Wage Subsidy Scheme Issues

Heres Johnny · 08-04-2020 10:40pm

Seve OB wrote: »

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.

Staff on full hours will still be paid fully. Staff on no hours will still get 75% of pay which is the least we plan on paying anybody. Those on part time will be paid somewhere in between, nobody is getting a pay cut based on hours paid at all.

Seve OB · 08-04-2020 11:11pm

Heres Johnny wrote: »

Staff on full hours will still be paid fully. Staff on no hours will still get 75% of pay which is the least we plan on paying anybody. Those on part time will be paid somewhere in between, nobody is getting a pay cut based on hours paid at all.

Fair enough I thought it seemed like you were claiming the subsidy for the guys still on full time

Seve OB · 08-04-2020 11:13pm

kennethsmyth wrote: »

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

Sorry but I don’t see where anything I said was incorrect.

noodler · 08-04-2020 11:18pm

I've a family member going on this scheme (reduced hours).

I've told them to keep 25% of the 410 for the taxman.

Heres Johnny · 08-04-2020 11:23pm

Seve OB wrote: »

Fair enough I thought it seemed like you were claiming the subsidy for the guys still on full time

I am claiming subsidy for people still on full time. And topping them up to 100%.
Nothing wrong with that is there? Sales revenue will be down about 60-70% at an estimate.

Seve OB · 08-04-2020 11:55pm

Heres Johnny wrote: »

I am claiming subsidy for people still on full time. And topping them up to 100%.
Nothing wrong with that is there? Sales revenue will be down about 60-70% at an estimate.

you'd need to spell it out a bit more
when you say that you are topping it up to 100%, what do you mean, is it 100% of their average net? if thats all it is, and unless the employee doesn't pay a penny in tax, then it will actually mean a pay cut to them.
if you top up to 100% of their normal gross, then the subsidy will be cut.

bigboss1986 · 09-04-2020 12:30am

Seve OB wrote: »

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

Thanks.Just closed my claim online on welfare.ie site.

Im still confused about my payslip.My average net is 565 and my payslip says:
Covid19 +343,Tax refund -47 and USC refund -18,Wages 0.01c(1 cent).
Should I be getting more?

Seve OB · 09-04-2020 12:40am

bigboss1986 wrote: »

Thanks.Just closed my claim online on welfare.ie site.

Im still confused about my payslip.My average net is 565 and my payslip says:
Covid19 +343,Tax refund -47 and USC refund -18,Wages 0.01c(1 cent).
Should I be getting more?

Yes. 70% of 565 is 395.5.
So unless you are not calculating the average net correctly, the 343 is to low.

Average net = gross less tax & PRSI. If you have any other deductions they don’t count. It’s possible your employer calculated your avg net wrong

booooonzo · 09-04-2020 1:30am

Our company of 80 has said 20% cuts across the board for all over 30k and they will be availing of the scheme.
All working from home and never busier tbh.
We have to sign a form to agree to pay cuts until October.
I don't believe they don't have funds to pay us as we were apparently doing very well the last year or 2

Does it seem like a correct application of the scheme
Will we be liable to tax at year end or is that person basis
Should we be looking to do 4 day week with the 20% cuts
Is one of the criteria for the scheme the employer must not lay anyone off?

Thanks

mickdw · 09-04-2020 1:34am

booooonzo wrote: »

Our company of 80 has said 20% cuts across the board for all over 30k and they will be availing of the scheme.
All working from home and never busier tbh.
We have to sign a form to agree to pay cuts until October.
I don't believe they don't have funds to pay us as we were apparently doing very well the last year or 2

Does it seem like a correct application of the scheme
Will we be liable to tax at year end or is that person basis
Should we be looking to do 4 day week with the 20% cuts
Is one of the criteria for the scheme the employer must not lay anyone off?

