Wage Subsidy Scheme Issues

collsoft

Thats absolutely correct, you are absolutely fine to use the subsidy scheme in this way

jammiedodgers wrote: »

I have several part timers returning to work next week who will be working far more hours than their average from Jan/Feb. Am I ok to claim the subsidy once the amount has been tapered correctly?

Collsoft, using the calculator on your website if I have an employee whose AWNP was €100, I top up by €300, I then reduce the subsidy by €35 (€85 down to €50).

collsoft

Hi Snowgal,

Yes, that is one of the reasons why they did it.

By switching employees to Week 1 they no longer get tax refunds - but they still may pay zero tax (or very little) - but it stops refunds.

It was pointed out to Revenue by the payroll software developers at the beginning of the scheme that it would be better to switch people to week 1 much earlier to lower the tax liability at the end of the year.

but at the time when the shutdown was beginning Revenue were keen to ensure that employees had as much money in their pocket as possible and tax refunds were are part of that - and I can understand the thinking behind that.

I think the main reason that it is happening now is because we should hopefully see larger numbers of employees coming off PUP and back into work.

These employees would start getting very large tax refunds if Revenue did not switch them to Week 1, and remember, these employees will have to pay PAYE on all the PUP payments at the end of the year too.

snowgal wrote: »

Hi there, was this done to help employees so that they owe less tax at the end of the year? I’ve had a few queries from colleagues

shoes43

my boss has put me on the Wage Subsidy Scheme. I have not been laid off work and have been in every day since the pandemic started in March. he decided towards the end of March to change the office hours from 9-5 to 10-4. I have been receiving my full wages since and then this month I am down just under €90.00 and when I asked about this he said it was to do with Revenue's treatment of my tax due to the wage subsidy scheme. I have had to ask him to send me on my payslip also so i can see what the difference is this month to previous months. (he is not working in the office).

has this happened to anyone else -I did not ask to go on the wage scheme it was his choice as the employer to do it. I have turned up for work and if he kept the office hours at 9-5 I would have come in for those hours.

Thanks

Kitty19

I have two part time jobs.
All my tax credits are allocated to one, I am on wage subsidy on both.
I know that will end up wit tax bill but how will that be collected without tax credits, will it be spread out over time or in one lump sum.
My income is reduced because the subsidy is paid on the net income ( job with no tax credits),
I am working the same hours as before.

collsoft

Hi Kitty19,

You are correct, there will be a tax bill arising from the wage subsidy that you are receiving at both your employments.

At the end of the year Revenue will combine all of your earnings across all your employments, including any wage subsidy payments that you have received.

After the 15th January 2021 they will produce a "Statement Of Liability" (it used to be called a P21 in previous years) which will calculate your PAYE (tax) and USC liability for everything including the wage subsidy.

If you owe tax at the end of the year then Revenue will offer to collect that tax back from you in 2021 (and perhaps 2022) by reducing your tax credits.

This will spread out the tax bill throughout the year.

I am not sure at this stage if they will make you pay it all in 2021, or if they will let you spread it over 2021 and 2022

Kitty19 wrote: »

I have two part time jobs.
All my tax credits are allocated to one, I am on wage subsidy on both.
I know that will end up wit tax bill but how will that be collected without tax credits, will it be spread out over time or in one lump sum.
My income is reduced because the subsidy is paid on the net income ( job with no tax credits),
I am working the same hours as before.

collsoft

Hi Shoes43,

What your employer has told you is correct.

Revenue updated the tax calculation method for 830,000 employees about a week ago to put them on a "Week 1" taxation basis.

This will mean that you will not get any more tax refunds, so it will reduce your net take home pay.

You may still be paying zero tax, or you might be paying some tax.

Your employer is required to calculate your tax based on the instruction issued by Revenue.

shoes43 wrote: »

my boss has put me on the Wage Subsidy Scheme. I have not been laid off work and have been in every day since the pandemic started in March. he decided towards the end of March to change the office hours from 9-5 to 10-4. I have been receiving my full wages since and then this month I am down just under €90.00 and when I asked about this he said it was to do with Revenue's treatment of my tax due to the wage subsidy scheme. I have had to ask him to send me on my payslip also so i can see what the difference is this month to previous months. (he is not working in the office).

has this happened to anyone else -I did not ask to go on the wage scheme it was his choice as the employer to do it. I have turned up for work and if he kept the office hours at 9-5 I would have come in for those hours.

Thanks

wolfie1968

.

shoes43

collsoft wrote: »

Hi Shoes43,

What your employer has told you is correct.

