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Covid-19 wage subsidy tax liability

  • 28-08-2020 9:28am
    #1
    VonLuck
    Registered Users, Registered Users 2 Posts: 2,363 ✭✭✭


    Sorry if this has been asked before but I can't seem to find a clear answer anywhere.

    Does anyone know how to calculate the tax liability that will be incurred as a result of the covid-19 wage subsidy scheme? I'm aware that I will have to pay tax on the subsidy received but I can't for the life of me find out how much it will be.

    To make this more complicated, I'm paying into a pension scheme through my employer which is based on a percentage of my gross salary. So this reduced while I was on the scheme and am not sure what effect, if any, this has on the overall calculation.

    Any ideas?


Comments

  • #2
    Nuttzz
    Registered Users, Registered Users 2 Posts: 3,784 ✭✭✭Nuttzz


    Honestly I dont think anyone knows, I remember reading at one stage it would be 33% of what you received. Personally I looked at the difference between my tax bill on my precovid payslip and the post covid payslip and stuck it away to use if they came knocking for this.


  • #3
    Geuze
    Registered Users, Registered Users 2 Posts: 14,039 ✭✭✭✭Geuze


    VonLuck wrote: »
    Sorry if this has been asked before but I can't seem to find a clear answer anywhere.

    Does anyone know how to calculate the tax liability that will be incurred as a result of the covid-19 wage subsidy scheme? I'm aware that I will have to pay tax on the subsidy received but I can't for the life of me find out how much it will be.

    To make this more complicated, I'm paying into a pension scheme through my employer which is based on a percentage of my gross salary. So this reduced while I was on the scheme and am not sure what effect, if any, this has on the overall calculation.

    Any ideas?


    Calculate your annual income.

    Apply the SRCOP, tax credits, etc., and calculate your income tax due.

    Then compare this to what tax you have already paid??


  • #4
    VonLuck
    Registered Users, Registered Users 2 Posts: 2,363 ✭✭✭VonLuck


    Geuze wrote: »
    Calculate your annual income.

    Apply the SRCOP, tax credits, etc., and calculate your income tax due.

    Then compare this to what tax you have already paid??

    So are you saying that the tax liability is based on what I would have paid if the wage subsidy scheme was never introduced?

    If so, how does it work with pension payments? This is based off a percentage of my gross income for the month, but seeing as this was reduced I paid less into my pension fund. So would the tax be based off this additional gross that didn't go towards the pension fund being taxed?

    I hope I'm making some sort of sense...


  • #5
    JustAThought
    Registered Users, Registered Users 2 Posts: 5,324 ✭✭✭JustAThought


    You are making a LOT of senss.

    Unfortunately not many in the govt. are.

    Personally I’d send a registered letter to both the minister for employment and revenue and keep both replies.

    It seems no-one in ‘authority’ has thought it through and everyone has their own ideas.


    At least if you have non responses or different official responses you will have some comeback in the future ir if revenue decide to implement ‘penalties’.


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