Wage Subsidy Scheme Issues

ZeroCool17

highgiant1985 wrote: »

As you say make is net I read that as that's how much you're getting in to your bank account (or in cash/cheque) each week.

If so please note you can't work off net pay on the payslip. It's a common misconception people have on the scheme.

At its simplest (and this is still complex!)

Step 1. Identify Revenue Average Net
The scheme rules are its Gross Pay from Jan/Feb payments minus Tax/USC/EE PRSI divided by the number of PRSI weeks (capped at max 9). that's the figure you're trying to get back to. So its NOT the net pay on your payslip.

Step 2. Based on figure calculated in step 1 see which band you fall in to
This determines what you are entitled to as a subsidy payment that'll be refunded by Revenue.

Band A - If the figure is less than 586 per week you are entitled to subsidy of lower of 70% of net weekly pay capped at 410
Band B - If the figure is greater than 586 but less than 960 you are entitled to subsidy of lower of 70% of net weekly pay capped at 350 max
Band C - If this figure is greater than €960 - sorry not eligible for this scheme due to earning average being too high.

Step 3 - Decide if you want to (or can afford to) give any ER Top Up In Addition to the subsidy payment.
NB: The value of the subsidy + any ER top up MUST not exceed the figure from step one. Doing so reduces how much subsidy will refund.

Step 4 - Process payment.
The Subsidy amount should be recorded against a Non taxable Non PRSIable, Non USCable pay code. Its non taxable now but will be taxable at year end but park that for now it has to go through as non taxable now.
Any ER top up above this should be recorded against a taxable, PRSIable, USCable pay code.

Note: There's a lot more to it than this e.g. also need to update PRSI Class to J9 and recorded 0.01 taxable payment* if no ER top up, stop deductions, pension from being taken from subsidy amount etc.... so above just a high level of the key steps. I recommend check with your payroll supplier for more detailed instructions of how to handle using their software.

Revenue have worked examples in their FAQ document here: https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

So in summary - your boss may be operating it correctly but because the way the scheme is designed it won't make a lot of sense to employees unfort who'll just compare to nett pay in their previous payslip. It's also equally likely due to the complexity of the scheme that he's misunderstood and operating it incorrectly. I wouldn't blame anyone for getting it wrong. My own personal view is the scheme is overly complex and doesn't work well for a number of reasons e.g. low paid employees are actually better off on the unemployment payment as they'll receive more.

Thank you so much for the detailed reply. I knew it wasn't right. I think he needs to ring his accountant and have them come in. That should have been done last week.

Although I think it just clicked with me now! Usual net pay is €392.52. So do the steps from gross -usc etc from Jan-Feb max 9 weeks and let's say band 1 comes out and it gets to €250 = 70% for example. That goes into the govcov19 column and then if he's balancing it up to full payment the remaining €142.52 goes into salary column!

Edit to say I missed the last part of your reply. It does seem overly complex and that's what he said too. Especially when you do these yourself and EE have same pay every week and next to impossible to get through to someone on sage. We waited an hour last week and he had to go in the end. Had to hang up.

leex

PaybackPayroll wrote: »

It's not applied through the payroll - that is correct.
However, Revenue say they will be collecting this tax at the end of the year.

We have suggested to Revenue not to call the top up amount the 'additional taxable payment' because that gives the impression that the subsidy is not taxable.

There may be some surprises at year end.

In simple terms what would cause an end of year "surprise" for an employee if their net pay with this subsidy is the same as normal (after Employer top-up) and returns to normal for remainder of year once subsidy finishes?

2Mad2BeMad

Seve OB wrote: »

no, once the subsidy plus top up is not greater than the average net pay




this is an irish government scheme for irish companies. i can't imagine that you qualify if your company is not irish registered. it has to be applied for through ROS, are you even on that? does your pay come through the Irish PAYE system or is it just billed and you submit an annual tax return?




you and your company could be in trouble here. did they pay you a full top up to your usual gross? if so they can't do that. subsidy plus top up cannot be greater than your average net pay (which as pointed out about is not necessarily your net pay going into your bank)



oh there absolutely is income tax and use on the subsidy. you just don't have to pay it now.

They paid me 30percent of my wage and government paid the rest.
Checked my pay slip and I have 0 tax paid on both the subsidy and the 30percent top up.

So I ow a substantial amount of tax and its only the 1st payment :P

Itsalladdingup

2Mad2BeMad wrote: »

They paid me 30percent of my wage and government paid the rest.
Checked my pay slip and I have 0 tax paid on both the subsidy and the 30percent top up.

So I ow a substantial amount of tax and its only the 1st payment :P

If you’ve been put on the Wage Subsidy Scheme by your employer, your PRSI class has switched to J9, which, I think, is how Revenue picks up that you’re on the scheme. No tax or PRSI is payable and you’re quite likely to get a tax refund if anything. Which they apparently won’t look to claw back. That’s how I thought it was working but stand to be corrected!

blackwhite

Seve OB wrote: »

I have pretty much been working on very little else over the last 10 day or so and on that basis i'm declaring myself a near expert on this only nearly mind you

i've only just found this thread now and read through it and pleased to see there are some misunderstandings which have been cleared up.

but here is something that has not come up so far and some of you might need to be aware
if your top up amount exceeds your personal pension contribution, it cannot be taken from the subsidy. actually nothing can be taken from your subsidy. so if for example you pay your VHI through the payroll but it exceeds any tax back and makes your take home less than your subsidy..... then the payroll is wrong and must be fixed.

another point is that the payroll once submitted, cannot be resubmitted for any changes, but not really one for the employee to worry about, but any payroll operators might take note of this.

