Wage Subsidy Scheme Issues

CiarraiAbu2 · 03-04-2020 1:32pm

Dav010 wrote: »

It is optional, if the employee is off, as most are at the moment, and employers were meant/expected to top up to usual net wage, would it not make more sense to lay the employee off? Think about it, then you will understand why it is optional.

If the employee wasn't working then the employer would not be receiving the subsidy. In good faith they should be attempting to pay the difference, if they need to trade without a wage cost the are fecked anyway. In a couple of weeks time they are going to have to pay 30% anyway.

03-04-2020 1:48pm

CiarraiAbu2 wrote: »

If the employee wasn't working then the employer would not be receiving the subsidy. In good faith they should be attempting to pay the difference, if they need to trade without a wage cost the are fecked anyway. In a couple of weeks time they are going to have to pay 30% anyway.

Please stop. The Government encouraged business owners to apply for the subsidy even if the employee can’t work. It it to preserve the connection between the employee/employer so that jobs are preserved, they can get back to work quickly and save people from going into the unemployment register.

Most companies are now in “hibernation”, reducing outflow, saving cash reserves so that they can trade again. In a couple of weeks time, hopefully there will be income coming into businesses so they can pay staff full wage, if the company has to cease trading because they could not safeguard cash reserves due to paying staff while there is no income coming in, well that’s the worst end result.

CiarraiAbu2 · 03-04-2020 2:03pm

Dav010 wrote: »

Please stop. The Government encouraged business owners to apply for the subsidy even if the employee can’t work. It it to preserve the connection between the employee/employer so that jobs are preserved, they can get back to work quickly and save people from going into the unemployment register.

Most companies are now in “hibernation”, reducing outflow, saving cash reserves so that they can trade again. In a couple of weeks time, hopefully there will be income coming into businesses so they can pay staff full wage, if the company has to cease trading because they could not safeguard cash reserves due to paying staff while there is no income coming in, well that’s the worst end result.

What has the above got to do with employers paying staff the 350 and asking them to do a full weeks work.
I don't have any problem with the subsidy and those company's that can pay and remain open, but you think it's alright for employers to pay their staff the bare minimum and ask them to work.
And by the way this shut down is not ending next week.

DartBhoy1888 · 03-04-2020 2:54pm

Is the wage subsidy payment calculated from your average take home pay from Jan 1st to now? Trying to figure out how much my employer will be paying me. Any help much appreciated

Stratvs · 03-04-2020 3:02pm

DartBhoy1888 wrote: »

Is the wage subsidy payment calculated from your average take home pay from Jan 1st to now? Trying to figure out how much my employer will be paying me. Any help much appreciated

The basis is the average net for the first 9 weeks of 2020 (Jan/Feb)

collsoft · 04-04-2020 12:47am

Stratvs wrote: »

I've done payroll for an employer who is closed where they are paying the employee their normal net. ie they have topped up the 70% subsidy to 100% normal net. Lets say it was €550 net. The employer gets €385 back from Revenue. So it costs the employer €165 net. The €165 net grosses up to say €200. The €200 is taxable but the €385 is not. So the person's tax credits more than cover the €200. That is resulting in a tax/usc refund to the employee of around €30. So the employee gets €550+€30=€580.

The €30 tax/usc refund is a problem as ultimately the €385 subsidy is taxable but can't be taxed in payroll under the scheme. So at the year end Revenue will be looking for that back by adjusting credits going forward. I'd have thought putting employees on W1/M1 basis would stop that happening and still leave employee with normal pay.

Hi Stratvs,

I first have to declare that I am the owner of CollSoft Payroll in case anybody thinks I am trying to hide who I am.

Your example above is incorrect and will result in the employer receiving a reduced subsidy from Revenue when reconciliation occurs.

If (Tax Free Payment + Employer Top Up > Average Net Pay) then Revenue will taper (reduce) the subsidy by the excess amount.

In your example, the top-up of €165 should not be "Grossed Up" to €200

The Average Net Pay in your example is €550

The Tax Free Payment you made is €385 which when you add €200 will be seen by Revenue as a payment of €585

This will reduce the subsidy from Revenue (at reconciliation) by €35

This employer will ultimately only receive €350 from Revenue not €385.

So in your example, the employer can only pay €385 non taxable and a taxable payment of €165.

The employee will not receive the "Average Net Pay" before tax refunds.