Thanks

Thats a disgrace regardless of whether the scheme allows it or not. All as busy as ever and company only wants to pay 10 percent of wages

Seve OB · 09-04-2020 2:04am

booooonzo wrote: »

Our company of 80 has said 20% cuts across the board for all over 30k and they will be availing of the scheme.
All working from home and never busier tbh.
We have to sign a form to agree to pay cuts until October.
I don't believe they don't have funds to pay us as we were apparently doing very well the last year or 2

Does it seem like a correct application of the scheme
Will we be liable to tax at year end or is that person basis
Should we be looking to do 4 day week with the 20% cuts
Is one of the criteria for the scheme the employer must not lay anyone off?

Thanks

personally i wouldn't sign anything
i would question them and ask why are they going on the scheme and tell them that you don't believe they should be as it is meant for companies who are struggling and should be implemented to keep staff on the books rather than sending them to the live register. it is for reduced hours, not keeping somebody working full time.

but fact they have been doing well and if they have millions in the bank, none of that matters, it is how they are performing now that counts.

sales would have to be down at least 25% and they need to prove it or they will be in trouble for claiming the subsidy.
if sales are down, then they shouldn't need all the staff to remain full time

mickdw wrote: »

Thats a disgrace regardless of whether the scheme allows it or not. All as busy as ever and company only wants to pay 10 percent of wages

na. if you take them literally a 20% of lets say 50k is 10k. so ee is down to 40k.
max the subsidy will be is 18k so they would still be paying nearly 50% of the wages
i any case the subsidy would then reduce because they can't actually claim that much on the scheme so they will pay a higher percentage

i actually don't think these companies know what they are doing at all.

booooonzo · 09-04-2020 9:15am

The performing poorly thing they could probably "prove" as for Q2 a lot of our income will more than likely be delayed until Q3/4
I see on revenue you can also prove decline by showing you had to do paycuts.
This is what p*sses me off the most and seems like the are basically trying to profit or at least not dig in to any cash that they have.

Why do you say 18k? I seen above that if any of the employees get the 410 subsidy, which some of our lower paid employees would, then all employees would get the 410? any truth in that?

blackwhite · 09-04-2020 9:42am

Seve OB wrote: »

personally i wouldn't sign anything
i would question them and ask why are they going on the scheme and tell them that you don't believe they should be as it is meant for companies who are struggling and should be implemented to keep staff on the books rather than sending them to the live register. it is for reduced hours, not keeping somebody working full time.

but fact they have been doing well and if they have millions in the bank, none of that matters, it is how they are performing now that counts.

sales would have to be down at least 25% and they need to prove it or they will be in trouble for claiming the subsidy.
if sales are down, then they shouldn't need all the staff to remain full time

na. if you take them literally a 20% of lets say 50k is 10k. so ee is down to 40k.
max the subsidy will be is 18k so they would still be paying nearly 50% of the wages
i any case the subsidy would then reduce because they can't actually claim that much on the scheme so they will pay a higher percentage

i actually don't think these companies know what they are doing at all.

That part is not accurate - and Revenue have confirmed this in discussions with all of the large professional firms, and indeed in the guidance document:

Eligible employers can participate in the scheme in respect of any eligible employees on their payroll, including those on fulltime, reduced hours, rehired staff who were temporarily laid off, or staff temporarily laid off but retained on the payroll.

The scheme is equally open to companies who have everyone remaining working full time, but Revenue have an expectation that those companies should be making effort to top up pay to as close to normal average as possible.

There's plenty of valid reasons why a business will need to keep 100% of their staff on full hours, despite turnover or order levels having dropped by 25% or more.

09-04-2020 10:04am

Seve OB wrote: »

personally i wouldn't sign anything
i would question them and ask why are they going on the scheme and tell them that you don't believe they should be as it is meant for companies who are struggling and should be implemented to keep staff on the books rather than sending them to the live register. it is for reduced hours, not keeping somebody working full time.

i actually don't think these companies know what they are doing at all.

And you were doing so well.

As the poster above stated, this scheme is open to any business whose income have dropped by 25%. The scheme is precisely to help companies retain staff, that posters company is doing nothing untoward by availing of the subsidy.

A company doesn’t have to be “struggling”, theIt business has to be effected by Covid 19 by 25%.

