Looking for options if sales collapse due to Coronavirus.

PickYourName · 24-03-2020 9:41pm

jos28 wrote: »

Note that the 70% is 70% of net wages.

Cheers, don't envy the payroll software developers

Indeed. If there's anything but the most trivial of changes - and that one isn't - it won't happen. Not sure what happens in that case: manual reporting of payroll to Revenue?

PickYourName · 24-03-2020 10:44pm

The following is now available:

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

I haven't read it yet, but hopefully will provide some answers.

cfeeneyinterior · 25-03-2020 7:17am

PickYourName wrote: »

The following is now available:

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

I haven't read it yet, but hopefully will provide some answers.

I have read it but I'm unsure. If you were a director of a limited company, does this apply to you? Class S employee.

PickYourName · 25-03-2020 7:50am

cfeeneyinterior wrote: »

I have read it but I'm unsure. If you were a director of a limited company, does this apply to you? Class S employee.

It includes the statement: "The Scheme is confined to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020."

The scheme it replaced made it explicit that it included everyone who met that criteria - including Class S employees and those who normally don't qualify for any social welfare payments (such as non EU/EEA nationals on various visa programs).

I would be amazed if this scheme wasn't the same. I guess a few could be caught out if they didn't have a payroll submission between the relevant dates for whatever reason, though it's not clear how they would otherwise restrict it to current employees.

babybuilder · 26-03-2020 11:14am

PickYourName wrote: »

Just looked now. What can I say? Clear as mud.

Apparently, the refund scheme - which was allowing us to keep our employees on the books even though was they were temporarily laid off and we couldn't pay them - has been replaced by the new wage subsidy scheme.

"This payment replaces the Department's Employer Refund Scheme announced on 15th March, and any business that received refunds under the current scheme do not need to reapply. The Revenue Commissioners will contact them directly to confirm that they meet the conditions for this new scheme. "

The huge question is: does the employer have to pay the 30% not paid by the government? If not, well and good - looks just like the original refund scheme, only better (more income for employees). If they do, though, our only option is to lay off all staff so they can claim the payment themselves. This is exactly what we didn't want to do. Hard enough to get started again if your staff have all gone....

If there's anyone out there who's managed to get an answer from Revenue on this point, can you please let us know?

Attached rev notice to employers

babybuilder · 26-03-2020 11:16am

babybuilder wrote: »

Attached rev notice to employers

"Make best efforts to maintain a significant or 100% income for the period of the subsidy."

MovieFest · 26-03-2020 5:55pm

PickYourName wrote: »

It includes the statement: "The Scheme is confined to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020."

I pay myself yearly, every December, just so that if I'm having a bad year I can reduce the amount of salary I get paid. As a result of this I don't have a payroll submission for January or February. My business has 100% dried up now.
As a result it doesn't look like I can avail of this. What options might be available to me?

PickYourName · 26-03-2020 11:34pm

I've just been reading the details of the new Wage Subsidy Scheme.

My reading of it is that if someone's average net pay is less than €500/week, they would be better off being laid off completely and claiming the Covid-19 Pandemic Unemployment Payment (€350, i.e. 70% of €500) themselves. This is very different from the scheme anounced last week, where the payment received was the same.

If it is the case - and can someone please confirm???? - I've been telling them the wrong thing all week, namely not to apply for the payment themselves.

makeandcreate · 27-03-2020 3:28am

Trying to decide what to do for the best.
The "rules" surrounding this wage subsidy while seeming clear are vague - How is it decided a business has had 25% drop off in business - is that compared to last year, compared to last month, or an aggregate sector figure?
Where it says - businesses that cannot afford to keep paying staff will receive subsidy- how is that quantified? (Can pay 3 weeks).
We cannot pay staff only to be later told we do not qualify for repayment - as harsh as it is, I'd be better off terminating them now and let them claim Welfare.

tina1040 · 27-03-2020 9:50am

jos28 wrote: »

I took to mean that you can put 70% of an employee's through payroll tax free (presumably under Covid payment as per last week) and then top it up to their normal gross ?? Calculating it might be a bit tedious to say the least.

The bit that really confuses me is It will be capped at net €350 for incomes between €38,000 and €76,000.
Does this mean that lower paid workers receive a higher subsidy ??

I'm confused by this too. Net lower that €38000 can get €410 but over €38000 get €350?