That's not quite accurate.

Any non-statutory deductions (such as VHI, unions dues, etc.) can still be deducted if the employee agrees to or requests that the deductions continue.
Section 1.9 of the Revenue guidance. It's a new addition in draft 5

2Mad2BeMad

Itsalladdingup wrote: »

If you’ve been put on the Wage Subsidy Scheme by your employer, your PRSI class has switched to J9, which, I think, is how Revenue picks up that you’re on the scheme. No tax or PRSI is payable and you’re quite likely to get a tax refund if anything. Which they apparently won’t look to claw back. That’s how I thought it was working but stand to be corrected!

Well if your right happy days but I'd find it very hard to believe revenue won't be looking for any tax off people from this. Best keep it aside until more information is released

Pistachio19

What happens if an employee gets the capped €350 (earns over €586 per week net) from the wage subsidy. The €350 is less than 70% of their net. Is the company allowed to top up to 100% in this situation even though top up will be more than 30%?
I have one employee who pays a pension so his net figure needs to incorporate the pension amount. Wage subsidy is capped at €350 for him so is less than 70% of his net weekly salary. I then input his top which comes to more than 30% as I wish him to get 100% of his salary for April. However, when all this is input he now gets over €400 back between PAYE and USC, so effectively his take home pay will be over and above what he normally gets.
Does this sound right or will he be screwed down the line paying a big chunk of tax?

Seve OB

Pistachio19 wrote: »

What happens if an employee gets the capped €350 (earns over €586 per week net) from the wage subsidy. The €350 is less than 70% of their net. Is the company allowed to top up to 100% in this situation even though top up will be more than 30%?
I have one employee who pays a pension so his net figure needs to incorporate the pension amount. Wage subsidy is capped at €350 for him so is less than 70% of his net weekly salary. I then input his top which comes to more than 30% as I wish him to get 100% of his salary for April. However, when all this is input he now gets over €400 back between PAYE and USC, so effectively his take home pay will be over and above what he normally gets.
Does this sound right or will he be screwed down the line paying a big chunk of tax?

Yes that’s ok. So for eg if the guy normally walks away with 700 you can pay him 350 subsidy and 350 top up.

On this scheme, unless you are talking about somebody who never pays a penny in tax, you can never get it back to 100% of gross.

Just remember that subsidy + top up cannot be greater thAn average net as calculated correctly.

jammiedodgers

Itsalladdingup wrote: »

If you’ve been put on the Wage Subsidy Scheme by your employer, your PRSI class has switched to J9, which, I think, is how Revenue picks up that you’re on the scheme. No tax or PRSI is payable and you’re quite likely to get a tax refund if anything. Which they apparently won’t look to claw back. That’s how I thought it was working but stand to be corrected!

They will be looking to claw it back at the end of the year. The subsidy is not taxable in realtime on payroll. Top up payments are taxable but may actually result in a refund of tax
Might be an idea for any payroll operators to make this known to employees.

blackwhite

jammiedodgers wrote: »

They will be looking to claw it back at the end of the year. The subsidy is not taxable in realtime on payroll. Top up payments are taxable but may actually result in a refund of tax
Might be an idea for any payroll operators to make this known to employees.

Not necessarily at the end of the year. They'd indicated that unless someone has unused tax credits at the end of the year (i.e. qualifying charitable donations, medical expenses, etc.) that it'll be clawed back via reduced tax credits in 2021 (and possibly beyond).

When an end of the year review takes place, it may be the case that an employee’s unused tax credits will cover any further liability that may arise. Where this is not the case, and should an Income Tax liability arise, it is normal Revenue practice to collect any tax owing in manageable amounts by reducing an individual’s tax credits for a future year(s) in order to minimise any hardship

anon08042020

Hi all,

I am currently working part time in a fast food restaurant and as many takeaways have closed due to Covid-19, the ones that stayed open have gotten significantly busier than normal, including the one that I am employed at.

The past 2 weeks we have been getting paid less directly from the employer and have been receiving a non-taxed Covid-19 payment for the missing hours on our payslips. The Covid-19 payment amount has been the same both weeks but the hours received from the employer have fluctuated. For example, I was paid extra in the first week and less in the second, while one of my co-workers got it the other way around.

I understand that this is because of the COVID-19 Wage Subsidy Scheme as the PRSI code on my payslip is J9. My employer explained to me that the payslips will continue to fluctuate over the next few weeks but they will balance out in the end as the company is trying to keep paying everyone.

Where my confusion is stemming from is that the COVID-19 Wage Subsidy Scheme is meant for businesses "who have lost a minimum of 25% of turnover because of the COVID-19 pandemic," as stated on the Revenue, Citizens Information and Gov websites. However, our orders have drastically increased so I would imagine that the employer is earning more now than they did before.

Now I have also learned recently that while the COVID-19 Wage Subsidy Scheme, alongside the other schemes set up by the gorvernment to help people struggling financially is not currently taxed, it could be at the end of the year or thereafter.

