. Yes this system was rushed through by the government they should have worked off gross pay not net. Going to lose approximately €100 a week in the scheme by the end of it.

The 0.01 gross pay is a requirement in payroll software to be able to process the subsidy payslip

stupidskin wrote: »

I've just seen my payslip and as with everyone else am totally confused, I've received the full covid subsidy payment plus .01 from employer and then then a large enough negative tax figure which increases the NET takehome. This has me confused, how will all this balance with regards taxation at year end ? SS

stupidskin

I appreciated last post for one and am looking to the new revo of the calc when it is ready.. thanks !

stupidskin

I appreciated last post for one and am looking to the new revo of the calc when it is ready.. thanks !

collsoft wrote: »

Hi All,

Just to keep the "Ban Hammer" "Gods" happy I will declare that I am Jason Collins, the owner of CollSoft Payroll.

A couple of days ago a post asked if there was any online calculators available (Will23 Post #393) and I answered the question Honestly.

I dont know why my answer has been deleted, but I note that it has.

There is not much point in me in answering questions here if they are just going to be deleted by admins.

Sorry I cant hep anymore - good luck understanding TWSS Phase 2

Sono Topolino

IRtax wrote: »

You should probably put yourself on week one tax basis to stop getting tax refunds. Yes this system was rushed through by the government they should have worked off gross pay not net. Going to lose approximately €100 a week in the scheme by the end of it.

The 0.01 gross pay is a requirement in payroll software to be able to process the subsidy payslip

The Employee must do this through MyEnquiries -
payroll operator cannot do this at their end.

collsoft

Hi All,

As part of our development process we wrote an Excel VBA (Macro) function called CalculateWageSubsidy()

This is designed for the new rules that come into force from 4th May 2020, and are not suitable for use for any payrolls before that date - with one exception.

Employees who were previously disqualified from the scheme because their Jan/Feb wages were higher than €960 are now entitled to a subsidy under the new rules for any payments since 16th April if their pay has now fallen below 960 and the fall is more than 20%. So you can use the function for those employees now.

This can be used like a regular function in an Excel spreadsheet like

=CalculateWageSubsidy(A2,B2)

It takes two parameters

CalculateWageSubsidy(Average Net Pay Jan/Feb , Additional Taxable Employer Pay)

The second parameter "Additional Taxable Employer Pay" is optional and defaults to zero if not supplied.

The only downside is that because it is a Macro/VBA it will generate a security warning when opened - you will need to enable the blocked content for the formula to work

As it is an Excel Macro File I cannot attach it here, but you can download it from our website at

http://mirror1.collsoft.ie/TWSS/TWSS_PHASE_2_VBA.xlsm

This code is being distributed "As-Is" - we dont take any responsibility for any errors or mistakes - you should check the results yourself. There is no support being provided with it.

This is being made available free of charge and without any restrictions. You are free to distribute and modify the attached code as you want.


Regards

Jason

P.S. If anybody finds an error please let me know!

Tow

What people also need to be aware of is, from the 4th of May Revenue are going to rob Peter (ARNWP>586) to pay Paul (ARNWP>960). In other words the higher paid will now get a wage subsidy, at the cost of the people on middle income.

Will23

collsoft wrote: »

Hi All,

Just to keep the "Ban Hammer" "Gods" happy I will declare that I am Jason Collins, the owner of CollSoft Payroll.

A couple of days ago a post asked if there was any online calculators available (Will23 Post #393) and I answered the question Honestly.

I dont know why my answer has been deleted, but I note that it has.

There is not much point in me in answering questions here if they are just going to be deleted by admins.

Sorry I cant hep anymore - good luck understanding TWSS Phase 2

Sorry, I never saw that response unfortunately! Thanks though.

blackwhite

Where are people seeing the subsidy for people on >€960 ?

Ministerial order dated 16th April is quite clear

https://www.revenue.ie/en/corporate/press-office/letters/minister-of-finance-signed-letter-to-chairman-revenue-160420.pdf

2nd page includes the following:

a temporary wage subsidy is not payable to an employer in relation to any employee whose net weekly emoluments is in excess of €960

Will23

blackwhite wrote: »

Where are people seeing the subsidy for people on >€960 ?

Ministerial order dated 16th April is quite clear

https://www.revenue.ie/en/corporate/press-office/letters/minister-of-finance-signed-letter-to-chairman-revenue-160420.pdf

2nd page includes the following:

I think it applies if one’s average weekly salary for Jan and feb was greater than €960, but has fallen below this figure for March and April.

In this case, my understanding is that if it one’s salary has fallen by more than 20%, then the subsidy scheme might apply, subject to the total nett for may not exceeding €960.

I am certainly open to correction on that.

tina1040

blackwhite wrote: »

Where are people seeing the subsidy for people on >€960 ?

