Wage Subsidy Scheme Issues

collsoft

Hi BlackWhite,

Fungie's original question was not about could he be made eligible for the scheme.

He asked if he was eligible for the subsidy given his current level of pay .

Fungie mentioned in his second post that "My take home pay for May was 25% less than my take home pay for the Jan-Feb period."

I will assume that he means his net pay, and I will assume that there are not other tax free adjustments such as expenses, country money etc.

So, if his ARNWP for Jan/Feb was €968, and if his current net pay is 25% less than this as he stated, it must be around €726.

As he mentioned he is not on the scheme, and I am assuming no other tax free payments, so if you add back the PAYE, PRSI, USC and pension deductions to his current net pay in order to find out what his current gross Pay is, I am pretty sure that it will be higher than €774.40 (the pay above which an employee becomes ineligible for the scheme on an ARNWP of €968), and indeed I would suspect that his Gross Pay is likely to be above the €960 mark too.

blackwhite wrote: »

This is not correct.

Since the move the operational scheme, every employee can be made eligible for the scheme, on the basis that Revenue's definition of Gross Pay is excluding the subsidy.
The problem is, that their pay may need to be cut still further to make them eligible for the scheme.


Take the example of €968 ARNWP quoted above.

Putting that employee on the scheme would give a Subsidy of €205 per week, and a max Top-Up of €755 per week (to bring the total to the max cap of €960 on the scheme).

Per Revenue guidance, the Reduction in Pay is calculated as 755/968 - 78% of ARNWP - which falls into the guidance of "more than 60% and not more than 80% of the ARNWP, a subsidy of €205 is applicable."

(if calculated on the €350 subsidy level, the max top-up allowed would be €580 so as not to breach the 60% of ARNWP provision).



The scheme is very simple on this.

If an employee's ARNWP was between €960 - €1016.67 then, in order to be eligible for the scheme and pay them the maximum allowable, they can be paid a subsidy of €205 and a top-up of €755 weekly.
Otherwise, the employer can choose to pay them a subsidy of €350, and a top of of no more than 60% of their ARNWP (which will result in less than a €960 in aggregate for the employee).

If an employee's ARNWP was greater than €1016.67, then their employer can pay the subsidy of €350, plus a top-up of up to a maximum of €610.

This is the tier 1 and tier 2 that appears in the Revenue CSV file.


If someone was on payroll with the same employer in both Jan and Feb, had been on ARNWP of €968 during that period and has suffered a pay cut since then, and the employer is eligible to participate in the scheme - then there's no possible way for the employee not to be eligible.




We've queried this with Revenue and this has been confirmed to us - we've just decided not to do so as we've taken a policy of only applying the scheme to employees where it's possible to top-up all the way to their ARNWP.


Take the example of our MD. His ARNWP per the Revenue file is over €4k per week.
If we decided to, we could place him on the scheme. However, we'd be limited to claiming €350 and topping up by €610 - dropping his aggregate from over €4k to €960.


In Fungie's case - his employer could put him on the scheme by dropping his aggregate to €960 (subsidy of €205 and top-up of €755).

Given he's already suffered a pay-cut it seems his employer is missing a trick on this - given they could apply the scheme and most likely leave Fungie in a better position than he is now, whilst actually costing the employer less (and that's before factoring in the ER PRSI savings also).

blackwhite

collsoft wrote: »

Hi BlackWhite,

Fungie's original question was not about could he be made eligible for the scheme.

He asked if he was eligible for the subsidy given his current level of pay .

Fungie mentioned in his second post that "My take home pay for May was 25% less than my take home pay for the Jan-Feb period."

I will assume that he means his net pay, and I will assume that there are not other tax free adjustments such as expenses, country money etc.

So, if his ARNWP for Jan/Feb was €968, and if his current net pay is 25% less than this as he stated, it must be around €726.

As he mentioned he is not on the scheme, and I am assuming no other tax free payments, so if you add back the PAYE, PRSI, USC and pension deductions to his current net pay in order to find out what his current gross Pay is, I am pretty sure that it will be higher than €774.40 (the pay above which an employee becomes ineligible for the scheme on an ARNWP of €968), and indeed I would suspect that his Gross Pay is likely to be above the €960 mark too.

If his ARNWP was €968, and he's suffered a cut in take home pay of approx 25% - then there's no way that it isn't possible for his employer to put him on the scheme, and have it arranged that the actual cost to the employer is lower than it currently is, and that fungie'e actual take-home pay is better than it currently is under the pay cuts.