I suppose that my question is whether I have the right to be suspicious about why my employer is receiving the COVID-19 Wage Subsidy Scheme, and if so, should I be worried about how it could affect me as an employee and my future taxes? Is there anything that I should do to protect myself?

I appreciate any advice in advance!

Seve OB

anon08042020 wrote: »

Hi all,

I am currently working part time in a fast food restaurant and as many takeaways have closed due to Covid-19, the ones that stayed open have gotten significantly busier than normal, including the one that I am employed at.

The past 2 weeks we have been getting paid less directly from the employer and have been receiving a non-taxed Covid-19 payment for the missing hours on our payslips. The Covid-19 payment amount has been the same both weeks but the hours received from the employer have fluctuated. For example, I was paid extra in the first week and less in the second, while one of my co-workers got it the other way around.

I understand that this is because of the COVID-19 Wage Subsidy Scheme as the PRSI code on my payslip is J9. My employer explained to me that the payslips will continue to fluctuate over the next few weeks but they will balance out in the end as the company is trying to keep paying everyone.

Where my confusion is stemming from is that the COVID-19 Wage Subsidy Scheme is meant for businesses "who have lost a minimum of 25% of turnover because of the COVID-19 pandemic," as stated on the Revenue, Citizens Information and Gov websites. However, our orders have drastically increased so I would imagine that the employer is earning more now than they did before.

Now I have also learned recently that while the COVID-19 Wage Subsidy Scheme, alongside the other schemes set up by the gorvernment to help people struggling financially is not currently taxed, it could be at the end of the year or thereafter.

I suppose that my question is whether I have the right to be suspicious about why my employer is receiving the COVID-19 Wage Subsidy Scheme, and if so, should I be worried about how it could affect me as an employee and my future taxes? Is there anything that I should do to protect myself?

I appreciate any advice in advance!

first of all the tax. everything is taxable, either now or later on.

now you say you are getting paid more first week and less in second and vice versa for your fellow employee. from 20+ years experience of running payrolls, i know what most employees seem to look at is the net pay. you should ignore what your take home is because that is not what you are being paid. not saying that this is what you are doing, but just to be sure you need to look at the gross payments.

if the employer is trying to scam the scheme, there will be consequences for them, but as to how it will affect you, i'm not to sure. remember, just because you think the orders are up, that doesn't paint the whole picture, you are not running the books so you can't tell for sure.

we are in what they are calling the transitional phase. it will move to the next phase later on the month where everything is reconciled and i would assume at that point, the scammers will be weeded out.

IMO worst case is that they will have to recalculate your wages and deduct tax on the subsidy they paid you. they may also be required to pay you more because during the subsidy scheme, pay rates are lower, every if you are working same hours. there could very well be penalties imposed on employers where they are required to gross up the payroll but it is not known yet what sanctions will be imposed.

chops018

Hi all,

I am a PAYE worker.

I was checking my latest payslips.

I note that my payslip from before the COVID payment I was paying a lot more tax than the payslip which included the COVID payment.

I am getting the exact amount of payment as I always have been which is great but I am concerned by the difference in tax as I was reading online and discussing with colleagues in other firms who have said that as a PAYE worker we could be hit with a tax bill once this is over and I should be keeping aside any difference in tax from my payslip from before COVID payment.

Can any of you confirm if this is that case that I might be personally hit with a tax bill?

My normal weekly payment is a gross pay of €1057.70 with a total tax payment of €300.72, and net pay of €757.98.

I am still getting this net payment of €757.98 on the COVID payslip but the tax is coming up as -59.11 for the PAYE section. USC is much lower and PRSI is at €0.00. My basic pay on the payslip is now noted as being €350.32.

My questions are:

1. Should I be putting aside anything incase I am hit with a tax bill?
2. If so, then am I being paid correctly if the firm is topping us up and I end up having to pay a sum each week out of what my normal weekly wage would be?

I just do not want to be hit with a tax bill etc., or at least be prepared if so! Obviously it is confusing for everyone!

Jafin

I basically came to ask the same thing as chops108 did above me. I just got my payslip for last week (my first full week of not working, but being kept on the books). After tax I generally get about €425, and my payslip for this week is €381.91. The Covid-19 payment is listed as €305.13 and the rest is made up by 1 cent from my employer (as is said to be done on the Revenue website), then there is PAYE of -63.47 (my weekly tax credit) and USC of -13.30. I've read the Revenue website but I'm still confused. Will I be liable to repay this 63.47 and 13.30 at the end of the year/beginning of next year, along with every other PAYE and USC charge depending on how long this goes on for?

Seve OB

chops018 wrote: »

Hi all,

I am a PAYE worker.

I was checking my latest payslips.

I note that my payslip from before the COVID payment I was paying a lot more tax than the payslip which included the COVID payment.

I am getting the exact amount of payment as I always have been which is great but I am concerned by the difference in tax as I was reading online and discussing with colleagues in other firms who have said that as a PAYE worker we could be hit with a tax bill once this is over and I should be keeping aside any difference in tax from my payslip from before COVID payment.

Can any of you confirm if this is that case that I might be personally hit with a tax bill?

My normal weekly payment is a gross pay of €1057.70 with a total tax payment of €300.72, and net pay of €757.98.

I am still getting this net payment of €757.98 on the COVID payslip but the tax is coming up as -59.11 for the PAYE section. USC is much lower and PRSI is at €0.00. My basic pay on the payslip is now noted as being €350.32.