Also if employee earns less that €500 net do they get less than €350? I have a part timer earning €300 net and will continue to work a couple of hours per week. Are they better off being laid off?

PickYourName · 27-03-2020 10:52am

tina1040 wrote: »

Also if employee earns less that €500 net do they get less than €350? I have a part timer earning €300 net and will continue to work a couple of hours per week. Are they better off being laid off?

That's exactly the issue I have, multiplied by about 10 people.

It completely defeats the purpose of the scheme. If I retain them, they get paid less; if I let them go, they can't work to help me get restarted.

I've also been tellling all staff not to apply for the new emergency payment as we'll take care of everything. Now, it looks like I'll have to turn round on payday that this was wrong.

I'm trying to get clarification to see if what I think the way it operates is in fact correct.

jos28 · 27-03-2020 2:54pm

I have lost the will to live trying to implement this scheme. The fact that someone with higher earnings gets max €350

I was also under the impression that the 70% of NET only applies from April What about the last March payrun ? Revenue details here are very vague. I was initially under the impression that the subsidy was €410

capefear · 27-03-2020 5:06pm

my understanding of it and I could be wrong is as follows for monthly salaries.

March if you are paid monthly your employees can claim 203 x 4 weeks, no net wage cap so people who earn more than 960 a week can get 203 a week

from the 26 march to the 20 april transitional phase 1 - so you can claim the 70% rates and this includes peole who take home a net weekly wage of 960 or more.

After 20 april transitional phase 2 kicks in and people who earn more then 960 a week net are removed from the scheme.

Can any one confirm if this is correct

tina1040 · 27-03-2020 5:31pm

capefear wrote: »

my understanding of it and I could be wrong is as follows for monthly salaries.

March if you are paid monthly your employees can claim 203 x 4 weeks, no net wage cap so people who earn more than 960 a week can get 203 a week

from the 26 march to the 20 april transitional phase 1 - so you can claim the 70% rates and this includes peole who take home a net weekly wage of 960 or more.

After 20 april transitional phase 2 kicks in and people who earn more then 960 a week net are removed from the scheme.

Can any one confirm if this is correct

I was told by the accountant that there is no subsidy available for those earning over net €960.

I'm still waiting to hear about those earning net less than €500 where the 70% is less that €350.

jos28 · 27-03-2020 7:02pm

Nightmare of a pay run. You can only top up by 30% of total weekly net.
EG Weekly net = €850
Subsidy = €350
30% of €850 = 255.
This means the employee takes home €605 and not €850.
Other employees got tax refunds

Ran it regardless as people had to paid, I'm not submitting it to Revenue until I sort it out.

BTW When I rang Revenue the €203 which I thought we could use for March no longer applies. That scheme has been replaced by the Wage Subsidy scheme. They also told me that meetings are ongoing and it could all change by Monday.

capefear · 27-03-2020 7:53pm

jos28 wrote: »

Nightmare of a pay run. You can only top up by 30% of total weekly net.
EG Weekly net = €850
Subsidy = €350
30% of €850 = 255.
This means the employee takes home €605 and not €850.
Other employees got tax refunds
Ran it regardless as people had to paid, I'd submit it to Revenue until I sort it out.

BTW When I rang Revenue the €203 which I thought we could use for March no longer applies. That scheme has been replaced by the Wage Subsidy scheme. They also told me that meetings are ongoing and it could all change by Monday.

So if an employer wants to pay the same net wage for March how can they do it? Or can it be even done?

PickYourName · 27-03-2020 8:17pm

jos28 wrote: »

They also told me that meetings are ongoing and it could all change by Monday.

I'd say they are!

Let's hope they do change. There are some crazy anomalies there.

I decided to pay top-ups (with cash I don’t have) to make sure nobody’s worse off than if they just left and claimed the €350 payment. Also, a few of the team are getting €350 instead of the €410 others are getting, even though they normally get paid more. Where’s the fairness? Either have them all on a max of €350 or all on a max of €410. I am reluctant to criticise too much, though: it must be bedlam in Revenue trying to get all this up and running.

jos28 · 27-03-2020 9:25pm

capefear wrote: »

So if an employer wants to pay the same net wage for March how can they do it? Or can it be even done?

It certainly could not be done using my payroll software. The limit kicks in no matter how much you try to top up by. Max 30% of net pay and no more

jos28 · 27-03-2020 9:29pm

PickYourName wrote: »

I'd say they are!