The scheme is not perfect, but any employer who tries to "Re-Gross" the Employer Top Up is in for a surprise down the road

capefear · 04-04-2020 2:30am

collsoft wrote: »

Hi Stratvs,

I first have to declare that I am the owner of CollSoft Payroll in case anybody thinks I am trying to hide who I am.

Your example above is incorrect and will result in the employer receiving a reduced subsidy from Revenue when reconciliation occurs.

If (Tax Free Payment + Employer Top Up > Average Net Pay) then Revenue will taper (reduce) the subsidy by the excess amount.

In your example, the top-up of €165 should not be "Grossed Up" to €200

The Average Net Pay in your example is €550

The Tax Free Payment you made is €385 which when you add €200 will be seen by Revenue as a payment of €585

This will reduce the subsidy from Revenue (at reconciliation) by €35

This employer will ultimately only receive €350 from Revenue not €385.

So in your example, the employer can only pay €385 non taxable and a taxable payment of €165.

The employee will not receive the "Average Net Pay" before tax refunds.

The scheme is not perfect, but any employer who tries to "Re-Gross" the Employer Top Up is in for a surprise down the road

Hi Collsoft.

Could you explain what you mean on the last line about the re gross

Thanks a million

Stratvs · 04-04-2020 11:05am

collsoft wrote: »

Hi Stratvs,

I first have to declare that I am the owner of CollSoft Payroll in case anybody thinks I am trying to hide who I am.

Your example above is incorrect and will result in the employer receiving a reduced subsidy from Revenue when reconciliation occurs.

If (Tax Free Payment + Employer Top Up > Average Net Pay) then Revenue will taper (reduce) the subsidy by the excess amount.

In your example, the top-up of €165 should not be "Grossed Up" to €200

The Average Net Pay in your example is €550

The Tax Free Payment you made is €385 which when you add €200 will be seen by Revenue as a payment of €585

This will reduce the subsidy from Revenue (at reconciliation) by €35

This employer will ultimately only receive €350 from Revenue not €385.

So in your example, the employer can only pay €385 non taxable and a taxable payment of €165.

The employee will not receive the "Average Net Pay" before tax refunds.

The scheme is not perfect, but any employer who tries to "Re-Gross" the Employer Top Up is in for a surprise down the road

Thanks for that, I understand the tapering issue now. Amounts I quoted were from memory as didn’t have the actual amounts in front of me (never a good idea). I see now the actual amounts in that case were €524 net ( same every week YTD). Single person normal crs/cop. My payroll calcs 70% Non-taxable at €366.80 and taxable gross pay of €157.20. Net comes in at €562.51 which is due to €38.51 in PAYE/USC refunds caused by taxable being less than crs etc. Does that sound right?

Won’t the PAYE/usc refunds cause problems later with the subsidy being taxable but not currently taxed? Would it be preferable if new RPNs issued for everyone on the scheme putting them on W1/M1 ?

Thanks help and clarification. With 4 x updates to the FAQ so far it’s hard to keep up.

ilovespudss · 05-04-2020 12:58am

collsoft wrote: »

Hi Stratvs,

I first have to declare that I am the owner of CollSoft Payroll in case anybody thinks I am trying to hide who I am.

Your example above is incorrect and will result in the employer receiving a reduced subsidy from Revenue when reconciliation occurs.

If (Tax Free Payment + Employer Top Up > Average Net Pay) then Revenue will taper (reduce) the subsidy by the excess amount.

In your example, the top-up of €165 should not be "Grossed Up" to €200

The Average Net Pay in your example is €550

The Tax Free Payment you made is €385 which when you add €200 will be seen by Revenue as a payment of €585

This will reduce the subsidy from Revenue (at reconciliation) by €35

This employer will ultimately only receive €350 from Revenue not €385.

So in your example, the employer can only pay €385 non taxable and a taxable payment of €165.

The employee will not receive the "Average Net Pay" before tax refunds.

The scheme is not perfect, but any employer who tries to "Re-Gross" the Employer Top Up is in for a surprise down the road

One question. As you've explained above, if the employer tops up by more than the allowed top up amount, the subsidy is tapered. In the case where subsudy+top up+tax refund results in a net pay greater than the employees average net pay, is the subsidy tapered then? Will payroll need to reduce the top up amount to allow for the tax refund, so as not to exceed the employees average net pay?

highgiant1985 · 05-04-2020 1:08am

ilovespudss wrote: »

One question. As you've explained above, if the employer tops up by more than the allowed top up amount, the subsidy is tapered. In the case where subsidy+top up+tax refund results in a net pay greater than the employees average net pay, is the subsidy tapered then? Will payroll need to reduce the top up amount to allow for the tax refund, so as not to exceed the employees average net pay?