My questions are:

1. Should I be putting aside anything incase I am hit with a tax bill?
2. If so, then am I being paid correctly if the firm is topping us up and I end up having to pay a sum each week out of what my normal weekly wage would be?

I just do not want to be hit with a tax bill etc., or at least be prepared if so! Obviously it is confusing for everyone!

honestly if the employer is on the scheme and claiming the subsidy, it just sounds wrong that you are walking away with exactly the same net pay.

you payments should be
a subsidy of €350
a top up of €402.98 (assuming 757.98 is the correct calculation of your average net pay)
then whatever way your tax works out. will be much less than normal because the 350 is not taxable (now) but you will possibly pay a bit on the 402 depending on how your credits are structured

Seve OB

Jafin wrote: »

I basically came to ask the same thing as chops108 did above me. I just got my payslip for last week (my first full week of not working, but being kept on the books). After tax I generally get about €425, and my payslip for this week is €381.91. The Covid-19 payment is listed as €305.13 and the rest is made up by 1 cent from my employer (as is said to be done on the Revenue website), then there is PAYE of -63.47 (my weekly tax credit) and USC of -13.30. I've read the Revenue website but I'm still confused. Will I be liable to repay this 63.47 and 13.30 at the end of the year/beginning of next year, along with every other PAYE and USC charge depending on how long this goes on for?

that sounds bang on. no you won't be liable as such for the 63.47 or 13.10. however later in the year, the 305 will incur a tax change. however, tax credits might offset this.

its hard to tell what will happen to anybody later in the year because pay rates change and nobody knows if they will still be getting paid at all!

chops018

Seve OB wrote: »

honestly if the employer is on the scheme and claiming the subsidy, it just sounds wrong that you are walking away with exactly the same net pay.

you payments should be
a subsidy of €350
a top up of €402.98 (assuming 757.98 is the correct calculation of your average net pay)
then whatever way your tax works out. will be much less than normal because the 350 is not taxable (now) but you will possibly pay a bit on the 402 depending on how your credits are structured

Thanks for the reply.

Some employees in my place are actually coming out with more than what their nett pay was then there is a few of us (like me) getting bang on the exact same as we were before.

If my average wage is €757.98 do you have any idea what I should be coming out with if the employer tops me up? Which they are doing by the way!

I just don't know if I should put aside €200-300 a week incase hit with a tax bill.

Surely it shouldn't work in such a way that the employee is having to put aside money each week from what their nett pay was to cover potential tax. As I said, the employer is availing of the subsidy scheme and topping us up. I am currently seeing the subsidy payment and then my nett pay is what it used to be on my payslip. Others in my place are the same and then as I said there is others who are getting more than what their nett pay was. It just doesn't seem correct.

Seve OB

chops018 wrote: »

Thanks for the reply.

Some employees in my place are actually coming out with more than what their nett pay was then there is a few of us (like me) getting bang on the exact same as we were before.

If my average wage is €757.98 do you have any idea what I should be coming out with if the employer tops me up? Which they are doing by the way!

I just don't know if I should put aside €200-300 a week incase hit with a tax bill.

Surely it shouldn't work in such a way that the employee is having to put aside money each week from what their nett pay was to cover potential tax. As I said, the employer is availing of the subsidy scheme and topping us up. I am currently seeing the subsidy payment and then my nett pay is what it used to be on my payslip. Others in my place are the same and then as I said there is others who are getting more than what their nett pay was. It just doesn't seem correct.

as i've already said, you need to forget about what you are coming out with and look at the payments they are making before tax.

ignore others, their tax is probably different to you because they have their wifes credits or vice versa or some other deal going on. it is very possible at least for the first week that people will come away with more than normal.

i can't comment on what you numbers should be, i'd need to know more. happy to work it out with you by pm if you like but just look at what i've said above and see what payments they are making to you before tax is deducted/added back on

chops018

Seve OB wrote: »

as i've already said, you need to forget about what you are coming out with and look at the payments they are making before tax.

ignore others, their tax is probably different to you because they have their wifes credits or vice versa or some other deal going on. it is very possible at least for the first week that people will come away with more than normal.

i can't comment on what you numbers should be, i'd need to know more. happy to work it out with you by pm if you like but just look at what i've said above and see what payments they are making to you before tax is deducted/added back on

PM sent. Thanks.

bigboss1986

Hi all.On 16th of March i was put in 3 days week( X's and O's)
That was for 2 weeks.Now I received my payslip for 3days and instead wages it says Covid19 supplement (some Tax and PRSI refunded)
My wages are not topped up it says 1cent

Can I still claim for 2 days from Social Welfare(I already have forms for 8 weeks) or once Covid 19 is on payslip I cannot claim that.I tried website and ring Social Welfare but couldnt get anyone.
Thanks

Seve OB

bigboss1986 wrote: »

Hi all.On 16th of March i was put in 3 days week( X's and O's)
That was for 2 weeks.Now I received my payslip for 3days and instead wages it says Covid19 supplement (some Tax and PRSI refunded)
My wages are not topped up it says 1cent

Can I still claim for 2 days from Social Welfare(I already have forms for 8 weeks) or once Covid 19 is on payslip I cannot claim that.I tried website and ring Social Welfare but couldnt get anyone.
Thanks

You are now on the new scheme. It should be 70% of your usual net pay as calculated by the formula.
You cannot claim any other relief

Hooked

Any advice here?