Let's hope they do change. There are some crazy anomalies there.

I decided to pay top-ups (with cash I don’t have) to make sure nobody’s worse off than if they just left and claimed the €350 payment. Also, a few of the team are getting €350 instead of the €410 others are getting, even though they normally get paid more. Where’s the fairness? Either have them all on a max of €350 or all on a max of €410. I am reluctant to criticise too much, though: it must be bedlam in Revenue trying to get all this up and running.

Thank God someone else was as confused as me. Obviously there are problems when you roll out something without it being tried and tested. In fairness the emphasis was on getting money to employees and that's a good thing. We were the same today, counting the petty cash to see if we could make it up that way. It's insane which is why I didn't submit it. The tax refund situation was the strangest aspect

SixtaWalthers · 28-03-2020 2:20pm

Too many industries are suffering, it is not only about the hospitality or travel industry. I heard that the US auto industry offered government to make ventilators. I think you should also try to explore more ventures. Even you can go with the same assets and staff into a new venture. Probably, very soon world will fix it.

mogilvie · 28-03-2020 7:08pm

Hi all,
Revenue released Version 2 of their FAQ guide https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf in their Hot Topics section.

The following key clarificatoins were introduced.
- The new version scraps the reference to 30%, and instead allows top-ups to 100% of the Revenue Net Wage value.
- Directors are eligible for the scheme.
- The worked solutions are a bit better.

Note that anomalies do exist.

- A Revenue Net wage of €586 is subsidised by €410. But if you earn 1c more then it drops to €350 flat. Above €960 nothing is subsidised.
- It is also true that those on lower equivalent net wages, or even self employed above the €960 may be better off financially on the €350 COVID Pandemic Unemployment Payment.

The Revenue net wage is the employees Gross less IT/USC/PRSI ee from Jan and Feb submitted pay runs. These are cast in stone via PMOD submissions. There's no fudging these values and no room for negotiation with Revenue. They effectively cap an employees earnings during the scheme.

Note also that the while Subsidy Scheme refund is tax free in the pay run, but the amounts are considered taxable income and will become taxable at year end.
BIK is also suspended for the duration of the scheme, but not forgiven. The BIK will need to be accounted for at year end and taxes paid.

So considerations for the employer are:
1) Do you expect to meet entitlement criteria for the business (25% reduction in turnover etc)
2) Do you want to be on the public list of scheme members?
3) Are your staff actually going to be working during the period. (If so then they cannot go onto the Pandemic Unemployment Payment)
4) Are the Revenue net wage values useful for you, and the capped income acceptable for your staff? For instance someone may have received a bonus in Jan which boosted the Revenue net wage and put them outside of the scheme threshold. Similarly, somone may have had some low earnings weeks which means their rate is artificially low.
5) Does the staff member want to be on the scheme? They might be better off on the pandemic unemployment payment at home, not working.

In both schemes the employee stays on your books as an employee. You do not need to cease their employment.

Hope this helps.

Regards
Mark Ogilvie
Parolla Payroll

capefear · 28-03-2020 7:11pm

Thanks a million Mark that info is a big help

treascon · 28-03-2020 7:16pm

mogilvie wrote: »

Hi all,
Revenue released Version 2 of their FAQ guide https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf in their Hot Topics section.

The following key clarificatoins were introduced.
- The new version scraps the reference to 30%, and instead allows top-ups to 100% of the Revenue Net Wage value.
- Directors are eligible for the scheme.
- The worked solutions are a bit better.

Note that anomalies do exist.

- A Revenue Net wage of €586 is subsidised by €410. But if you earn 1c more then it drops to €350 flat. Above €960 nothing is subsidised.
- It is also true that those on lower equivalent net wages, or even self employed above the €960 may be better off financially on the €350 COVID Pandemic Unemployment Payment.

The Revenue net wage is the employees Gross less IT/USC/PRSI ee from Jan and Feb submitted pay runs. These are cast in stone via PMOD submissions. There's no fudging these values and no room for negotiation with Revenue. They effectively cap an employees earnings during the scheme.

Note also that the while Subsidy Scheme refund is tax free in the pay run, but the amounts are considered taxable income and will become taxable at year end.
BIK is also suspended for the duration of the scheme, but not forgiven. The BIK will need to be accounted for at year end and taxes paid.