Advising someone to accuse their employer of lying and defrauding Revenue isn’t the smartest, there is nothing to stop the company laying off that poster.

bigboss1986 · 09-04-2020 10:40am

Seve OB wrote: »

Yes. 70% of 565 is 395.5.
So unless you are not calculating the average net correctly, the 343 is to low.

Average net = gross less tax & PRSI. If you have any other deductions they don’t count. It’s possible your employer calculated your avg net wrong

You were right.My average net is 490.Sent email to my employer about top up amd she said I will get to top if it needs to be.Not sure why I did get 1c this week

tucker1971 · 09-04-2020 10:53am

I do payroll for an employer who will always pay his staff an agreed net wage irrespective of their credits, ie, he takes the hit for the tax.

So example one, he has an employee on €400 net, gets a subsidy of €280, gets tax back of €62, and makes up the balance of €58, so the employee still comes out with their weekly net pay. My question is should he have to pay that tax back of €58 as extra, so that the employees new net will now be €458, bearing in mind that the employer has always paid the tax?

Secondly I noted that the subsidy amount can be manually reduced in order to reconcile the wage?

Can anyone help with this?

gb19815 · 09-04-2020 10:59am

Hi can anyone confirm in relation to taxes repaying ? I received about 100 back in paye and paid about 800 this year , does this mean it will repay at that rate for next few weeks ?

Tow · 09-04-2020 11:21am

bigboss1986 wrote: »

You were right.My average net is 490.Sent email to my employer about top up amd she said I will get to top if it needs to be.Not sure why I did get 1c this week

The one cent is to trigger Submission to ROS from the Payroll, if just the Subsidy is being paid. It is not required by all payroll software, but is in Revenues instructions to reduce confusion.

09-04-2020 11:21am

tucker1971 wrote: »

I do payroll for an employer who will always pay his staff an agreed net wage irrespective of their credits, ie, he takes the hit for the tax.

So example one, he has an employee on €400 net, gets a subsidy of €280, gets tax back of €62, and makes up the balance of €58, so the employee still comes out with their weekly net pay. My question is should he have to pay that tax back of €58 as extra, so that the employees new net will now be €458, bearing in mind that the employer has always paid the tax?

Secondly I noted that the subsidy amount can be manually reduced in order to reconcile the wage?

Can anyone help with this?

Interesting way of paying staff, what does your employer do if an employee transferred tax credits to spouse?

michellie · 09-04-2020 11:25am

Work are paying us the 70% I only work 3 days a week, I got a payment of €504 yesterday (fortnight wage) plus tax back of €126. But I'm assuming now the €504 is the basic Covid 70% pay I will be getting and from next fortnight I won't have any more tax back.

I would be better off I was claiming the government €350per week at least then it would be the same as my regular wages. Is there no way I can do this or am I stuck with my 70%?

Stratvs · 09-04-2020 11:30am

gb19815 wrote: »

Hi can anyone confirm in relation to taxes repaying ? I received about 100 back in paye and paid about 800 this year , does this mean it will repay at that rate for next few weeks ?

You may receive refund of PAYE & USC for some weeks as your current taxable gross is small in relation to what it was before. However the non-taxed subsidy is taxable ( just not through payroll ) and reviews will be done later to reconcile what was paid and what should have been paid. Revenue have said in their FAQ to the scheme ( See 3.11 at linke below) that they will deal with that over time in manageable amounts. The aim right now is to give people money in their pocket when they need it.

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

tucker1971 · 09-04-2020 11:38am

Dav010 wrote: »

Interesting way of paying staff, what does your employer do if an employee transferred tax credits to spouse?

He gets screwed sometimes but generally gets the employee to divide the credits between spouses.

Radharc na Sleibhte · 09-04-2020 11:39am

Hi,
Doing the wages for my small business including my son on payroll. We are topping up the full 30%. Should I click the box to disallow paye refunds? Both my staff and I will only end up paying it back won’t we and they’re all getting they’re full wage as is? I’m not sure?

Stratvs · 09-04-2020 11:43am

Radharc na Sleibhte wrote: »

Hi,
Doing the wages for my small business including my son on payroll. We are topping up the full 30%. Should I click the box to disallow paye refunds? Both my staff and I will only end up paying it back won’t we and they’re all getting they’re full wage as is? I’m not sure?