I've heard we'll have to pay tax on this subsidy in future months?

My salary (Gross is literally a few Euro over 37,500) was paid in full this week BUT my payslip has 400.10 of that as the subsidy? And the rest as a MINUS figure from my tax? PAYE -171.14 USC -13.32 to give me my usual "take home" of 579 euro... With my employer adding nothing, it seems?

I'm working my usual 5 day, 37.5 hr week?

What is going on?


They've also decided to close tomorrow and Friday and take it out of our holidays? 2 days that they are seemingly not paying for?


Any input/advice is much appreciated...

Seve OB

Hooked wrote: »

Any advice here?

I've heard we'll have to pay tax on this subsidy in future months?

My salary (Gross is literally a few Euro over 37,500) was paid in full this week BUT my payslip has 400.10 of that as the subsidy? And the rest as a MINUS figure from my tax? PAYE -171.14 USC -13.32 to give me my usual "take home" of 579 euro... With my employer adding nothing, it seems?

I'm working my usual 5 day, 37.5 hr week?

What is going on?


They've also decided to close tomorrow and Friday and take it out of our holidays? 2 days that they are seemingly not paying for?


Any input/advice is much appreciated...

Sounds harsh, and possibly against the law. They have Essentially hit you with a pay cut. The subsidy is supposed to cover those on reduced hours To keep them on the books instead of getting laid off

You say employer is paying nothing. Is there even a penny in there Because they have to do at least that for this to work. A penny obviously equates to nothing but just have a look for it on your wage slip just to be sure because there might indeed be another amount in there.

Shamboo1801

Very informative thread, and thanks for all the submissions. Glad I stumbled across it. Just a query on my pay slip if anyone could help. My wages are normally around €750 take home. Now my payslip shows €350 covid payment, paye is -63, usc -13 and basic pay .01c. Total pay €427. I'm not getting a top up, so my query is, this tax at the end of the year people are inquiring about, would I be liable if I'm not getting topped up? Just want to know if I should be expecting a hit at the end of the year. Thanks again for all your inputs.

Jacovs

Another question on this, from an employee.

Usually full time employed.
The week of 23-29 March I worked a short week, 3 days. Claimed from social for the other 2 days, no problem, got that paid to me on 31 March. Received my regular payslip on 2 April for the 2 weeks 16-29 March. This to be my last payslip then.

On 27 March I was laid off effective 30 March, letter stating I would not be paid during this period. Informed social welfare and they changed me to jobseekers benefit and I got a 2 week payment off them yesterday. Again everything as it should be, social welfare very quick and good to deal with.

Now today out of nowhere our company sends an email to say they have decided to avail of this wage subsidy scheme and to expect an additional payslip for the period 16-29 March, which I then got soon after. Also dated 2 April, same as previous payslip. Amount of €350 on the payslip, which im not sure where they got that number from.

Asked my manager whats the story since all employees claiming social and now getting paid again, but was told to call revenue to sort it out, which I will do tomorrow.

Also, they are only doing this for employees that were laid off after the scheme started 26 March. I told them this is wrong, should be available to all who were employed on 29 february according to the gov.ie website.

Just wondering did the company **** up by doing it 2 weeks late and is it right that I have to sort this out myself with revenue? Any advice?

Hooked

Seve OB wrote: »

Sounds harsh, and possibly against the law. They have Essentially hit you with a pay cut. The subsidy is supposed to cover those on reduced hours To keep them on the books instead of getting laid off

You say employer is paying nothing. Is there even a penny in there Because they have to do at least that for this to work. A penny obviously equates to nothing but just have a look for it on your wage slip just to be sure because there might indeed be another amount in there.

Firstly - Thanks for your input.

My employer is contributing nothing. Zero.

I’ll be onto them on Tuesday. We were told initially that we’d be on a 3 day week.., with 1/3 laid off ‘temporarily’... then told we all had our jobs ‘as normal’ (once the subsidy was announced) and I assumed my employer would contribute to my salary... with a top up

So if they are contributing nothing.., am I technically on protective notice? It all Smells off to me.

Seve OB

chops018 wrote: »

PM sent. Thanks.

Replied to your pm.
Should give you a clear idea

Jafin

Seve OB wrote: »

that sounds bang on. no you won't be liable as such for the 63.47 or 13.10. however later in the year, the 305 will incur a tax change. however, tax credits might offset this.

its hard to tell what will happen to anybody later in the year because pay rates change and nobody knows if they will still be getting paid at all!

Ahhh ok that makes sense, thank you so much! I was worried that I'd have to repay this €76-ish a week at the end of the year or something.

Seve OB

Shamboo1801 wrote: »

Very informative thread, and thanks for all the submissions. Glad I stumbled across it. Just a query on my pay slip if anyone could help. My wages are normally around €750 take home. Now my payslip shows €350 covid payment, paye is -63, usc -13 and basic pay .01c. Total pay €427. I'm not getting a top up, so my query is, this tax at the end of the year people are inquiring about, would I be liable if I'm not getting topped up? Just want to know if I should be expecting a hit at the end of the year. Thanks again for all your inputs.

Possibly and probably. It’s just so hard to tell. All your tax is based on cumulative figures so it just depends on what you earn between now and dec 31 (including and social welfare amounts)

Seve OB

Jacovs wrote: »

Another question on this, from an employee.