So considerations for employer are:
1) Do you expect to meet entilment criteria for the business (25% reduction in turnover etc)
2) Do you want to be on the public list of scheme members?
3) Are your staff actually going to be working during the period. (If so then they cannot go onto the Pandemic Unemployment Payment)
4) Are the Revenue net wage values workable for your staff? For instance someone may have received a bonus in Jan which boosted the Revenue net wage and put them outside of the scheme threshold. Similarly, somone may have had some low earnings weeks which means their rate is artificially low.
5) Does the staff member want to be on the scheme? They might be better off on the pandemic unemployment payment at home, not working.

In both schemes the employee says on your books as an employee. You do not need to crease their employment.

Hope this helps.

Regards
Mark Ogilvie
Parolla Payroll

I have been following this thread. Thank you, this info is very helpful

jos28 · 28-03-2020 7:21pm

Thanks a million for that, very clear analysis. Does that mean we can re-do the payrolls that were run on Friday and avail of the new limits ?

mogilvie · 28-03-2020 7:24pm

jos28 wrote: »

Thanks a million for that, very clear analysis. Does that mean we can re-do the payrolls that were run on Friday and avail of the new limits ?

Forgive me if I stay silent on that one..
Submissions are supposed to accurately reflect the situation at the time that payment was made

jos28 · 28-03-2020 7:36pm

mogilvie wrote: »

Forgive me if I stay silent on that one..
Submissions are supposed to accurately reflect the situation at the time that payment was made

PickYourName · 28-03-2020 10:23pm

mogilvie wrote: »

Forgive me if I stay silent on that one..
Submissions are supposed to accurately reflect the situation at the time that payment was made

There's an explicit statement in the document you referenced that "No, once a submission is made to Revenue with a J9 PRSI class, it cannot be deleted or amended".

Many thanks for posting that, by the way. For anyone who saw the previous version the new one (dated the next day!) has additions highlighted.

Unfortunately, the two biggest issues remain:

1. If you are a higher earner, you get less. This is very hard to understand; it is obviously unfair. Why not have everyone on a cap of €410 or everyone on €350?

2. Many lower-paid will be better off the on the €350 unemployment payment. This is an incentive for companies to lay off workers in preference to keeping them on the payroll, the exact opposite of the reason for the scheme in the first place.

Because this became apparent so late in the day, our decision was to put everyone on the scheme, topping anyone who needed it up to €350 - I’d spent the previous two weeks telling everyone not to apply for the COVID-19 Unemployment payment. As it happened, most (all?) of them got some tax refund, so very few needed any top-up and then only by small amounts. I’m not sure this will happen next week, but it does buy us some time to decide what to do.

If you or indeed anyone has any direct communication from Revenue on this, please post here.

jos28 · 28-03-2020 10:25pm

I couldn't understand the tax refund

mogilvie · 28-03-2020 10:37pm

PickYourName wrote: »

There's an explicit statement in the document you referenced that "No, once a submission is made to Revenue with a J9 PRSI class, it cannot be deleted or amended".

Correct, this is because Revenue will refund employers for any J9 PRSI class submission 2 days after receiving it. They don't yet have a mechanism for submissions that get deleted, or changed, as the money has already been sent.

Although, a non J9 PRSI class submission (ie a normal one, not in the scheme) can be deleted or resubmitted.

PickYourName wrote: »

2. Many lower-paid will be better off the on the €350 unemployment payment. This is an incentive for companies to lay off workers in preference to keeping them on the payroll, the exact opposite of the reason for the scheme in the first place.

Both schemes keep the employees linked to the company, they haven't been made redundant. The Pandemic Unemployment Payment is a temporary layoff. The Employee RPN and EmploymentID are still linked to the company.

DM me if you have any questions.

PickYourName · 28-03-2020 11:03pm

mogilvie wrote: »

Both schemes keep the employees linked to the company, they haven't been made redundant. The Pandemic Unemployment Payment is a temporary layoff. The Employee RPN and EmploymentID are still linked to the company.

Surely there's a fundemental difference: you cannot work (including for your original emplyer) if you are claiming the Pandemic Unemployment Payment?