I have been told that you should not mess with the RPN currently in force. Apart from anything else it may cause issues between the payroll and ROS when filing.

I know it makes more sense to do what you suggest and new RPNs on W1 basis might be a better idea to avoid underpayments later. But from webinars I've had they've all said give the refund. It's also in the FAQ (currently V5.0) at 4.1.

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

Stratvs · 09-04-2020 11:46am

tucker1971 wrote: »

I do payroll for an employer who will always pay his staff an agreed net wage irrespective of their credits, ie, he takes the hit for the tax.

So example one, he has an employee on €400 net, gets a subsidy of €280, gets tax back of €62, and makes up the balance of €58, so the employee still comes out with their weekly net pay. My question is should he have to pay that tax back of €58 as extra, so that the employees new net will now be €458, bearing in mind that the employer has always paid the tax?

Secondly I noted that the subsidy amount can be manually reduced in order to reconcile the wage?

Can anyone help with this?

The EE is supposed to get any PAYE/USC refund due to them.

See 4.12 in the FAQ
https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

Where an employee is due a refund of Income Tax or USC based on the payroll being processed, this should be paid
by the employer and Revenue will refund this to the employer along with the associated wage subsidy.
This refund of Income tax and USC is made to the employee, in addition to the subsidy payment and any additional
payment, and should not be included in the employer’s calculation of the allowable additional payment.

PS perhaps this is a good time to get the ER away from paying on a net basis. It causes so much trouble.

09-04-2020 11:52am

tucker1971 wrote: »

He gets screwed sometimes but generally gets the employee to divide the credits between spouses.

So he doesn’t pay net amount in all circumstances?

Given that a tax hike is inevitable, it would be extraordinary for an employer to guarantee a net figure.

Stratvs · 09-04-2020 12:06pm

Dav010 wrote: »

So he doesn’t pay net amount in all circumstances?

Given that a tax hike is inevitable, it would be extraordinary for an employer to guarantee a net figure.

Paying net is crazy. However was very common. Less so now I believe as the commencement of PMOD from 01/01/19 was opportunity to clean a lot of that up. However all it takes is a couple to TX most Crs and cut-off to other spouse and you've a big problem.

Seve OB · 09-04-2020 1:08pm

Dav010 wrote: »

And you were doing so well.

As the poster above stated, this scheme is open to any business whose income have dropped by 25%. The scheme is precisely to help companies retain staff, that posters company is doing nothing untoward by availing of the subsidy.

A company doesn’t have to be “struggling”, theIt business has to be effected by Covid 19 by 25%.

Advising someone to accuse their employer of lying and defrauding Revenue isn’t the smartest, there is nothing to stop the company laying off that poster.

Fair call. It was late!
I don’t think I was advising anyone though to accuse their employer of lying and defrauding though. I was more saying the employee should discuss with their employer. And if an employer makes a false declaration they can find themselves in a sticky situation.

In the spirit of the scheme though, it should not be abused to get subsidies and keep staff on full hours. As above in bold, this is what I was trying to say.

I’ll show so examples later on of what I mean about pay cuts.

I’ll need to remedy myself so that I can ask some questions....... and I have a couple on the back burner!

09-04-2020 2:36pm

Seve OB wrote: »

Fair call. It was late!
I don’t think I was advising anyone though to accuse their employer of lying and defrauding though. I was more saying the employee should discuss with their employer. And if an employer makes a false declaration they can find themselves in a sticky situation.

In the spirit of the scheme though, it should not be abused to get subsidies and keep staff on full hours. As above in bold, this is what I was trying to say.

I’ll show so examples later on of what I mean about pay cuts.

I’ll need to remedy myself so that I can ask some questions....... and I have a couple on the back burner!

The subsidy is precisely for what the posters employer is using it for, to keep people in employment even though business is down by 25%. I could see your point if the employer is keeping the employee on full hours, and not topping up, but topping up while on full hours is how the subsidy is supposed to work. Any business which suffered an overnight reduction of +25% would be looking at cutting costs, the quickest way of doing that is to cut labour costs by laying staff off.