Ministerial order dated 16th April is quite clear

https://www.revenue.ie/en/corporate/press-office/letters/minister-of-finance-signed-letter-to-chairman-revenue-160420.pdf

2nd page includes the following:

There is a subsidy if the employee on more than €960 has been reduced by 20%.

https://www.gov.ie/en/news/c3e1eb-minister-donohoe-announces-update-to-the-temporary-wage-subsidy-sche/
"Therefore, if an employee was earning over €76,000 gross and has now been reduced to below €960 net pay a week, and their reduction is more than 20% then a subsidy of up to €205 would be payable and if the reduction was more than 40% a subsidy of up to €350 would be payable."

collsoft

blackwhite wrote: »

Where are people seeing the subsidy for people on >€960 ?

Ministerial order dated 16th April is quite clear

https://www.revenue.ie/en/corporate/press-office/letters/minister-of-finance-signed-letter-to-chairman-revenue-160420.pdf

2nd page includes the following:

Sorry, I have edited my post to clarify and indeed others have mentioned the conditions where a subsidy could apply.

If your Average Revenue Net Weekly Pay (ARNWP) in Jan/Feb is more than 586, then you will be entitled to a subsidy under the scheme if your current Pay is less than €960 and your overall drop is at least 20%.

So your Pay drops from €1000 per week to €800 - then subsidy is available.

If your Pay drops from €970 to €950 then no subsidy is available

Will23

collsoft wrote: »

Sorry, I have edited my post to clarify and indeed others have mentioned the conditions where a subsidy could apply.

If your Average Revenue Net Weekly Pay (ARNWP) in Jan/Feb is more than 586, then you will be entitled to a subsidy under the scheme if your current Pay is less than €960 and your overall drop is at least 20%.

So your Pay drops from €1000 per week to €800 - then subsidy is available.

If your Pay drops from €970 to €950 then no subsidy is available

Thanks Collsoft,

in the case above, do you know is the subsidy then in addition to the 'new' reduced salary of €800 (bringing it back closer to €960) or supplementing that 'new' salary to further ease pressure on the company (i.e. leaving it at €800 including subsidy)?

I hope this makes sense?

Stratvs

V7.0 of the FAQ out today 21.04.20.

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

I'm looking at P14 4.1 :-

• From 16 April 2020, the wage subsidy is available to support employees whose ARNWP was greater than
€960, and their current gross pay is below €960 per week, subject to the tiered arrangements and
tapering.

Is this an error ? Should that not be net not gross ?

Tow

Stratvs wrote: »

Is this an error ? Should that not be net not gross ?

It is correct. May not be logical, but is correct.

collsoft

Hi Will23,

The idea is to add onto the 'new' reduced salary to bring you closer to €960.

So for example, lets say your pre-covid Average Revenue Net Weekly Pay (ARNWP) was €1000

If your new pay was €800 then you would get a subsidy of €160 to bring you up to €960

If your new Pay was €600 then the subsidy is €350 to bring you up to €950

If it was €500 then the subsidy is still €350 and the total is €850


So the idea is to bring you closer to €960, but not over it.

The maximum subsidy available is €350 but that requires a drop in salary of 40% or more.

If the drop in salary is between 20% and 40% then the maximum subsidy is €205.

If the drop in pay is less than 20% then there is no subsidy at all.

Will23 wrote: »

Thanks Collsoft,

in the case above, do you know is the subsidy then in addition to the 'new' reduced salary of €800 (bringing it back closer to €960) or supplementing that 'new' salary to further ease pressure on the company (i.e. leaving it at €800 including subsidy)?

I hope this makes sense?

kennethsmyth

collsoft wrote: »

Hi Will23,

The idea is to add onto the 'new' reduced salary to bring you closer to €960.

So for example, lets say your pre-covid Average Revenue Net Weekly Pay (ARNWP) was €1000

If your new pay was €800 then you would get a subsidy of €160 to bring you up to €960

If your new Pay was €600 then the subsidy is €350 to bring you up to €950

If it was €500 then the subsidy is still €350 and the total is €850


So the idea is to bring you closer to €960, but not over it.

The maximum subsidy available is €350 but that requires a drop in salary of 40% or more.

If the drop in salary is between 20% and 40% then the maximum subsidy is €205.

If the drop in pay is less than 20% then there is no subsidy at all.

Collsoft, I have to ask a question in relation to how you are presenting that above.

The subsidy is part of your reduced salary - not to top it upwards, can you confirm which way is correct?

Will23

collsoft wrote: »

Hi Will23,

The idea is to add onto the 'new' reduced salary to bring you closer to €960.