You keep missing the point that the eligibilty is now based on whatever the Gross Pay included on the current subsidy claim is - what his gross pay on his last payroll was is irrelevant. All that matters is what the ARNWP based on Jan/Feb is, and what is the Gross Pay submitted as part of any subsidy claim (and the gross pay in this case is effectively the top-up).

You've a very good software product - but you're making some fundamental errors in terms of how tax planning for an employee should be done on this.

blackwhite

collsoft wrote: »

Hi BlackWhite,

Fungie's original question was not about could he be made eligible for the scheme.

He asked if he was eligible for the subsidy given his current level of pay .

Fungie mentioned in his second post that "My take home pay for May was 25% less than my take home pay for the Jan-Feb period."

I will assume that he means his net pay, and I will assume that there are not other tax free adjustments such as expenses, country money etc.

So, if his ARNWP for Jan/Feb was €968, and if his current net pay is 25% less than this as he stated, it must be around €726.

As he mentioned he is not on the scheme, and I am assuming no other tax free payments, so if you add back the PAYE, PRSI, USC and pension deductions to his current net pay in order to find out what his current gross Pay is, I am pretty sure that it will be higher than €774.40 (the pay above which an employee becomes ineligible for the scheme on an ARNWP of €968), and indeed I would suspect that his Gross Pay is likely to be above the €960 mark too.

Just on the calculations you've thrown in.

Assuming his current net is approx €726 - then Subsidy of €205, plus a top-up of €755 would be the alternative by being switched over to the scheme.

Assuming tax credits of €3,300 and standard cut-off of €34,550 that would leave a total of

Subsidy €205.00
Gross Pay €755.00
Total Pay €960.00

PAYE (on 755 only) €105.65
USC (on 755 only) €20.66

Net Pay on Payslip €833.68

Revenue Reconciliation at end of year

Income Tax €82
USC €11.48

Which would leave a final weekly pay of €740.21

Switching him onto the scheme would ultimately cost the employer less (€758.78 per week), and would also result in him being better off overall by approx €15 per week

collsoft

Fair enough,

I agree with you calculations, but there is one thing you are forgetting - his pension deduction.

The current net pay of €726 is after the pension has been deducted, where as the figure of €755 is before it is deducted.

I dont know what his pension deduction is, but lets take an example of €25.

And assuming that all both the Gross Pay and Subsidy are going to be subject to PAYE and USC at year end, then his figures are as follows;

Pay subject to PAYE = €960 - €25 = €935
Pay subject to USC = €960

Assuming basic tax credits and standard USC bands his taxes are as follows;

PAYE: €174.77
USC: €29.89

So his net pay is Gross - PAYE - USC - Pension + Subsidy = €730.67 - so ok he is a little bit better off on that, but it was only a €25 pension.

Lets try a €50 pension

Pay subject to PAYE = €960 - €50= €910
Pay subject to USC = €960

PAYE: €164.77
USC: €29.89

Net Pay is €755- €164.77 - €29.89 - €50 + €205 = €715.34 - so he is a little bit worse off being on the subsidy in this case.


Just for the record, I never ever said that the subsidy or eligibility was based on "gross pay on his last payroll". I have never referred to any previous gross Pay at all other than to say that you do not measure your drop against it.


Likewise i never ever give tax planning advice - way above my pay grade. I only ever answer questions about the rules of the scheme.

Fungie asked why his employer told him that he was not eligible given his current situation.

He did not ask what needed to be done in order for him to get a subsidy.

He could also take a pay cut down to €610 and receive a subsidy of €350. The question would he want to.

And just for the record I'm still claiming not to be a "Shill" - i would much rather see myself as Dell Boy rather than Rodney

blackwhite wrote: »

Just on the calculations you've thrown in.

Assuming his current net is approx €726 - then Subsidy of €205, plus a top-up of €755 would be the alternative by being switched over to the scheme.

Assuming tax credits of €3,300 and standard cut-off of €34,550 that would leave a total of

Subsidy €205.00
Gross Pay €755.00
Total Pay €960.00

PAYE (on 755 only) €105.65
USC (on 755 only) €20.66

Net Pay on Payslip €833.68

Revenue Reconciliation at end of year

Income Tax €82
USC €11.48

Which would leave a final weekly pay of €740.21

Switching him onto the scheme would ultimately cost the employer less (€758.78 per week), and would also result in him being better off overall by approx €15 per week

je551e

If someone wasn’t paid during Jan/ Feb but paid in March , are they eligible for the scheme?

collsoft

Unfortunately no they are not eligible.