There's also the statement on the MyWelfare site that: “The Covid-19 Pandemic Unemployment Payment is an emergency payment of €350 per week introduced by the Government for a 12 week period and intended to compensate those workers whose employers cannot retain them on their payroll”

mogilvie · 29-03-2020 12:11am

A lay-off is a temporary thing, where employers do not have enough work for an employee. They are still on the employers books and not made redundant.
https://www.citizensinformation.ie/en/employment/unemployment_and_redundancy/redundancy/lay_off_short_time_working_and_redundancy.html#l50316
In its first iteration, this scheme was a means of DEASP paying employees via the Employer with Revenue refunding the amount. It was called the COVID-19 Employer Refund Scheme. The value was €203 and period for 6 weeks. The Employer Refund Scheme was then upgraded to become the Wage Subsidy Scheme.
However the Pandemic Unemployment Payment is a continuation of the original benefit run by the DEASP. Its value was also increased to €350, and the duration extended to the duration of the pandemic. It is only limited to 12 weeks because that is the duration before which it needs to be considered for renewal by the Minister.

You are correct that there is a difference. If you continue working you are not elegible for the Pandemic Unemployment Payment. But your employer may be eligible for the Wage Subsidy Scheme, and may choose to top that up to your Revenue net wage.

Unfortunatly there is a bit of mixed messaging coming out of DEASP/Revenue/Department of Finance. You can come of the Pandemic Unemployment Payment and return to your job. There is an entire section devoted to it here:
https://www.gov.ie/en/service/a5aed9-how-to-close-a-covid-19-pandemic-unemployment-payment/

PickYourName · 29-03-2020 12:47am

mogilvie wrote: »

A lay-off is a temporary thing, where employers do not have enough work for an employee. They are still on the employers books and not made redundant.
https://www.citizensinformation.ie/en/employment/unemployment_and_redundancy/redundancy/lay_off_short_time_working_and_redundancy.html#l50316
In its first iteration, this scheme was a means of DEASP paying employees via the Employer with Revenue refunding the amount. It was called the COVID-19 Employer Refund Scheme. The value was €203 and period for 6 weeks. The Employer Refund Scheme was then upgraded to become the Wage Subsidy Scheme.
However the Pandemic Unemployment Payment is a continuation of the original benefit run by the DEASP. Its value was also increased to €350, and the duration extended to the duration of the pandemic. It is only limited to 12 weeks because that is the duration before which it needs to be considered for renewal by the Minister.

You are correct that there is a difference. If you continue working you are not elegible for the Pandemic Unemployment Payment. But your employer may be eligible for the Wage Subsidy Scheme, and may choose to top that up to your Revenue net wage.

Unfortunatly there is a bit of mixed messaging coming out of DEASP/Revenue/Department of Finance. You can come of the Pandemic Unemployment Payment and return to your job. There is an entire section devoted to it here:
https://www.gov.ie/en/service/a5aed9-how-to-close-a-covid-19-pandemic-unemployment-payment/

Thanks for that! I'm no expert, just trying to do the right thing here!

I'm slow to criticise Revenue, by the way: it's truly remarkable they've got anything remotely usable up and running in the timescale.

The simple thing to do would be just to lay everyone off and ask them to claim the new payment themselves. The problem with this is that what we were planning, as soon as we’re permitted, was to open in a very restrictive way, gradually bringing in more staff when (not if!) things improve. I can’t do this if they are claiming a benefit that says they are not working. Moving people between the two schemes might be possible, but at a significant administrative overhead and with a risk that some weeks no payment would be forthcoming.

The frustrating thing is that both issues are very easy to fix: I just hope they will be.

mogilvie · 30-03-2020 10:32am

@PickYourName
I've followed up with Revenue on the Pandemic Unemployment Payment this morning and they're on the DEASP line now.
Employees applying for the DEASP COVID-19 Pandemic Unmployment Payment DO need to be ceased in the payroll software.

PickYourName · 30-03-2020 11:54am

mogilvie wrote: »

@PickYourName
I've followed up with Revenue on the Pandemic Unemployment Payment this morning and they're on the DEASP line now.
Employees applying for the DEASP COVID-19 Pandemic Unmployment Payment DO need to be ceased in the payroll software.

OK, thanks, that's useful.