I really don’t get why you think it is against the “spirit of the scheme” for employers to avail of this if they can show Revenue a 25% drop in income.

Why do you think a false declaration is being made in this case? On the balance of probability, the weight is heavily on that drop being genuine given current circumstances. And why would you think an employee would be entitled to a response from an employer about proof of income drop?

lord quackinton · 09-04-2020 2:45pm

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

09-04-2020 2:58pm

lord quackinton wrote: »

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

Proven in time, are you not noticing a drop over the past month? It would be better to apply for subsidy now and repay Revenue if the drop does not reach the threshold, rather than waiting until the drop is confirmed in the coming months, and not having availed of the subsidy.

Why would he/she have an issue with name being published by Revenue? It’s likely the majority of businesses will be effected and there is no shame in being one of them. And the messy business will apply to all businesses, that is what accountants are for.

You could be paid for, and kept in employment for longer if your employer applies for the subsidy, rather than waiting until they can no longer pay and then laying you off. It just makes no business sense to work this way.

blackwhite · 09-04-2020 3:03pm

lord quackinton wrote: »

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

On 2 - Revenue have confirmed in discussions with a number of professional and representative bodies that they will treat the 25% decline on a good faith basis.

If you can demonstrate your decision process and show that there was a reasonable belief that the 25% threshold would be met then you won't be penalised if trading turns out to be better than the 25% - unless you continue to participate in the scheme after it becomes apparent that the company is unlikely to qualify.

CrabRevolution · 09-04-2020 3:07pm

michellie wrote: »

Work are paying us the 70% I only work 3 days a week, I got a payment of €504 yesterday (fortnight wage) plus tax back of €126. But I'm assuming now the €504 is the basic Covid 70% pay I will be getting and from next fortnight I won't have any more tax back.

I would be better off I was claiming the government €350per week at least then it would be the same as my regular wages. Is there no way I can do this or am I stuck with my 70%?

I'm taking it that your average weekly gross before this was €395, assuming €252 is 70% of your normal net, which would give a gross of €395ish, depending on your tax credits etc.

At €395 a week you'd have been liable for PAYE of (€79-Tax Credits) so I'll guess roughly €15.50. You'd have been up for USC of €4.46 a week too.

If you worked 12 weeks paying roughly €20 a week in PAYE & USC then you'll be due a refund of €240 in total. So you'll get a smaller refund next time and from then on just get the €504 fortnightly.

This is my first foray into tax questions, so any more knowledgeable folk feel free to tear my answer to shreds!

booooonzo · 09-04-2020 3:45pm

Seve OB wrote: »

Fair call. It was late!
I don’t think I was advising anyone though to accuse their employer of lying and defrauding though. I was more saying the employee should discuss with their employer. And if an employer makes a false declaration they can find themselves in a sticky situation.

In the spirit of the scheme though, it should not be abused to get subsidies and keep staff on full hours. As above in bold, this is what I was trying to say.

I’ll show so examples later on of what I mean about pay cuts.

I’ll need to remedy myself so that I can ask some questions....... and I have a couple on the back burner!

would be interested to hear these.

Doing my own research and it seems if the company can show proof (email) of substantial wage cuts that also qualifies them instead of proof of the 25% reduction in revenue.

I believe that is why we have gotten the 20% cut while reaming on full hours

They are preparing for the worst long term (possibly good business?) but i'm not 100% its correct use of this scheme.

Our business wouldn't really see a 25% Q2 reduction i dont believe due to the way our work is but i can't be sure....

lord quackinton · 09-04-2020 4:09pm

blackwhite wrote: »

On 2 - Revenue have confirmed in discussions with a number of professional and representative bodies that they will treat the 25% decline on a good faith basis.

If you can demonstrate your decision process and show that there was a reasonable belief that the 25% threshold would be met then you won't be penalised if trading turns out to be better than the 25% - unless you continue to participate in the scheme after it becomes apparent that the company is unlikely to qualify.