The only exception to this are people who were on maternity, adoptive or parental leave during Jan/Feb and who have since come back to work

je551e wrote: »

If someone wasn’t paid during Jan/ Feb but paid in March , are they eligible for the scheme?

je551e

collsoft wrote: »

Unfortunately no they are not eligible.

The only exception to this are people who were on maternity, adoptive or parental leave during Jan/Feb and who have since come back to work

Great thanks thought so but wasn’t 100%

collsoft

I will admit BlackWhite that you got my goat up last night when you said I was using two different definitions of Gross Pay - I was not, and if I ever did then it would be time for me to hang up my boots and call it a day.

For the record, I write the calc code in our product so I have a pretty good understanding what Gross pay is.

On one level the wage subsidy scheme is pretty simple - its just a non taxable payment being made to an employee - but it takes 71 pages of an FAQ to try explain it, so in reality its anything but simple.

There is a lot of terminology and that confuses people, and I try my best to keep the terminology as simple as I can, and to make sure it relates to what both employers and employees understand, or in line with what they are comparing it to (ROS screens or payslips etc).

And then telling me that I was a "Shill", that got my goat up even more because honestly thats not what I was trying to do.

I can tell you that when the new tiered calculations were announced it took me the best part of a week to get my head around the operation of the calculations when they were announced. And in true Revenue fashion, they didnt publish the updated FAQ until the new system went live so it left people under a lot of pressure trying to understand how it works.

So we put a lot of effort into trying to help people as best we could, and we did things like release a free online calculator and an Excel spreadsheet with TWSS user function so that people could get to grips with the scheme and see how it would impact on their Payroll.

I see a lot of stuff on our helpdesk where employers make a lot of mistakes in operating the scheme so in part my answers are influenced by that experience.

We are also seeing a lot of employers coming into the scheme now as the economy reopens and while they may have heard about the scheme, they are not very aware of the actual details and so in a lot of ways we have had to go back to the beginning in trying to explain the scheme to them - a second wave so to speak.

So BlackWhite, if you feel that if I have been given "hell of a lot of leeway with the site rules to shill his product" I will bow to your experience as a longstanding member of the site and refrain from confusing anybody

fungie

Thanks Collsoft and blackwhite. I don't need to know exactly if I'm eligible, it seems I'm right on the borderline. My original point was that I don't think my company is doing it correctly, I know I'm in the top quartile of earners as I took a proportionate salary cut. If I'm on the boundary then 75% probably can get the scheme but only about 20% are. There is a clear discrepancy here. Considering there have been large scale redundancies, I believe some of these could of been avoided if the scheme was administered correctly.

Renjit

je551e wrote: »

Great thanks thought so but wasn’t 100%

Refer to this document. It has more details.
https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

What if an employee was not paid their usual pay in January or February 2020?

There can be cases where an employee was in employment but who did not receive normal pay in January or
February 2020, such as reduced pay, maternity leave, illness benefit or off-pay leave. In such cases the employer can
either:
• operate the scheme based on Average Revenue Net Weekly Pay, or
• pay the employee the appropriate wages without receiving a subsidy refund

collsoft

Hi Renjit,

I always have a small laugh when I read that particular item in the FAQ (item 4.6).

It is typical Revenue answer that actually tells you nothing.

On the one hand, you can choose to use the ARNWP which is based on the Jan/Feb wages which we have already established were not normal.

Or

You can just not use the wage subsidy scheme.

In other words - take it or leave it, but there is nothing you can really do.

Why not just say that in the first place.

I have spoken to employers who have taken the answer in the FAQ to mean that you can calculate your own ARNWP based on some other period other than Jan/Feb and use that instead - that is absolutely not the case

Renjit wrote: »

Refer to this document. It has more details.
https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

Will23

Hi collsoft,

I’ve been following this thread for a while, from the early days when things were much more confusing. I just wanted to say I’ve found your willingness to help folks out on this thread hugely beneficial. I’m sure things get lost in translation on these boards all the time, but you’re giving folks a great free service and I’m sure it’s appreciated by most who use the board. Thanks.

Will

collsoft

Thanks Will I very much appreciate that, you are very welcome.