Allowing any Tax & USC refund through is fine and won't impact on the subsidy.

ERs will be refunded the subsidy + any tax/usc refund provided that the subsidy+top up amount hasn't exceeded Employees Revenues average net.

NB the Revenue average net pay is NOT net pay as you'd see on your payslip its your Gross Pay from all Jan/Feb payment submission less any statutory deductions / number of PRSI Weeks (capped at 9).

The collsoft website (they posted earlier in this thread) is really good in how they've a calculator on the front page that shows the subsidy amount and max top up possible:https://www.collsoft.ie/

ilovespudss · 05-04-2020 5:34pm

highgiant1985 wrote: »

Allowing any Tax & USC refund through is fine and won't impact on the subsidy.

ERs will be refunded the subsidy + any tax/usc refund provided that the subsidy+top up amount hasn't exceeded Employees Revenues average net.

NB the Revenue average net pay is NOT net pay as you'd see on your payslip its your Gross Pay from all Jan/Feb payment submission less any statutory deductions / number of PRSI Weeks (capped at 9).

The collsoft website (they posted earlier in this thread) is really good in how they've a calculator on the front page that shows the subsidy amount and max top up possible:https://www.collsoft.ie/

Thanks for that

Stratvs · 05-04-2020 5:46pm

highgiant1985 wrote: »

The collsoft website (they posted earlier in this thread) is really good in how they've a calculator on the front page that shows the subsidy amount and max top up possible:https://www.collsoft.ie/

I just watched the Collsoft webinar from 03/04 and found it excellent.

tina1040 · 05-04-2020 5:58pm

How is the 70% calculated when there is a pension deduction?

Pistachio19 · 06-04-2020 4:33pm

tina1040 wrote: »

How is the 70% calculated when there is a pension deduction?

From my understanding, your employees net figure will be gross less PAYE/PRSI/USC. You don't deduct the pension amount.

So for example, if your employees usual gross monthly salary is €3000
PAYE is €400
USC is €100
PRSI is €100
Employees pension contribution is €200

Ordinarily his net pay would be €2200

However to calculate the 70% net pay, as per Revenue instruction, you will base it on €2400 (pension figure is not deducted from gross).

That's my understanding - we had figures done up based on the actual net salary our employee received to his bank account. However when we went to input the subsidy/top up figures into our payroll today their calculation was different. After contacting our accountant he confirmed the discrepancy was with the pension.

I hope this makes sense. Our employee will now have quite a substantial PAYE refund so will be getting more into his account than usual. I'm not sure how this balances out over the year.

ffocused · 06-04-2020 8:24pm

Is anyone else on the WSS and still expected to work full time?

The company I work for put my colleague (who works in the same position as me) on it last Tuesday and he is not expected to work.
I was put on it on Friday and am still expected to work full time with no change in my hours whatsoever except that I am working from home.
The company is still open as parts of the business are classed as essential services.

I have also been moved from monthly pay to weekly pay.

Just Saying · 06-04-2020 9:19pm

Sono Topolino wrote: »

I work in tax so my sister asked me to help her apply for the Wage Subsidy Scheme for her business. While reading through the terms and conditions, I smelled a rat and asked advice from a solicitor who told me in no uncertain terms that my sister was opening herself up to legal jeopardy.

Solicitor friend said that by self-declaring that her LTD was experiencing an "inability to claim emoluments", she was admitting to trading while insolvent, and becomes personally liable for the company's debts (basically gives up LTD status). Now the Government has said that this is not the case, and Niall Cody was on Morning Ireland yesterday also saying the same thing. So there's that.

But still I have serious concerns: if you apply for this scheme in good faith, and in 6 months time you find that your business is in fact unable to continue trading, you go into receivership, can your creditors come after your debts? Can they seek a court declaration to this effect? It's a concern. The business will have been published on the Revenue list so this will be publicly available information. Wouldn't a judge be the one interpreting the points of law, not the Revenue for the Minister for Finance?

My sister wants to apply for this scheme as a way to keep her staff paid and her business ticking over, but we're both worried. To be clear: I'm not looking for legal advice, to see how other businesses are approaching this.