Usually full time employed.
The week of 23-29 March I worked a short week, 3 days. Claimed from social for the other 2 days, no problem, got that paid to me on 31 March. Received my regular payslip on 2 April for the 2 weeks 16-29 March. This to be my last payslip then.

On 27 March I was laid off effective 30 March, letter stating I would not be paid during this period. Informed social welfare and they changed me to jobseekers benefit and I got a 2 week payment off them yesterday. Again everything as it should be, social welfare very quick and good to deal with.

Now today out of nowhere our company sends an email to say they have decided to avail of this wage subsidy scheme and to expect an additional payslip for the period 16-29 March, which I then got soon after. Also dated 2 April, same as previous payslip. Amount of €350 on the payslip, which im not sure where they got that number from.

Asked my manager whats the story since all employees claiming social and now getting paid again, but was told to call revenue to sort it out, which I will do tomorrow.

Also, they are only doing this for employees that were laid off after the scheme started 26 March. I told them this is wrong, should be available to all who were employed on 29 february according to the gov.ie website.

Just wondering did the company **** up by doing it 2 weeks late and is it right that I have to sort this out myself with revenue? Any advice?

The company is right, scheme only came into place and replaces previous scheme. Your average net pay is more than 586 so that’s why the amount is 350. It makes no difference to you, all you would get on social would be 350, now you are at least back on the employers books. Call revenue and tell them to stop any payments you have personally claimed as your employer has the scheme in place now, otherwise they will chase you for any overpayments.

It should settle down over the next week or so.

Heres Johnny

Couple of payroll guys here so just checking I ran 2 payrolls correctly

Picking a random amount here, something close to typical of the employees,and I've been topping up to 100%

Normal take home pay (calculated using 9 week average) 550

Subsidy available 385 euro (70%)
Top up (gross pay) 165 euro (30%)

Makes it 550

And when tax is calculated it could be a refund of say 50 euro

So the guy formerly taking home 550 is now 600 in his pocket

Even though people are not meant to take home more than normal take home pay I understand if this is caused by tax refund its all OK.....

Am I all above board here?

mickdw

Ive spoken to a number of small employers whose accountants have all told them to let staff go as opposed to running the 70 percent scheme. Now there have been some clarifications since from revenue but it doesnt appear to be the windfall for business that some see it as.
That said, if a business is ticking over and having all their staff at work and having them paid by governement, it is dodgy as hell. My initial understanding was that it was for businesses where staff were told to go home but just to keep them employed.

Seve OB

Hooked wrote: »

Firstly - Thanks for your input.

My employer is contributing nothing. Zero.

I’ll be onto them on Tuesday. We were told initially that we’d be on a 3 day week.., with 1/3 laid off ‘temporarily’... then told we all had our jobs ‘as normal’ (once the subsidy was announced) and I assumed my employer would contribute to my salary... with a top up

So if they are contributing nothing.., am I technically on protective notice? It all Smells off to me.

I’m not up to speed now on the legal s so won’t comment there.
But technically you are now working a full week for less pay.
My advice...... talk to your employer.

Seve OB

Heres Johnny wrote: »

Couple of payroll guys here so just checking I ran 2 payrolls correctly

Picking a random amount here, something close to typical of the employees,and I've been topping up to 100%

Normal take home pay (calculated using 9 week average) 550

Subsidy available 385 euro (70%)
Top up (gross pay) 165 euro (30%)

Makes it 550

And when tax is calculated it could be a refund of say 50 euro

So the guy formerly taking home 550 is now 600 in his pocket

Even though people are not meant to take home more than normal take home pay I understand if this is caused by tax refund its all OK.....

Am I all above board here?

You are above board. But I’ll just point out the confusion.
Take home pay does not necessarily = average net which has a defined formula for calculating.
There is no problem with take home pay being more than normal. As long as the top up plus subsidy are not greater than average net (as opposed to take home) then you are ok.

Seve OB

mickdw wrote: »

Ive spoken to a number of small employers whose accountants have all told them to let staff go as opposed to running the 70 percent scheme. Now there have been some clarifications since from revenue but it doesnt appear to be the windfall for business that some see it as.
That said, if a business is ticking over and having all their staff at work and having them paid by governement, it is dodgy as hell. My initial understanding was that it was for businesses where staff were told to go home but just to keep them employed.

Staff with little or no work. We have staff on it doing 2 or 3 days a week. When we get through it and hopefully build up a bit of cash again, we’ll look after the ones who gave a dig out.

jammiedodgers

Shamboo1801 wrote: »

Very informative thread, and thanks for all the submissions. Glad I stumbled across it. Just a query on my pay slip if anyone could help. My wages are normally around €750 take home. Now my payslip shows €350 covid payment, paye is -63, usc -13 and basic pay .01c. Total pay €427. I'm not getting a top up, so my query is, this tax at the end of the year people are inquiring about, would I be liable if I'm not getting topped up? Just want to know if I should be expecting a hit at the end of the year. Thanks again for all your inputs.

See below from the Revenue FAQ

Is the wage subsidy taxable on the employee?
The payments are liable to income tax; however, the subsidy is not taxable in real-time through the PAYE system
during the period of the Subsidy scheme. Instead the employee will be liable for tax on the subsidy amount paid to
them by their employer by way of review at the end of the year.
When an end of the year review takes place, it may be the case that an employee’s unused tax credits will cover any
further liability that may arise. Where this is not the case, and should an Income Tax liability arise, it is normal
Revenue practice to collect any tax owing in manageable amounts by reducing an individual’s tax credits for a future
year(s) in order to minimise any hardship. Additionally, if an individual has any additional tax credits to claim, for
example health expenses, this will also reduce any tax that may be owing.

