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Wage Subsidy Question

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  • 26-05-2020 9:38am
    #1
    tiredblondie
    Registered Users Posts: 706 ✭✭✭


    Hi
    Just a quick question on wage subsidy scheme.

    Normal salary per fortnight is 1500 before any taxes are taken.
    Normal take home pay is 1158

    Wage subsidy for 2 weeks = 700
    Company top up for 2 weeks = 498
    Salary before taxes = 1198
    Take home pay is 1158 (same as normal)

    Is this correct?
    I'm not arguing it or anything as the take home pay is correct, i just wasn't sure on the before tax figures!


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    #2
    Wuff Wuff
    Closed Accounts Posts: 1,429 ✭✭✭Wuff Wuff


    the subsify is non taxable so you'll only be taxed on the 498


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    #3
    ibarelycare
    Registered Users Posts: 58,456 ✭✭✭✭ibarelycare


    Wuff Wuff wrote: »
    the subsify is non taxable so you'll only be taxed on the 498

    Just to add to this, it's not being taxed through payroll, but it is liable to tax and anyone who received it will have a liability at the end of the year, which will most likely be collected by a reduction in credits and cut off points over the next year or two.


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    #4
    tiredblondie
    Registered Users Posts: 706 ✭✭✭tiredblondie


    Wuff Wuff wrote: »
    the subsify is non taxable so you'll only be taxed on the 498

    Correct, yes, i am only taxed on the 498euro


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    #5
    tiredblondie
    Registered Users Posts: 706 ✭✭✭tiredblondie


    ibarelycare wrote: »
    Just to add to this, it's not being taxed through payroll, but it is liable to tax and anyone who received it will have a liability at the end of the year, which will most likely be collected by a reduction in credits and cut off points over the next year or two.

    See, that's the bit i don't understand!
    When my take home pay is the same as before, am i then not losing out somewhat on tax?

    On the first pay run, yes, i did get some tax back, not a huge amount but a bit which i have put away.....but i doubt that would cover the tax on the 350 a week over however many weeks - and would it be taxed at 20% or 40%?!


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    #6
    donkey10
    Registered Users Posts: 389 ✭✭donkey10


    ibarelycare wrote: »
    Just to add to this, it's not being taxed through payroll, but it is liable to tax and anyone who received it will have a liability at the end of the year, which will most likely be collected by a reduction in credits and cut off points over the next year or two.

    Just got my own first weekly payslip myself today and its the first week of being on the TWSS. The net pay was the same as my previous net before all the COvid started. The subsidy im entitled to is 350 and top up of 200. I didnt get any tax back despite not being working the past 7 weeks but i think that is now due to being on a week 1 basis rather than cumulative.

    Where the 350 is taxed at the end of the year realistically my net pay is really lower if i am putting some money aside to pay the tax. Therefore in reality im worse off now overall in terms of wages. Just trying to get my head around this!


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    #7
    tiredblondie
    Registered Users Posts: 706 ✭✭✭tiredblondie


    donkey10 wrote: »
    Just got my own first weekly payslip myself today and its the first week of being on the TWSS. The net pay was the same as my previous net before all the COvid started. The subsidy im entitled to is 350 and top up of 200. I didnt get any tax back despite not being working the past 7 weeks but i think that is now due to being on a week 1 basis rather than cumulative.

    Where the 350 is taxed at the end of the year realistically my net pay is really lower if i am putting some money aside to pay the tax. Therefore in reality im worse off now overall in terms of wages. Just trying to get my head around this!


    Doesn't make sense, does it!
    And we won't know either until the end of the year either!
    It's when people say keep 30% of the 350 back for taxes that worries me....if the company does it for 10 weeks say, that's over 1k in tax that may be due but we still come out with the same wage!


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    #8
    donkey10
    Registered Users Posts: 389 ✭✭donkey10


    tiredblondie wrote: »
    Doesn't make sense, does it!
    And we won't know either until the end of the year either!
    It's when people say keep 30% of the 350 back for taxes that worries me....if the company does it for 10 weeks say, that's over 1k in tax that may be due but we still come out with the same wage!

    But we wont come out with the same wage?? Fair enough our net pay now is the same but once the subsidy is taxed at end of year we will have a lower net wage again. Is that correct? So confusing


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    #9
    Turkish1
    Registered Users Posts: 273 ✭✭Turkish1


    donkey10 wrote: »
    But we wont come out with the same wage?? Fair enough our net pay now is the same but once the subsidy is taxed at end of year we will have a lower net wage again. Is that correct? So confusing

    Yes that is correct. You will effectively be worse off that previously - however it is likely increasing the chances of your company being able to retain you as opposed to being made redundant.

    It is a difficult situation to be in, but you will pay PAYE and USC (no PAYE) on the subsidy amount when you annual tax is calculated. Likely they will do this by reducing your tax credits next year so you will see slightly lower net pay next year (all things being equal)


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