The Revenue clearly stated In their guidance on Friday 27th March that a company with cash reserves but experiencing economic disruption on the requisite scale was perfectly entitled to apply for the TWSS.Your post was a few days subsequent to this and was clearly based on an incorrect interpretation of the legislation.
It is disappointing that you have left an incorrect post on the thread for so long and I hope that you have not caused anyone to fail to apply for the scheme who should have done so.

Heres Johnny · 06-04-2020 9:23pm

Just Saying wrote: »

The Revenue clearly stated In their guidance on Friday 27th March that a company with cash reserves but experiencing economic disruption on the requisite scale was perfectly entitled to apply for the TWSS.Your post was a few days subsequent to this and was clearly based on an incorrect interpretation of the legislation.
It is disappointing that you have left an incorrect post on the thread for so long and I hope that you have not caused anyone to fail to apply for the scheme who should have done so.

Some of the tripe solicitors are coming out with over this is shocking. I think they're bored. Revenue are pretty good to deal with, if they say they'll give you money they will.

gb19815 · 07-04-2020 5:58pm

Hi if let go how long do you have to wait to claim tax back ?

theglobe · 07-04-2020 8:25pm

Hi all, hope everyone is keeping well. I'd appreciate some help.

I own a company with no staff and it's been decimated by the coronavirus. I'm still open but not taking a wage - am I eligible for anything?

Thanks for your help.

Heres Johnny · 07-04-2020 8:28pm

theglobe wrote: »

Hi all, hope everyone is keeping well. I'd appreciate some help.

I own a company with no staff and it's been decimated by the coronavirus. I'm still open but not taking a wage - am I eligible for anything?

Thanks for your help.

If you're a director and are paid through PAYE system and you were on payroll at 29th February you are eligible to pay yourself and claim back the wage subsidy which will be repaid 2 days after you submit your payroll. The amount of this subsidy that you can claim back will depend on your average wage from 1st Jan to 29th Feb

If you fulfil those conditions you can do it through your company

theglobe · 07-04-2020 8:33pm

Heres Johnny wrote: »

If you're a director and are paid through PAYE system and you were on payroll at 29th February you are eligible to pay yourself and claim back the wage subsidy which will be repaid 2 days after you submit your payroll. The amount of this subsidy that you can claim back will depend on your average wage from 1st Jan to 29th Feb

If you fulfil those conditions you can do it through your company

Thank you. My company is based in America but I domicile here and pay personal tax here. Would that still be okay?

jammiedodgers · 07-04-2020 8:44pm

Dav010 wrote: »

Up to. €410. The payment subsidy is 70% of net wage up to a max of €410.

For some reason, those who earn over €585 are only getting a max of €350.

Anyone know the reason for this?

Stratvs · 07-04-2020 9:10pm

jammiedodgers wrote: »

Anyone know the reason for this?

Take a look at this. It answers a lot of the questions people have.

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

fly_agaric · 07-04-2020 9:25pm

Heres Johnny wrote: »

Some of the tripe solicitors are coming out with over this is shocking. I think they're bored. Revenue are pretty good to deal with, if they say they'll give you money they will.

They were fairly quick out of the traps to try & poke some holes in it as not being "perfect". Not sure what the purpose of that was or what good it will do anyone right now. Same thing will probably happen if govt. starts trying to use some of its new powers to control this disease (the lawyers will show them who is boss...I just wish covid19 and problems it brings in its wake would pay attention to them too!).

Heres Johnny · 07-04-2020 9:58pm

Stratvs wrote: »

Take a look at this. It answers a lot of the questions people have.

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

It doesn't answer that one! I don't know the reasoning behind the sudden drop from 410 to 350 either and I've run 2 full payrolls under this new scheme.

07-04-2020 9:59pm

fly_agaric wrote: »

They were fairly quick out of the traps to try & poke some holes in it as not being "perfect". Not sure what the purpose of that was or what good it will do anyone right now. Same thing will probably happen if govt. starts trying to use some of its new powers to control this disease (the lawyers will show them who is boss...I just wish covid19 and problems it brings in its wake would pay attention to them too!).

To be fair, the Govt have admitted there are lots of holes in the legislation, it was written in a hurry, accountants weren’t even sure how it would work when it was announced, it was early last week before guidance was published. While the solicitor’s advice might have been well intended, it was questionable. An owner of a limited company who carries on trading while knowing it is insolvent can become personally liable, but applying for the wage subsidy in no way declares insolvency, it is available to any business who can show a 25% drop in income as a result of Covid-19. The whole point of the scheme is to keep businesses solvent and staff employed by subsidising labour costs. The solicitor just pulled the trigger without knowing what he/she was aiming at.

