Welcome News for ROI Employers Adversely Affected by Covid-19
03 April 2020
The Irish Revenue has announced a Temporary Wage Subsidy Scheme for employers whose businesses have been adversely affected by Covid-19.
The Covid-19 Temporary Wage Subsidy Scheme is expected to run for a period of 12 weeks from 26th March 2020, although this timeline may be amended by ministerial order.
Initially, in Phase 1 of the Subsidy Scheme, Revenue will refund employers up to a maximum of €410 per each qualifying employee. An employee must have been included in their employer’s February payroll submissions between 1st February 2020 and 15th March 2020 to be a qualifying employee.
In Phase 2, no later than 20th April 2020, the Scheme will provide for the following subsidies:
- 70% of an employee’s take home pay up to a maximum of €410 net per week for employees whose average net weekly pay is less than or equal to €586;
- a maximum of €350 for employees whose average net weekly pay is greater than €586 and less than or equal to €960; and
- no subsidy in respect of the wages of employees whose average net weekly pay is greater than €960.
The Scheme will be available both to employers who top up employees’ wages and to those who are not in a position to do so.
How do employers register for the scheme?
Employers who have not yet registered, or their agents, wishing to register for the scheme can apply to Revenue by carrying out the following steps:
- log on to ROS ‘myEnquiries’ and select the category ‘Covid-19: Temporary Wage Subsidy’
- read the “Covid-19: Temporary Wage Subsidy Self-Declaration” and press the ‘Submit’ button.
- ensure bank account details on Revenue record are correct. These can be checked in ROS and in ‘Manage bank accounts’, ‘Manage EFT’, enter the refund bank account that the refund is to be made to. These may be different to your RDI bank account details so it is important to check this.
What if I am already registered employer COVID-19 refund scheme?
All employers who have already registered with Revenue for the purposes of the Employer COVID-19 Refund Scheme are not required to do anything further.
The employer may make payroll submissions from 26th March 2020 under the subsidy scheme arrangements on the same basis as they were doing for the Employer Refund Scheme, and €410 will be refunded in respect of each eligible employee per week for Phase 1 of the subsidy scheme. This may change once Phase 2 has been enabled, which is expected to happen no later than the 20th April.
How is the scheme operated through payroll?
The employer runs the payroll as normal, entering the following details for each relevant employee under the Scheme:
- PRSI Class set to J9
- Enter a non-taxable amount up to 70% of the employee’s net weekly take home pay to:
- a maximum of €410 per week where the average net weekly pay is less than or equal to €586, or
- a maximum of €350 per week where the average net weekly pay is greater than €586 and less than or equal to €960.
- 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
- to avail of the wage subsidy, the wage subsidy plus any additional pay must not exceed the average net weekly pay
- the payroll submission must include pay frequency and period number
- Income tax and USC will not be applied to the subsidy payment through the payroll. However, the subsidy will be liable to income tax and USC on review at the year end.
- Employee PRSI will not apply to the subsidy or any top up payment by the employer
- Employer PRSI will not apply to the subsidy and will be reduced from 11.05% to 0.5% on the top up payment
- Please note the subsidy does not apply where the AWN pay is greater than €960.
Click here for more guidance from the Revenue regarding the Covid-19 Temporary Wage Subsidy Scheme.