Jason

Will23 wrote: »

Hi collsoft,

I’ve been following this thread for a while, from the early days when things were much more confusing. I just wanted to say I’ve found your willingness to help folks out on this thread hugely beneficial. I’m sure things get lost in translation on these boards all the time, but you’re giving folks a great free service and I’m sure it’s appreciated by most who use the board. Thanks.

Will

tiredblondie

Hi All
Bit of an awkward one (to me anyway!) but would appreciate any advise if possible!

At the beginning of March, i was off sick for 8 weeks - my job paid me for this - social welfare went to the company.
My payslip was the same as normal for the 8 weeks, no mention of social welfare and them doing a top up or whatever.
Normal 2 week salary is €1500 before tax - all standard tax bands.
First payslip when i returned, the payslip said Social Welfare €1421 Employer payment €79 - i got a refund of tax of approx €500.
In the meantime, i received a new tax cert from Revenue stating i owe €284 in tax on the illness benefit.
2nd pay after i returned - company went on Wage Subsidy Scheme - €350/week and they top up the difference. My wages was down approx €100 over the 2 weeks to normal (i was told this was due to a delay in a new RPN being issued after illness benefit)
Since then, my wages have been the exact same take home pay (gross pay is reduced a lot which i believe to be correct as it is based on net pay)
Many others in the company that i have spoke to, have said they are up approx €300 every two weeks since the wage subsidy scheme - they would normally receive some commission on top of their salary plus they got a bonus paid in February so their average pay is actually higher on wage subsidy scheme to what it technically should be.
When i questioned mine, i was told no it's correct, and that i am in a better position to those getting refunds as they would owe it back plus the tax on the wage subsidy to revenue.
I presume that i will owe tax too on the wage subsidy of either 20% or 40% which is a huge amount for someone who hasn't actually gotten any tax back like everyone else!!

My main question here is, even though the job paid me for the 8 weeks off and they received the illness benefit, should the illness benefit have been included on my payslip when i returned to work??

collsoft

Hi Fungie,

You are welcome.

It is entirely possible that your employer is not operating the scheme correctly, but he may also be making a conscious decision not to put many on the scheme

Some employers are experiencing a lot of pushback from employees.

A lot of employees see the subsidy as something that belongs exclusively to them, and it was to be used to pay them when they were not working.

As employees go back to work they are telling employers that by using the subsidy they are not actually paying them in line with their contract of employment and this is causign some employers to think hard about using the scheme.

The other thing is that the scheme will have a short lifetime (currently the end of August) and some employers are looking more at the medium term outlook and deciding what level of staffing they will need or be able to support once the scheme ends. And that is before you even start thinking about Brexit.

Current Government projections are for unemployment rates to remain at around 17% at year end - that's pretty high.

Revenue gave me some stats last week on the submissions made to revenue using our software

In Jan/Feb/Mar there was a consistent 30K employers using our software to submit to Revenue.

In Apr/May that dropped to 20K - so one third of our employers just stopped paying wages full stop during that period.

Of the 20K that remained, 45% of those had availed of the wage subsidy scheme.

So all in all, almost 80% of our employers are on some form of State support - that is going to be very hard to recover from in the short term.

Jason

fungie wrote: »

Thanks Collsoft and blackwhite. I don't need to know exactly if I'm eligible, it seems I'm right on the borderline. My original point was that I don't think my company is doing it correctly, I know I'm in the top quartile of earners as I took a proportionate salary cut. If I'm on the boundary then 75% probably can get the scheme but only about 20% are. There is a clear discrepancy here. Considering there have been large scale redundancies, I believe some of these could of been avoided if the scheme was administered correctly.

collsoft

Hi TiredBlondie,

Well thats a long question!!!

Just to start, Illness Benefit is subject to PAYE (Income Tax) but not to USC or PRSI. See Revenue Document here>>

The correct procedure to collect the tax is for Revenue to reduce your Tax Credits and issue your employer with a revised RPN to collect the Income Tax going forward. See Here>>

If the Illness Benefit Payment was made directly to your employer, then your employer should have passed it on to you as a Tax Free Payment and not charged you any PAYE, USC or PRSI.

If I am reading your question correctly it sounds like your employer just paid your normal gross pay over the 8 weeks which means that you efficiently paid PAYE, USC and PRSI on your illness benefit and you are now paying Income Tax on the double.