Heres Johnny · 07-04-2020 10:00pm

theglobe wrote: »

Thank you. My company is based in America but I domicile here and pay personal tax here. Would that still be okay?

I'd imagine it shouldn't make a difference once you've satisfied all the other criteria.

07-04-2020 10:10pm

Heres Johnny wrote: »

I'd imagine it shouldn't make a difference once you've satisfied all the other criteria.

This is one of the holes identified in the legislation, people living outside the jurisdiction can apply for unemployment payment. So at the moment, you can apply for unemployment payment, how it works when it transfers over to jobseekers in a couple of weeks is a different matter as obviously if you live abroad, you cannot declare that you are available for work here.

Also, to set up a mygovID might be a challenge as you have to confirm your mobile phone number/ID in a LA office.

DUBACC · 07-04-2020 10:16pm

One anomaly coming up for a few of my clients (accountant in practice).

A few clients are on a quarterly PAYE payment, and as a result their Q1 payment is not due until later this month. For various reasons, their February submission was late - reason they all gave was sure the payment isnt due until late April! Whatever the ins & outs of late submissions, the complete exclusion from the scheme is a pretty harsh penalty. Revenue have said they are unable to look at this on a case by case basis as the legislation around it is very restrictive.

theglobe · 07-04-2020 10:55pm

Dav010 wrote: »

This is one of the holes identified in the legislation, people living outside the jurisdiction can apply for unemployment payment. So at the moment, you can apply for unemployment payment, how it works when it transfers over to jobseekers in a couple of weeks is a different matter as obviously if you live abroad, you cannot declare that you are available for work here.

Also, to set up a mygovID might be a challenge as you have to confirm your mobile phone number/ID in a LA office.

Thanks. I actually live here full-time. I run the American company online. Which form should I be filling out so? Sorry for all the questions, I think I'll give them a quick call tomorrow as well.

07-04-2020 11:03pm

theglobe wrote: »

Thanks. I actually live here full-time. I run the American company online. Which form should I be filling out so? Sorry for all the questions, I think I'll give them a quick call tomorrow as well.

Start with this:

https://www.gov.ie/en/service/b6ecfd-sign-up-for-mygovid/

Then this:

https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

RCSATELLITES · 07-04-2020 11:05pm

Dav010 wrote: »

I can’t think of a business that would not be down.

https://www.irishtimes.com/business/retail-and-services/march-busiest-month-for-irish-grocery-sales-on-record-1.4221972

Say that again

07-04-2020 11:17pm

RCSATELLITES wrote: »

https://www.irishtimes.com/business/retail-and-services/march-busiest-month-for-irish-grocery-sales-on-record-1.4221972

Say that again

Which of us didn’t do extra shopping at the beginning of the month? My wife was in local Dunne’s this morning, she said it was very quiet. People stockpiled food, now we know there isn’t going to be a shortage, social distancing and using up the stockpiled food mean that surge will drop to normal/lower levels. People will only go now when they have to. But ya, I get your point, we still have to eat so grocery store sales will be about the only exception. As for the online, as reduced wages effect disposable income, online sales will take a hit as well.

Interestingly, the article is a survey of 5000 shoppers and does not include data from the supermarkets which would include any increase in costs of supplying the food on their shelves.

Edit: https://www.google.ie/amp/s/www.rte.ie/amp/1129229/

2Mad2BeMad · 07-04-2020 11:47pm

Just incase people are curious.

I got paid today, I get paid fortnightly.
I was not taxed at all full pay with 70percent subsidy.

Id advise anyone who experience something similar to put any money extra that you get from the tax refund from this to put it in a savings account and don't touch it as revenue will look for it by the end of the year.

I know this is common sense but desperate times for a lot of people and it will be easy to forget you owe it come the new year. Last thing you need after Xmas is a big bill from revenue

08-04-2020 12:08am

2Mad2BeMad wrote: »

Just incase people are curious.

I got paid today, I get paid fortnightly.
I was not taxed at all full pay with 70percent subsidy.

Id advise anyone who experience something similar to put any money extra that you get from the tax refund from this to put it in a savings account and don't touch it as revenue will look for it by the end of the year.

I know this is common sense but desperate times for a lot of people and it will be easy to forget you owe it come the new year. Last thing you need after Xmas is a big bill from revenue

There is no income tax nor USC on the subsidy.. If your employer topped up to full wage, you didn’t pay tax because you are in credit with Revenue, this will balance out in the coming weeks, you will be paying tax only on the top up amount, not the subsidy.