Jacovs

Seve OB wrote: »

The company is right, scheme only came into place and replaces previous scheme. Your average net pay is more than 586 so that’s why the amount is 350. It makes no difference to you, all you would get on social would be 350, now you are at least back on the employers books. Call revenue and tell them to stop any payments you have personally claimed as your employer has the scheme in place now, otherwise they will chase you for any overpayments.

It should settle down over the next week or so.

My average net wages was over €620 per week, does that not entitled me to the full €410?

Im getting over €420 off the social at the moment due to personal circumstances, so I wouldnt mind dropping to €410, but dropping to €350 is a big drop.

Seve OB

mickdw wrote: »

Ive spoken to a number of small employers whose accountants have all told them to let staff go as opposed to running the 70 percent scheme. Now there have been some clarifications since from revenue but it doesnt appear to be the windfall for business that some see it as.
That said, if a business is ticking over and having all their staff at work and having them paid by governement, it is dodgy as hell. My initial understanding was that it was for businesses where staff were told to go home but just to keep them employed.

Meant to also add, it’s not meant to be a windfall, just a subsidy. It’s no more really that the staff would get by going on the scratcher so it’s keeping people off the live register and tied to their employer.

Also, some staff would be better off going on the scratch, up to the higher earning directors, so it’s just clever advice from the accountants to recommend this in certain cases.

jammiedodgers

Jacovs wrote: »

My average net wages was over €620 per week, does that not entitled me to the full €410?

Im getting over €420 off the social at the moment due to personal circumstances, so I wouldnt mind dropping to €410, but dropping to €350 is a big drop.

Nope -

During the short transition period the Subsidy Scheme:
• Increases the maximum refundable payment to €410 or 70% of the employee’s Average Net Weekly Pay,
whichever is lesser, for employees earning less than or equal to €586 per week net.
• Increases the maximum refundable payment to €350 or 70% of the employee’s Average Net Weekly Pay,
whichever is lesser, for those earning over €586 per week net and less than or equal to €960 per week net.

Seve OB

Jacovs wrote: »

My average net wages was over €620 per week, does that not entitled me to the full €410?

Im getting over €420 off the social at the moment due to personal circumstances, so I wouldnt mind dropping to €410, but dropping to €350 is a big drop.

No. And this is where the scheme is stupid. If you average earnings are 585 you could get up to 410. But if your average earnings are 587 you only get 350.

Now to further complicate this, if your average earnings are a penny over 960, then you are entitled to nothing.

Now I say “you are entitled to” but that’s not strictly true. It is your employer who is entitled to the subsidy and they pass it on to you.

CrabRevolution

Seve OB wrote: »

I’m not up to speed now on the legal s so won’t comment there.
But technically you are now working a full week for less pay.
My advice...... talk to your employer.

Yeah it doesn't look right at all to me.

Previously the company got a week's work from an employee, and paid €500 for it.
But now the company gets a week's work from an employee for free, and the taxpayer pays the employee a much reduced salary?

I got the impression this scheme was for companies who have stopped/reduced trading and would be letting people off or giving them much reduced hours, to keep them still "employed" even if they're not doing any/much work. That scenario seems a major abuse of the scheme.

Jacovs

jammiedodgers wrote: »

Nope -

During the short transition period the Subsidy Scheme:
• Increases the maximum refundable payment to €410 or 70% of the employee’s Average Net Weekly Pay,
whichever is lesser, for employees earning less than or equal to €586 per week net.
• Increases the maximum refundable payment to €350 or 70% of the employee’s Average Net Weekly Pay,
whichever is lesser, for those earning over €586 per week net and less than or equal to €960 per week net.

Thanks, I havent seen this before, thought it was one rate across the board. Mind directing me to where this information is? Last information I read on gov.ie today had no mention of it.

This also raises the question, why one of my supervisors got a payment of over €400 if they are meant to be on more money than me.

Heres Johnny

Seve OB wrote: »

You are above board. But I’ll just point out the confusion.
Take home pay does not necessarily = average net which has a defined formula for calculating.
There is no problem with take home pay being more than normal. As long as the top up plus subsidy are not greater than average net (as opposed to take home) then you are ok.

Thanks Seve, you're doing good work on this thread. Yes, sorry I did mean net (Gross less paye less prsi less usc)

One last question, in weeks 1 and 2 of this I moved employees to week 1 status and there was no tax refund, which is fine as we were paying them 100% anyway. In effect, I was saving up their tax refunds for them
Next week some staff will be moving to between 75% of net pay for those with no work at all to 100% for those still with 5 days work. And gradients of 80, 85, 90 and 95% for 1, 2, 3 and 4 days work.
I am thinking of releasing the tax refunds next week, will the tax refunds I have been saving up for them be released for 3 weeks all in one?

I do realise that the more tax refunds I allow now the more chance there is of a tax bill in the future, which I'm fine with to be honest.

Just wondering now did I do wrong by not allowing refunds in weeks 1 and 2?