If this is the case then you need to talk to your employer about it because you are out of pocket - but from a Revenue perspective it looks like you have paid the correct amount of PAYE and USC.

Going back and changing things retrospectively is going to be difficult because that would change you net pay in the 8 week period but those amounts have already been paid etc.

On thing you could suggest is that your employer pays you the illness benefit over the next 8 weeks as a tax free payment, and reduces your Gross Pay accordingly.

But I am pretty sure you have payed too much PAYE, USC and PRSI

tiredblondie wrote: »

Hi All
Bit of an awkward one (to me anyway!) but would appreciate any advise if possible!

At the beginning of March, i was off sick for 8 weeks - my job paid me for this - social welfare went to the company.
My payslip was the same as normal for the 8 weeks, no mention of social welfare and them doing a top up or whatever.
Normal 2 week salary is €1500 before tax - all standard tax bands.
First payslip when i returned, the payslip said Social Welfare €1421 Employer payment €79 - i got a refund of tax of approx €500.
In the meantime, i received a new tax cert from Revenue stating i owe €284 in tax on the illness benefit.
2nd pay after i returned - company went on Wage Subsidy Scheme - €350/week and they top up the difference. My wages was down approx €100 over the 2 weeks to normal (i was told this was due to a delay in a new RPN being issued after illness benefit)
Since then, my wages have been the exact same take home pay (gross pay is reduced a lot which i believe to be correct as it is based on net pay)
Many others in the company that i have spoke to, have said they are up approx €300 every two weeks since the wage subsidy scheme - they would normally receive some commission on top of their salary plus they got a bonus paid in February so their average pay is actually higher on wage subsidy scheme to what it technically should be.
When i questioned mine, i was told no it's correct, and that i am in a better position to those getting refunds as they would owe it back plus the tax on the wage subsidy to revenue.
I presume that i will owe tax too on the wage subsidy of either 20% or 40% which is a huge amount for someone who hasn't actually gotten any tax back like everyone else!!

My main question here is, even though the job paid me for the 8 weeks off and they received the illness benefit, should the illness benefit have been included on my payslip when i returned to work??

Seve OB

@ Tiredblondie

Could you be on Week 1 basis?

Seve OB

Has anyone restarted someone who has been on temporary layoff yet?
I need to restart a few in the next couple of weeks and we will be putting them on the Subsidy scheme but notice that all those who went on temporary layoff are not on the import file.

with the exception of 1 guy who left before it all kicked off

tiredblondie

.

tiredblondie

collsoft wrote: »

Hi TiredBlondie,

Well thats a long question!!!

Just to start, Illness Benefit is subject to PAYE (Income Tax) but not to USC or PRSI. See Revenue Document here>>

The correct procedure to collect the tax is for Revenue to reduce your Tax Credits and issue your employer with a revised RPN to collect the Income Tax going forward. See Here>>

If the Illness Benefit Payment was made directly to your employer, then your employer should have passed it on to you as a Tax Free Payment and not charged you any PAYE, USC or PRSI.

If I am reading your question correctly it sounds like your employer just paid your normal gross pay over the 8 weeks which means that you efficiently paid PAYE, USC and PRSI on your illness benefit and you are now paying Income Tax on the double.

If this is the case then you need to talk to your employer about it because you are out of pocket - but from a Revenue perspective it looks like you have paid the correct amount of PAYE and USC.

Going back and changing things retrospectively is going to be difficult because that would change you net pay in the 8 week period but those amounts have already been paid etc.

On thing you could suggest is that your employer pays you the illness benefit over the next 8 weeks as a tax free payment, and reduces your Gross Pay accordingly.

But I am pretty sure you have payed too much PAYE, USC and PRSI

Yes, they paid me normal salary every 2 weeks of €1500 for 8 weeks - all normal standard taxes paid.

Then they paid me "tax free" €1421 when I returned (7 weeks x €203) plus €79 salary - total is €1500 before tax (new Rpn hadn't issued at this stage" - came out with extra €500 that week

Then rpn issued and I went on wage subsidy scheme - my wage was €100 down apparently due to previous being up - so I thought the extra €400 related to wage subsidy and tax refunds.
Tax credits also reduced from €125 to €116 - this relating to the €284 I owe revenue in tax for illness benefit.

2 salaries received since, €700 wage subsidy (2 week salary) and top up of €498 - small refund of tax issued but take home pay is the same as pre covid.