I am a member of a professional body
Revenue have issued guidelines that are open to debate
They are leaving themselves options to go hunting and to claim as much back as they can from the employees and employers
The wage income subsidy is set up by revenue to ensure this
It’s a bad scheme

It’s make more sense for a good employer to let employees to claim the 350 and then top it up themselves

09-04-2020 4:23pm

lord quackinton wrote: »

I am a member of a professional body

It’s make more sense for a good employer to let employees to claim the 350 and then top it up themselves

But to claim the €350 unemployment benefit, you have to have been made unemployed, it converts over to JSA soon, how could an employer make an employee unemployed, then top it up?

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

lord quackinton · 09-04-2020 4:43pm

Dav010 wrote: »

But to claim the €350 unemployment benefit, you have to have been made unemployed, it converts over to JSA soon, how could an employer make an employee unemployed, then top it up?

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

Both schemes are short term wage subsidy and emergency payment so time limit means nothing

What an employer could do is pay lump sum “holidays and overtime accrued to an employee

Good employers work with their employees

blackwhite · 09-04-2020 4:45pm

lord quackinton wrote: »

I am a member of a professional body
Revenue have issued guidelines that are open to debate
They are leaving themselves options to go hunting and to claim as much back as they can from the employees and employers
The wage income subsidy is set up by revenue to ensure this
It’s a bad scheme

It’s make more sense for a good employer to let employees to claim the 350 and then top it up themselves

I've been briefed on the direct discussions Revenue have had with IBEC, with CAI and with one of the big 4 - all briefings by people who were in the direct discussions with Revenue. The only intention of "hunting" is instances where there's willful abuse of the system.

Revenue have stated that for any "honest mistake" cases where subsidy was claimed inappropriately without mal-intent, they'll agree repayment without penalty - leaving employers no worse off than if they hadn't implemented the scheme.

On your final point - it's not possible for an employer to "top up" if the employee is claiming the €350 directly themselves. The €350 direct to employees is only for cases where people have been made unemployed as a result of the current circumstances. Topping-up in those circumstances would remove the entitlement for an employee to claim €350

No "good employer" is going to encourage welfare fraud

booooonzo · 09-04-2020 5:08pm

blackwhite wrote: »

I've been briefed on the direct discussions Revenue have had with IBEC, with CAI and with one of the big 4 - all briefings by people who were in the direct discussions with Revenue. The only intention of "hunting" is instances where there's willful abuse of the system.

Revenue have stated that for any "honest mistake" cases where subsidy was claimed inappropriately without mal-intent, they'll agree repayment without penalty - leaving employers no worse off than if they hadn't implemented the scheme.

On your final point - it's not possible for an employer to "top up" if the employee is claiming the €350 directly themselves. The €350 direct to employees is only for cases where people have been made unemployed as a result of the current circumstances. Topping-up in those circumstances would remove the entitlement for an employee to claim €350

No "good employer" is going to encourage welfare fraud

What constitutes mal intent?
we are taking pay cuts due to 'potential downturn' and availing of the scheme

gb19815 · 09-04-2020 5:28pm

Stratvs wrote: »

You may receive refund of PAYE & USC for some weeks as your current taxable gross is small in relation to what it was before. However the non-taxed subsidy is taxable ( just not through payroll ) and reviews will be done later to reconcile what was paid and what should have been paid. Revenue have said in their FAQ to the scheme ( See 3.11 at linke below) that they will deal with that over time in manageable amounts. The aim right now is to give people money in their pocket when they need it.

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

Thanks

Heres Johnny · 09-04-2020 5:35pm

Can anyone tell me if its possible to pay staff 100% of their net wages using this subsidy without causing either of the below...

A) causing a tax liability for them? Which in effect is a wage reduction when the dust settles

Or

reducing amount of subsidy repayable to the company

noodler · 09-04-2020 5:39pm

Heres Johnny wrote: »

Can anyone tell me if its possible to pay staff 100% of their net wages using this subsidy without causing either of the below...

A) causing a tax liability for them? Which in effect is a wage reduction when the dust settles

Or

reducing amount of subsidy repayable to the company

Instead of giving them their 410 (gross) you could do the tax for them and give them whatever the net is (prob about 300).