Seve OB

Jacovs wrote: »

Thanks, I havent seen this before, thought it was one rate across the board. Mind directing me to where this information is? Last information I read on gov.ie today had no mention of it.

This also raises the question, why one of my supervisors got a payment of over €400 if they are meant to be on more money than me.

It’s all over the gvt website if you just google the scheme.

You supervisor could indeed be earning more than you. This scheme does not go on earnings. It all depends on their tax position. It could be as simple as them paying back tax from last year now or how their tax credits are structured...... another reason why the scheme is stupid and unfair

jammiedodgers

Jacovs wrote: »

Thanks, I havent seen this before, thought it was one rate across the board. Mind directing me to where this information is? Last information I read on gov.ie today had no mention of it.

This also raises the question, why one of my supervisors got a payment of over €400 if they are meant to be on more money than me.

Here is the Reveue FAQ

Seve OB

Heres Johnny wrote: »

Thanks Seve, you're doing good work on this thread. Yes, sorry I did mean net (Gross less paye less prsi less usc)

One last question, in weeks 1 and 2 of this I moved employees to week 1 status and there was no tax refund, which is fine as we were paying them 100% anyway. In effect, I was saving up their tax refunds for them
Next week some staff will be moving to between 75% of net pay for those with no work at all to 100% for those still with 5 days work. And gradients of 80, 85, 90 and 95% for 1, 2, 3 and 4 days work.
I am thinking of releasing the tax refunds next week, will the tax refunds I have been saving up for them be released for 3 weeks all in one?

I do realise that the more tax refunds I allow now the more chance there is of a tax bill in the future, which I'm fine with to be honest.

Just wondering now did I do wrong by not allowing refunds in weeks 1 and 2?

Thanks for the kudos. Happy to help with my knowledge.

Why did you move staff to week 1 basis? Unless told to by revenue you should never do this, indeed, revenue don’t even tell you that it’s ok to do this now, it should be all done via the rpn’s

As my posts above, just be careful if you are still expecting staff to do a full week but still including them on the scheme as it will be a pay cut to them. I’m assuming that when you mention the %s you are talking about topping them up to the average net, so it won’t be paying them their full wage. If you go above the average net, you will have to reduce the subsidy, and if you go all the way up to their normal gross, then there is no subsidy available

Jacovs

Seve OB wrote: »

It’s all over the gvt website if you just google the scheme.

You supervisor could indeed be earning more than you. This scheme does not go on earnings. It all depends on their tax position. It could be as simple as them paying back tax from last year now or how their tax credits are structured...... another reason why the scheme is stupid and unfair

Thanks, I went looking and found the information.

Originally I was looking at this (https://www.gov.ie/en/publication/f24dcc-general-infomation-on-the-temporary-covid-19-wage-subsidy-scheme/) but it must be outdated.

Id say because I have tax credits from my wife and other credits which brings my net pay to higher than a single person would be on higher wages.

That is a bit **** then. Any way to tell the employer not to bother so I can avail of higher social welfare payment until my job is available again? Id rather get paid by company but not at a loss of €70ish per week.

Heres Johnny

Seve OB wrote: »

Thanks for the kudos. Happy to help with my knowledge.

Why did you move staff to week 1 basis? Unless told to by revenue you should never do this, indeed, revenue don’t even tell you that it’s ok to do this now, it should be all done via the rpn’s

As my posts above, just be careful if you are still expecting staff to do a full week but still including them on the scheme as it will be a pay cut to them. I’m assuming that when you mention the %s you are talking about topping them up to the average net, so it won’t be paying them their full wage. If you go above the average net, you will have to reduce the subsidy, and if you go all the way up to their normal gross, then there is no subsidy available

Percentages are of average net, correct. I know I can't go to gross.
Moved them to week 1 as the tax refunds kind of threw me to be honest, at the time the revenue document layest version that was out said I couldn't pay more than normal net and when the tax refunds brought this above I thought I was wrong. Its since been clarified in later revisions that a tax refund bringing it above is not to be included in calculations.

Seve OB

Heres Johnny wrote: »

Percentages are of average net, correct. I know I can't go to gross.
Moved them to week 1 as the tax refunds kind of threw me to be honest, at the time the revenue document layest version that was out said I couldn't pay more than normal net and when the tax refunds brought this above I thought I was wrong. Its since been clarified in later revisions that a tax refund bringing it above is not to be included in calculations.

Fair enough but just remember in future you should stick to the rpn’s unless Specifically told to change them by revenue.

What about the staff you have working full hours though and possibly those on 3 or 4 days a week. You are cutting their pay when you shouldn’t be.

kennethsmyth

Seve OB wrote: »

No. And this is where the scheme is stupid. If you average earnings are 585 you could get up to 410. But if your average earnings are 587 you only get 350.

Now to further complicate this, if your average earnings are a penny over 960, then you are entitled to nothing.

Now I say “you are entitled to” but that’s not strictly true. It is your employer who is entitled to the subsidy and they pass it on to you.

This is incorrect - you are mixing up what the company will be subsidized and what they will pay you. The SUBSIDY will drop to 350 after 586 and over 960 no subsidy to the company. However if the company is paying all other staff 70% to a max of 410 then they also need to do that a minimum for you otherwise it would be discrimination. Its not worth the company only paying you 350 if your normal net is much more as otherwise why would you continue to do any work at all if the covid payment from social is also 350 for 12 weeks