Everyone else in work is coming out with a few hundred extra which they were advised to put away to cover tax owed on wage subsidy payment - I have nothing extra to cover that!

tiredblondie

tiredblondie wrote: »

Yes, they paid me normal salary every 2 weeks of €1500 for 8 weeks - all normal standard taxes paid.

Then they paid me "tax free" €1421 when I returned (7 weeks x €203) plus €79 salary - total is €1500 before tax (new Rpn hadn't issued at this stage" - came out with extra €500 that week

Then rpn issued and I went on wage subsidy scheme - my wage was €100 down apparently due to previous being up - so I thought the extra €400 related to wage subsidy and tax refunds.
Tax credits also reduced from €125 to €116 - this relating to the €284 I owe revenue in tax for illness benefit.

2 salaries received since, €700 wage subsidy (2 week salary) and top up of €498 - small refund of tax issued but take home pay is the same as pre covid.

Everyone else in work is coming out with a few hundred extra which they were advised to put away to cover tax owed on wage subsidy payment - I have nothing extra to cover that!

I can put up screen shots of all payslips if that helps?

tiredblondie

Seve OB wrote: »

@ Tiredblondie

Could you be on Week 1 basis?

How can I tell if I am?

collsoft

Hi Seve,

If you rehire an employee and register their new Employment ID with Revenue today, they will update your CSV file tonight and you can download it tomorrow. They run that process every week night but not over the weekend - have to wait until Monday night.

Revenue will match the new ID to whatever the employee had in Jan/Feb and base the ARNWP on whatever earnings they had under the old Employment ID.

Couple of things to watch out for.

Dont process any J9 until the employee is in the CSV file, otherwise you wont get paid. You need to wait for the overnight process to run.

The employee needs to be sure and sign off from PUP.

If your rehired employees are paid monthly then you may need to put them back on as weekly for the remainder of June.

If you process a monthly payroll for June, Revenue will issue you with a full month refund of the subsidy. This will be notified to Social Welfare and they will seek repayment of any PUP that the employee received for the first few weeks in June.

Jason

Seve OB wrote: »

Has anyone restarted someone who has been on temporary layoff yet?
I need to restart a few in the next couple of weeks and we will be putting them on the Subsidy scheme but notice that all those who went on temporary layoff are not on the import file.

with the exception of 1 guy who left before it all kicked off

collsoft

Hi TiredBlondie,

Then I think that your employer has run things correctly, and I think on the face of it everything is correct.

Its very difficult to compare your wages to other people's wages as everybody has a unique set of circumstances and its hard to compare like with like.

With respect to the €500 better off you were that week you came back - that is most likely the refund of your USC and PRSI arising from the tax free payment that particular week rather than anything else.

I am presuming that you were only put on the wage subsidy scheme the next pay period after you got the €1421.

tiredblondie wrote: »

Yes, they paid me normal salary every 2 weeks of €1500 for 8 weeks - all normal standard taxes paid.

Then they paid me "tax free" €1421 when I returned (7 weeks x €203) plus €79 salary - total is €1500 before tax (new Rpn hadn't issued at this stage" - came out with extra €500 that week

Then rpn issued and I went on wage subsidy scheme - my wage was €100 down apparently due to previous being up - so I thought the extra €400 related to wage subsidy and tax refunds.
Tax credits also reduced from €125 to €116 - this relating to the €284 I owe revenue in tax for illness benefit.

2 salaries received since, €700 wage subsidy (2 week salary) and top up of €498 - small refund of tax issued but take home pay is the same as pre covid.

Everyone else in work is coming out with a few hundred extra which they were advised to put away to cover tax owed on wage subsidy payment - I have nothing extra to cover that!

tiredblondie

collsoft wrote: »

Hi TiredBlondie,

Then I think that your employer has run things correctly, and I think on the face of it everything is correct.

Its very difficult to compare your wages to other people's wages as everybody has a unique set of circumstances and its hard to compare like with like.

With respect to the €500 better off you were that week you came back - that is most likely the refund of your USC and PRSI arising from the tax free payment that particular week rather than anything else.

I am presuming that you were only put on the wage subsidy scheme the next pay period after you got the €1421.

Yes, the €500 increase i presume would have been due to tax refund for the 8 weeks of the additional €203 (it would work out the same if they paid me tax free €203 per week plus a top up for illness benefit to the way they done it which was include it as a bulk amount when i had returned)

I went on wage subsidy for the following pay run - and since have received no tax back - if i'm only paying tax on €498 for 2 weeks, would there not be some rebate due to me? Below is from my revenue online - i can see tax refund on it but take home pay when including the €700 wage subsidy is the same as before.