PaybackPayroll · 08-04-2020 12:20am

Dav010 wrote: »

There is no income tax nor USC on the subsidy.. If your employer topped up to full wage, you didn’t pay tax because you are in credit with Revenue, this will balance out in the coming weeks, you will be paying tax only on the top up amount, not the subsidy.

Please look at section 3.11 of version 5 of the FAQ:
https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

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.

(Please note that these FAQs change very frequently, so what is correct today, may not apply tomorrow)

Just Saying · 08-04-2020 12:28am

DUBACC wrote: »

One anomaly coming up for a few of my clients (accountant in practice).

A few clients are on a quarterly PAYE payment, and as a result their Q1 payment is not due until later this month. For various reasons, their February submission was late - reason they all gave was sure the payment isnt due until late April! Whatever the ins & outs of late submissions, the complete exclusion from the scheme is a pretty harsh penalty. Revenue have said they are unable to look at this on a case by case basis as the legislation around it is very restrictive.

Was wondering what would happen if that were the case.I do my own...I was late in Jan but thankfully on time in Feb!!

08-04-2020 12:31am

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.

Seve OB · 08-04-2020 12:35am

ilovespudss wrote: »

One question. As you've explained above, if the employer tops up by more than the allowed top up amount, the subsidy is tapered. In the case where subsudy+top up+tax refund results in a net pay greater than the employees average net pay, is the subsidy tapered then? Will payroll need to reduce the top up amount to allow for the tax refund, so as not to exceed the employees average net pay?

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

theglobe wrote: »

Thanks. I actually live here full-time. I run the American company online. Which form should I be filling out so? Sorry for all the questions, I think I'll give them a quick call tomorrow as well.

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?

2Mad2BeMad wrote: »

Just incase people are curious.

I got paid today, I get paid fortnightly.
I was not taxed at all full pay with 70percent subsidy.

Id advise anyone who experience something similar to put any money extra that you get from the tax refund from this to put it in a savings account and don't touch it as revenue will look for it by the end of the year.

I know this is common sense but desperate times for a lot of people and it will be easy to forget you owe it come the new year. Last thing you need after Xmas is a big bill from revenue

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)

Dav010 wrote: »

There is no income tax nor USC on the subsidy.. If your employer topped up to full wage, you didn’t pay tax because you are in credit with Revenue, this will balance out in the coming weeks, you will be paying tax only on the top up amount, not the subsidy.

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

theglobe · 08-04-2020 12:36am

Dav010 wrote: »

Start with this:

https://www.gov.ie/en/service/b6ecfd-sign-up-for-mygovid/

Then this:

https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

Thanks so much.

PaybackPayroll · 08-04-2020 12:37am

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 · 08-04-2020 12:38am

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.

you have the right page, but thats just a summary. click the top link on the right hand side to get the full details.

3.11

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.

PaybackPayroll · 08-04-2020 12:41am

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

Seve OB · 08-04-2020 12:48am

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.

ZeroCool17 · 08-04-2020 12:51am

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?

Seve OB · 08-04-2020 12:53am

PaybackPayroll wrote: »

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

yes. i was surprised to find out that some auditors & payroll operators thought that this was a change to the system. i read it straight away that you cannot top up more than the ANWP without there being a reduction in the subsidy. All I see here is the same thing that has happened with every update to that document...... things just being spelt out a bit more to make it a but clearer.

that said, ive only read up to version 4 so will have to look at the lastest update tomorrow

Seve OB · 08-04-2020 1:01am

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 · 08-04-2020 1:35am

Seve OB wrote: »

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!!!!

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.

highgiant1985 · 08-04-2020 2:17am

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 · 08-04-2020 2:24am

Seve OB wrote: »

yes. i was surprised to find out that some auditors & payroll operators thought that this was a change to the system. i read it straight away that you cannot top up more than the ANWP without there being a reduction in the subsidy. All I see here is the same thing that has happened with every update to that document...... things just being spelt out a bit more to make it a but clearer.

that said, ive only read up to version 4 so will have to look at the lastest update tomorrow

From direct experience some auditors were giving wrong advise to Employers on how the scheme should operate and I wouldn't be surprised if they messaged these updates as a change to the system rather than having to admit they gave wrong advise in the first place.

Wage Subsidy Scheme Issues

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