If you give them the other 30% though? Would paying 30%^410 (gross) and giving the net of this reduce the amount of subsidy?

blackwhite · 09-04-2020 6:04pm

booooonzo wrote: »

What constitutes mal intent?
we are taking pay cuts due to 'potential downturn' and availing of the scheme

Nothing defined, but that's a general standing principle in any Revenue audit or compliance check, so anyone running a business in a position of fiscal responsibility should be familiar with the general principles that Revenue apply for it.

blackwhite · 09-04-2020 6:07pm

Heres Johnny wrote: »

Can anyone tell me if its possible to pay staff 100% of their net wages using this subsidy without causing either of the below...

A) causing a tax liability for them? Which in effect is a wage reduction when the dust settles

Or

reducing amount of subsidy repayable to the company

The only way we've been able to think of is to possibly make up the tax shortfall at the end of the year with non-taxable One4All vouchers or similar.

I'd imagine anything that seen to be a way of "topping up" shortfalls arising from the scheme would be at risk as being considered a way to circumvent the rules

blackwhite · 09-04-2020 6:09pm

noodler wrote: »

Instead of giving them their 410 (gross) you could do the tax for them and give them whatever the net is (prob about 300).

If you give them the other 30% though? Would paying 30%^410 (gross) and giving the net of this reduce the amount of subsidy?

Revenue guidance has been very clear that you cannot deduct Income Tax or USC from the Govt subsidy. If the subsidy is claimed then it must be passed in full to employees except in very rare circumstances (i.e. where an employee wants to continue making certain non tax-related payments via payroll).

witchgirl26 · 09-04-2020 6:17pm

lord quackinton wrote: »

My employer looked at this and refused to sign up for three reasons
1. Name is published by revenue
2. A drop in 25% in revenue is something they believe that must be proven in time , revenue are playing the nice guy but in time will review every application
3. The employees Will be reviewed by revenue at year end. This will be very messy

We will be paid as long as we can and then go on the 350 payment or stamps

1. What's the problem with this? It'll literally be on their website somewhere. I honestly don't understand why this is freaking people out. Hey look our company is published on Revenue's website for signing up to a scheme to help pay employees.

2. Course they will review. They state that in the guidelines. However they also state that if you don't have the 25% drop in actuality but can show through calculations etc that you reasonably expected that fall off, that they will not pursue.

3. Yes it might get a bit awkward. However it means that employees are getting a bit more now rather than trying to survive on much less.

Look it's not ideal & there are holes in it but having spent the past week going through it with a fine tooth comb, it's not the worst scheme in the world. There's flaws in all schemes out there. I've also been involved in the one in the UK but it's messy too, just in different ways.

gb19815 · 09-04-2020 6:20pm

I was wondering would it be possible to receive the cova payment and apply some holiday payment also ? Ie cova payment and 1 day holiday pay ?

collsoft · 09-04-2020 6:36pm

gb19815 wrote: »

I was wondering would it be possible to receive the cova payment and apply some holiday payment also ? Ie cova payment and 1 day holiday pay ?

It should be ok - but it depends on your figures.

Each employee has a unique subsidy and allowable top-up that depends on the average net pay in Jan/Feb.

Assuming that the 1 day of holidays is less than the maximum employer top-up then you should be ok.

We have a calculator on our website www.collsoft.ie that will tell you the amount of subsidy available and the maximum amount by which you can top up.

Just enter your Average Net Pay into the calculator.

If you are not sure about your average net pay, then get you last payslip in February and take the cumulative figures for Gross Pay - PAYE - USC - PRSI and then divide by the number of Insurable weeks - it should be close enough

noodler · 09-04-2020 6:39pm

blackwhite wrote: »

Revenue guidance has been very clear that you cannot deduct Income Tax or USC from the Govt subsidy. If the subsidy is claimed then it must be passed in full to employees except in very rare circumstances (i.e. where an employee wants to continue making certain non tax-related payments via payroll).

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

Seve OB · 09-04-2020 6:42pm

noodler wrote: »

Pretty sure it says the employer does.not have to deduct.

Not that they cannot.

wrong.
it clearly states the subsidy must be paid in full to the employee

Wage Subsidy Scheme Issues

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