I don't suppose there's any explicit statement on that anywhere? Don't take this the wrong way, but telling Revenue that some person from the Internet suggested I do this lacks a certain something.....

mogilvie · 30-03-2020 12:15pm

Not that I know of.
The person that I asked chair's the current daily teleconferences between Revenue and the Payroll Software Developers Association. They also have input from DEASP and Dept of Finance.

scwazrh · 30-03-2020 1:53pm

the gov.ie website says that if an employee is temporary laid off they can apply for the payment.Does this not mean that the employer keeps the employee on the payroll and issues a zero hour payment payslip but the employee receives the €350 from DEASP?

mogilvie · 30-03-2020 2:00pm

Up until four hours ago, that was my interpretation as well.
However, I've been told by Revenue that to apply DEASP for the COVID-19 Pandemic Unemployment Payment they should be ceased.
If they're not to be ceased then they may be eligible for the COVID-19 Wage Subsidy Scheme via payroll.

PickYourName · 30-03-2020 2:27pm

mogilvie wrote: »

Up until four hours ago, that was my interpretation as well.
However, I've been told by Revenue that to apply DEASP for the COVID-19 Pandemic Unemployment Payment they should be ceased.
If they're not to be ceased then they may be eligible for the COVID-19 Wage Subsidy Scheme via payroll.

I ran our (weekly) payroll last Friday. I had three people in this position: I just marked them as "do not pay" (i.e. as if they were on unpaid leave) and asked them to apply for the COVID-19 Pandemic Unemployment Payment as a matter of urgency (having told them previously not to).

Based on what you've said, this is probably wrong.

My intention now is to wait until the next pay run on Friday before deciding what to do.

I assume this is a reasonable approach?

I would also like to issue a clarifying email to everyone (those on the Wage Subsidy scheme and the 3 mentioned above) to let them know their exact position, but I'm a bit reluctant, having already previously said something that turned out not to be true.

Edit to add: I rang Revenue a while go in the hope of getting some answers, but got a recording to say that due to the latest restrictions, they're not providing phone answers. No response to my ROS query put in last week as yet.

scwazrh · 30-03-2020 6:24pm

mogilvie wrote: »

Up until four hours ago, that was my interpretation as well.
However, I've been told by Revenue that to apply DEASP for the COVID-19 Pandemic Unemployment Payment they should be ceased.
If they're not to be ceased then they may be eligible for the COVID-19 Wage Subsidy Scheme via payroll.

We’ve been in touch with revenue and they have confirmed to us as you explained it . We have to let the staff go so that they can apply for covid 19 unemployment payment or pay them inline with wage subsidy scheme.

PickYourName · 30-03-2020 6:36pm

scwazrh wrote: »

We’ve been in touch with revenue .

Just out of curiosity: how?

scwazrh · 30-03-2020 6:38pm

PickYourName wrote: »

Just out of curiosity: how?

Rang the employers helpline

jos28 · 07-04-2020 6:47pm

I'm still concerned about the tax rebate situation. I'm tempted to put everyone on a week one basis but that would contravene their RPNs. How have others handled this ?

PickYourName · 07-04-2020 7:55pm

jos28 wrote: »

I'm still concerned about the tax rebate situation. I'm tempted to put everyone on a week one basis but that would contravene their RPNs. How have others handled this ?

I just ran the payroll as normal, with gross wage set to €0.01 and an untaxed component of 70% of average wages over the first 9 weeks of the year (capped at €350 or €410 as appropriate).

Pretty much everyone got a tax rebate, which brought their net up. I paid the indicated net amount. So far the refund has exceeded the amount paid (which I understand will be the case until later this month).

I've done this two weeks now: the latest refund arrived today.

Now, whether that was the right thing to do, I don't know, but I think it's certainly defensible if anyone challenges it.

mogilvie · 07-04-2020 8:26pm

jos28 wrote: »

I'm still concerned about the tax rebate situation. I'm tempted to put everyone on a week one basis but that would contravene their RPNs. How have others handled this ?

Don't put people on week1/month1. This has been asked of Revenue directly and it has been confirmed to leave them on the method defined in their RPN.

PickYourName wrote: »

I just ran the payroll as normal, with gross wage set to €0.01 and an untaxed component of 70% of average wages over the first 9 weeks of the year (capped at €350 or €410 as appropriate).

Pretty much everyone got a tax rebate, which brought their net up. I paid the indicated net amount. So far the refund has exceeded the amount paid (which I understand will be the case until later this month).

I've done this two weeks now: the latest refund arrived today.

Now, whether that was the right thing to do, I don't know, but I think it's certainly defensible if anyone challenges it.