So for example, lets say your pre-covid Average Revenue Net Weekly Pay (ARNWP) was €1000

If your new pay was €800 then you would get a subsidy of €160 to bring you up to €960

If your new Pay was €600 then the subsidy is €350 to bring you up to €950

If it was €500 then the subsidy is still €350 and the total is €850


So the idea is to bring you closer to €960, but not over it.

The maximum subsidy available is €350 but that requires a drop in salary of 40% or more.

If the drop in salary is between 20% and 40% then the maximum subsidy is €205.

If the drop in pay is less than 20% then there is no subsidy at all.

Thanks Collsoft... it would seem from Stratvs' post above that the cut off point for the subsidy is now €960 gross, whereas the example above is nett. Maybe this will change again and this is an error in the revenue doc..!

Cheers again.

Will

blackwhite

Will23 wrote: »

Thanks Collsoft... it would seem from Stratvs' post above that the cut off point for the subsidy is now €960 gross, whereas the example above is nett. Maybe this will change again and this is an error in the revenue doc..!

Cheers again.

Will

Based on the current revenue guidance - the cut-off is €960 Gross for employees who had been on greater than €960 ARNWP during Jan/Feb, but who have since suffered a reduction in pay.

For employees who were on less than €960 ARNWP during Jan/Feb, then they qualify, provided that the top-up amount paid by their employer (which is the new classification of Gross Pay) is less than 80% of their previous ARNWP.

collsoft

Hi Kenneth,

Well I guess it depends which way you are looking at it.

From an employer's perspective you would look at the subsidy separate from the additional employer pay.

From an employee's perspective you just look at the two together, and the subsidy is just part of your overall reduced salary.

kennethsmyth wrote: »

Collsoft, I have to ask a question in relation to how you are presenting that above.

The subsidy is part of your reduced salary - not to top it upwards, can you confirm which way is correct?

collsoft

Hi Will,

Unfortunately this is something that we all just have to live with.

The way the subsidy is calculated inevitably mixes up terms like "Gross", "Net" and "Salary" and it is easy to get confused.

What is really confusing is that an individuals subsidy entitlement is a mix of previous net pay as well as the current gross pay, so it will always be confusing.

Will23 wrote: »

Thanks Collsoft... it would seem from Stratvs' post above that the cut off point for the subsidy is now €960 gross, whereas the example above is nett. Maybe this will change again and this is an error in the revenue doc..!

Cheers again.

Will

fungie

This is all very confusing and I've been trying to figure it out.

My net salary was above 960 averaged over Jan and Feb. We were forced to take a 30% pay cut meaning the new net pay is less than 960 net but gross is more than 960 (70% of old salary). Should I be getting the wage subsidy scheme?

If so, is it that the company pays me 70% of old salary as agreed contractually, then the subsidy kicks in to bring closer to 960 as Collsoft mentioned.

Or will I receive 70% of old salary, which includes the subsidy. Meaning the company is only paying, let's say 50% (random guess) of my salary and the subsidy pays the rest. If this is the case, when this scheme ends they will have to up their contributions to bring it back to 70%?

kennethsmyth

fungie wrote: »

This is all very confusing and I've been trying to figure it out.

My net salary was above 960 averaged over Jan and Feb. We were forced to take a 30% pay cut meaning the new net pay is less than 960 net but gross is more than 960 (70% of old salary). Should I be getting the wage subsidy scheme?

If so, is it that the company pays me 70% of old salary as agreed contractually, then the subsidy kicks in to bring closer to 960 as Collsoft mentioned.

Or will I receive 70% of old salary, which includes the subsidy. Meaning the company is only paying, let's say 50% (random guess) of my salary and the subsidy pays the rest. If this is the case, when this scheme ends they will have to up their contributions to bring it back to 70%?

This is why I believe items mentioned above are causing confusion. The subsidy forms part of your net pay at whatever level your employer has reduced it to.

Eg (from May) if your normal pay is 1000, and employer has reduced it to 80% then it will be 800. The subsidy is not added onto the 800 but forms part of it. The subsidy is essentially helping the employer pay the 80% of pay.

However what you need to be aware is that the subsidy while not taxed now is taxable in future so you are not really getting 80% pay you are getting less as more tax will need to be paid on the subsidy element later.

The_Chap

kennethsmyth wrote: »

This is why I believe items mentioned above are causing confusion. The subsidy forms part of your net pay at whatever level your employer has reduced it to.

Eg (from May) if your normal pay is 1000, and employer has reduced it to 80% then it will be 800. The subsidy is not added onto the 800 but forms part of it. The subsidy is essentially helping the employer pay the 80% of pay.

However what you need to be aware is that the subsidy while not taxed now is taxable in future so you are not really getting 80% pay you are getting less as more tax will need to be paid on the subsidy element later.

^^^ this

the subsidy is to enable your employer to keep you employed and at least pay you the wage subsidy, not to help keep existing incomes levels maintained