Wage Subsidy Scheme Issues

Dav010 wrote: »

https://revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-subsidy-scheme.aspx

Seems in contraction to what is published here.

• Income tax and USC will not be applied to the subsidy payment through the payroll.

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.

Seve OB wrote: »

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)

There is some ridiculously complex tapering thing that should be applied. See the table on page 16:
https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

So i never do payroll but i have been on sage here and there trying to fix things when something goes wrong and the last 2 weeks I've been there while they are doing our wages. The business is shut as we are non essential. They are really only used to doing it the same every week so they just aren't great at new things like this. No payroll dept etc, family business.

So i make 392.52 every week. It goes in as salary in sage. Never changes. How much do they enter into the new column govSub19 section? Because i think they are doing it wrong, by accident.

Anyone know what figure?

ZeroCool17 wrote: »

So i never do payroll but i have been on sage here and there trying to fix things when something goes wrong and the last 2 weeks I've been there while they are doing our wages. The business is shut as we are non essential. They are really only used to doing it the same every week so they just aren't great at new things like this. No payroll dept etc, family business.

So i make 392.52 every week. It goes in as salary in sage. Never changes. How much do they enter into the new column govSub19 section? Because i think they are doing it wrong, by accident.

Anyone know what figure?

when you say you "make"... what does that mean? looks like its your gross to me the way you phrase it.

so you need to look at your gross and take away all tax and prsi. then if this figure is the exact same for the first 9 weeks of the year take 70% of it. from what you indicate, it will most likely be under any threshold.
so your company can claim this 70% amount from the government in the govsub19 column.
then if you have cash reserves and want to take it, you can pay yourself a top up amount of the further 30%

and who is "they" you mention sage, that is the software, but you probably have a payroll company processing the wages. as far as i know, sage do not process payroll but i could be mistaken.
anyway, "they" should be up to speed by now and if they aren't then i would be wondering why not!!!!

ZeroCool17 wrote: »

Make = Net, sorry as I said I don't do payroll. I work in a shop. "They" is my boss the owner. He is older lets say. It is not my business. I work 9-6 and go home! The package is sage micropay I think it is. I watched him do it the last 2 weeks. To me he should be entering for me 274.76 but he's putting in a figure in the govsub column of around 318/320 until it matches in and around to my net of 392.52 on the right hand side.

This probably makes no sense to you. Sorry I shouldn't have asked. Not my business at the end of the day, just wanted to see whether he's doing it right. He's a good boss but crap at this stuff. And yes I know he shouldn't be but he is! He honestly thinks he's right.

He is paying me my full wage.

As you say make = net I understand that to be that's how much you're getting in to your bank account (or receiving 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.

in the Revenue FAQ - 4.4.1 shows a worked example of this being calculated if you want to take a look Revenue FAQ

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: Revenue FAQ

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.

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.

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

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

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?

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.

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!

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!

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 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 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.