Pay date10/06/2020
Gross pay€498.04
Pay for Income Tax€423.04
Income Tax paid-€31.40
Pay for USC€498.04
USC paid-€4.21
Employee PRSI paid€0.00
LPT deducted€0.00

tiredblondie

tiredblondie wrote: »

Yes, the €500 increase i presume would have been due to tax refund for the 8 weeks of the additional €203 (it would work out the same if they paid me tax free €203 per week plus a top up for illness benefit to the way they done it which was include it as a bulk amount when i had returned)

I went on wage subsidy for the following pay run - and since have received no tax back - if i'm only paying tax on €498 for 2 weeks, would there not be some rebate due to me? Below is from my revenue online - i can see tax refund on it but take home pay when including the €700 wage subsidy is the same as before.

Pay dateGross payPay for Income TaxIncome Tax paidPay for USCUSC paidEmployee PRSI paidLPT deductedAction
Pay date10/06/2020
Gross pay€498.04
Pay for Income Tax€423.04
Income Tax paid-€31.40
Pay for USC€498.04
USC paid-€4.21
Employee PRSI paid€0.00
LPT deducted€0.00

This would be a "normal" salary

Pay date
15/04/2020
Gross pay
€1,500.00
Pay for Income Tax
€1,425.00
Income Tax paid
€171.53
Pay for USC
€1,500.00
USC paid
€40.87
Employee PRSI paid
€60.00
LPT deducted
€0.00

collsoft

Ill be honest and say that sounds about correct.

The difference between yourself and the other employees is that you have already had your tax credits adjusted down because of the Illness Benefit.

Generally speaking going on the Wage Subsidy would not bring you back to your normal net pay - the only thing masking this is the tax refunds that people get.

if you don't get a tax refund then your net pay is generally lower than it was before on the scheme.

tiredblondie wrote: »

Yes, the €500 increase i presume would have been due to tax refund for the 8 weeks of the additional €203 (it would work out the same if they paid me tax free €203 per week plus a top up for illness benefit to the way they done it which was include it as a bulk amount when i had returned)

I went on wage subsidy for the following pay run - and since have received no tax back - if i'm only paying tax on €498 for 2 weeks, would there not be some rebate due to me? Below is from my revenue online - i can see tax refund on it but take home pay when including the €700 wage subsidy is the same as before.


Pay date10/06/2020
Gross pay€498.04
Pay for Income Tax€423.04
Income Tax paid-€31.40
Pay for USC€498.04
USC paid-€4.21
Employee PRSI paid€0.00
LPT deducted€0.00

tiredblondie

collsoft wrote: »

Ill be honest and say that sounds about correct.

The difference between yourself and the other employees is that you have already had your tax credits adjusted down because of the Illness Benefit.

Generally speaking going on the Wage Subsidy would not bring you back to your normal net pay - the only thing masking this is the tax refunds that people get.

if you don't get a tax refund then your net pay is generally lower than it was before on the scheme.

Thanks for looking at it for me - i just couldn't get my head around it.

So basically, come the end of the year when revenue starts taxing the wage subsidy payment, i'm going to owe a fairly high amount (350 x 20% or 40%)
Same as everyone else in here, only they've gotten the rebates now to cover it whereas i am going to be well out of pocket

Renjit

collsoft wrote: »

Hi Renjit,

I always have a small laugh when I read that particular item in the FAQ (item 4.6).

It is typical Revenue answer that actually tells you nothing.

On the one hand, you can choose to use the ARNWP which is based on the Jan/Feb wages which we have already established were not normal.

Or

You can just not use the wage subsidy scheme.

In other words - take it or leave it, but there is nothing you can really do.

Why not just say that in the first place.

I have spoken to employers who have taken the answer in the FAQ to mean that you can calculate your own ARNWP based on some other period other than Jan/Feb and use that instead - that is absolutely not the case

Yeah, I know that Jan-Feb ARNWP calculation will most likely not give the correct value. They could have used normal working hours per week as the basis for calculation. Average, in many cases, will be lower.

austenesque

Hey hope someone can help!
If you are on the wage subsidy scheme getting the 70% from the goverment only - Can the employer force you to move from working part time to full time without topping up your wage?