Wage Subsidy Scheme
The Irish Government announced yesterday new measures to provide financial support to Irish businesses affected by the COVID-19 crisis with the introduction of a temporary Covid -19 wage subsidy scheme.
Key Features of the scheme
This replaces the previous COVID-19 Refund Scheme. Initially, and from this Thursday (26 March 2020), the subsidy scheme will refund employers up to a maximum of €410 per week per each qualifying employee however, employers should pay no more than the normal take home pay of the employee
- The subsidy scheme applies to employers who top up employees’ wages and those that aren’t in a position to do so
- Employers make this special support payment to their employees through their normal payroll process
- Employers will then be reimbursed for amounts paid to employees and notified to Revenue via the payroll process
- The reimbursement will, in general, be made within two working days after receipt of the payroll submission
- In April, the scheme will move to a subsidy payment based on 70% of the weekly average take home pay for each employee up to a maximum of €410*
- Income tax and USC will not be applied to the subsidy payment through the payroll
- Employee PRSI will not apply to the subsidy or any top up payment by the employer
- 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.
Operating the scheme from Thursday 26 March 2020
The employer runs the payroll as normal, entering the following details for each relevant employee under the Scheme:
- PRSI Class set to J9
- A non-taxable amount equal to the employee’s net take home pay or €410 whichever is the lesser
- If an employer is not making any payment to the employee, they should include a pay amount of €0.01 in Gross Pay
- If an employer is making additional wage payments to affected employees, they should include this amount in the Gross Pay
- It is important that employers do not include the Temporary Wage Subsidy payment in Gross Pay
- The payroll submission must include pay frequency and period number.
- Penalties will apply to any abuse of the Subsidy Scheme by self-declaring incorrectly, not providing funds to employees or non-adherence to Revenue, and any other relevant, guidelines.
Click here to see more details of the various measures put in place to assist businesses with the COVID 19 crisis including the above.