Most people on cumulative basis will get a tax refund initially. This is because the employer contribution is the only taxable component of the pay in the payslip. This does bring their take home pay up. This is desired behavior in that it injects more cash into the economy.

The tax will still be due on the earnings at the end of the year. Although depending on the amounts, and timing of the pandemic, revenue may spread that tax bill over a couple of years by modifying an individuals Standard Rate Cut Off Point and Tax Credits.

It's OK for the takehome pay to be higher than the Average Weekly Net Pay if this is due to refunds of USC and Income Tax. Just so long as employer pay and the subsidy combined do not exceed the AWNP. There should be no other benefits or earnings that tip the employee above the AWNP.

Where the employer might slighly overpay their contribution, then Revenue will reduce the value of the subsidy refund. So you want to get this right. If the employer wants to pay more than the AWNP, then the refund will reduce to 0. There are some good examples in the Revenue FAQ document here.

Mark Ogilvie
Parolla

jos28 · 07-04-2020 8:50pm

Thanks a million folks, I was on the right track but the tax refund thing threw me. There'll be fun and games at the end of year :eek:

PickYourName · 07-04-2020 9:53pm

mogilvie wrote: »

Most people on cumulative basis will get a tax refund initially. This is because the employer contribution is the only taxable component of the pay in the payslip. This does bring their take home pay up. This is desired behavior in that it injects more cash into the economy.

I know this is a how long is a piece pf string type of question, but can you give any indication how long the tax refunds are likely to continue? Presumably, because we're still relatively near the start of the year, they will end at some point: is it likely to be before the end of the 12-week length of the scheme?

The tax refunds in several cases take staff to over the €350 amount where below which they'd be better off being laid off.

Many thanks for your post by the way, which was very useful.

mogilvie · 08-04-2020 11:13am

PickYourName wrote: »

I know this is a how long is a piece pf string type of question, but can you give any indication how long the tax refunds are likely to continue? Presumably, because we're still relatively near the start of the year, they will end at some point: is it likely to be before the end of the 12-week length of the scheme?

The tax refunds are just a byproduct of the cumulative tax calculation method. It's not a purposely instructed COVID response measure. It happens by default depending on how much tax the employee has already paid this year, and whether their credits exceed the tax due on their taxable income.

PickYourName wrote: »

The tax refunds in several cases take staff to over the €350 amount where below which they'd be better off being laid off.

The desire of the govt is that staff are retained on the Wage Subsidy Scheme, and that employers contribute with employer payments where possible.
The decision to retain staff on the TWSS should be made in conjunction with the employee, because like you state, some people are better off financially on the Pandemic Unemployment Payment. However, it is important to note that the refunds are the employees money being returned to them from Revenue via the employer. So don't include the IT/USC refund when weighing the financial difference between PUP or TWSS.

PickYourName · 08-04-2020 4:02pm

mogilvie wrote: »

The tax refunds are just a byproduct of the cumulative tax calculation method. It's not a purposely instructed COVID response measure. It happens by default depending on how much tax the employee has already paid this year, and whether their credits exceed the tax due on their taxable income.

I understand that; as you say, it's unrelated to the scheme, and indeed happens all the time in other circumstances.

I was hoping to get some idea of how long it might last, though, short of trying to work it out in detail for an example case. Any ideas?

mogilvie wrote: »

The desire of the govt is that staff are retained on the Wage Subsidy Scheme, and that employers contribute with employer payments where possible.
The decision to retain staff on the TWSS should be made in conjunction with the employee, because like you state, some people are better off financially on the Pandemic Unemployment Payment. However, it is important to note that the refunds are the employees money being returned to them from Revenue via the employer. So don't include the IT/USC refund when weighing the financial difference between PUP or TWSS.

That's a good point about the tax refund being just that - a refund that is payable in both cases. I will look into it and discuss with those affacted.

scwazrh · 08-04-2020 5:51pm

Aside from what’s in place to help the employees is there any assistance available to the business ? Our business has zero sales now but still has insurances , rents , vehicle leases , equip payments to try and cover.

PickYourName · 08-04-2020 10:22pm

scwazrh wrote: »

Aside from what’s in place to help the employees is there any assistance available to the business ? Our business has zero sales now but still has insurances , rents , vehicle leases , equip payments to try and cover.

See: Government supports for COVID-19 impacted businesses

Some of these are new, announced earlier today.

Looking for options if sales collapse due to Coronavirus.

Comments