Revenue updated the tax calculation method for 830,000 employees about a week ago to put them on a "Week 1" taxation basis.

This will mean that you will not get any more tax refunds, so it will reduce your net take home pay.

You may still be paying zero tax, or you might be paying some tax.

Your employer is required to calculate your tax based on the instruction issued by Revenue.

Thanks for the reply. On Friday afternoon he came into the office and caught me off guard and just said I might be down €70 this month and then started to talk about something else so he didn't give me time to process it and pay day is the 28th of the month so I noticed this morning it was down €84 and I no wage slip sent to me so I had to e-mail him for it. I know there are people who are getting the payment and employers are not topping it up so I guess I have been lucky that he is and it is only down a small bit for the moment - it might all change when the scheme runs out.

ChesterFisher1

collsoft wrote: »

Hi Shoes43,

What your employer has told you is correct.

Revenue updated the tax calculation method for 830,000 employees about a week ago to put them on a "Week 1" taxation basis.

This will mean that you will not get any more tax refunds, so it will reduce your net take home pay.

You may still be paying zero tax, or you might be paying some tax.

Your employer is required to calculate your tax based on the instruction issued by Revenue.

The same has happened to me - my PAYE & USC were -300 roughly in the past 2 months & on the payslip today they were 0.00
But I get paid monthly, so if this change only came about last week, is this correct?

Pistachio19

ChesterFisher1 wrote: »

The same has happened to me - my PAYE & USC were -300 roughly in the past 2 months & on the payslip today they were 0.00
But I get paid monthly, so if this change only came about last week, is this correct?

Your employer may have put you on a week 1 basis since getting the new guidelines or they may have done their payroll run since the new RPNs were issued last week. I had asked here if I should amend my payroll run as I'd already done it when the new guidelines were issued. It was suggested to leave it be. Overall it won't matter as the way I understand it, my employees will end up paying more tax at year end but your tax is now balancing out so as not to have a bigger tax bill at year end. I could be wrong - @collsoft will be better placed to explain.

collsoft

Indeed you are correct this change only occurred in the last week just before your monthly wages were processed.

You mentioned that in the last two months your PAYE & USC was showing around -300 per month which indicates that you were receiving a tax/usc refund of about €300 per month.

This refund would have been increasing your net pay for the last two months.

Now with the change from Revenue you are no longer receiving the refund and you are back to paying zero tax this month.

The result is that your net take home pay was €300 lower this month.

You can contact Revenue by logging into your Revenue MyAccount and logging a new "My Enquiries" ticket asking Revenue to put you back onto a "Cumulative Taxation Basis".

This will mean that you will get tax refunds in your next payslip (including what you lost in June, but there is a downside.

The downside is that you will have a larger tax bill at the end of the year arising from the wage subsidy.

It is a difficult decision for anybody to have to make, and you will have to decide what is best for you and your family at this moment.

Best regards

Jason

ChesterFisher1 wrote: »

The same has happened to me - my PAYE & USC were -300 roughly in the past 2 months & on the payslip today they were 0.00
But I get paid monthly, so if this change only came about last week, is this correct?

MildThing84

Hi all,

An employee on 12 euro per hour, normal gross pay at €468 per week, has been brought back on the WSS scheme at 80% with weekly gross pay reduced to €374 per week.

The refund received was just shy of €60, anybody any ideas as to why?

collsoft

What was the ARNWP for this employee in Jan/Feb?

MildThing84 wrote: »

Hi all,

An employee on 12 euro per hour, normal gross pay at €468 per week, has been brought back on the WSS scheme at 80% with weekly gross pay reduced to €374 per week.

The refund received was just shy of €60, anybody any ideas as to why?

Infoseeker1975

@collsoft - My wife is being removed from the wage subsidy scheme this week. She was on it for circa 12 weeks.

I reviewed her wage slip each week & to me, the accountant processing the payroll was doing it incorrectly.

She was not put onto a week 1 basis so in the first few weeks [ARNWP was €475], she received €350 from scheme and the €125 was from her tax refund with the employer paying one cent. This changed as the amount of her tax refund reduced to the employer paying more.

Her agreement with the employer was that she would be topped up. I know you cannot exceed the ARNWP so it would be €125 per week from the employer as gross pay to be taxed.

Am I correct in assuming this was handled wrongly as Revenue's guidance specified that an employee's tax refund cannot be used in making up their pay?

If it was handled wrongly, is it difficult to rectify, i.e. should I tell the accountant that for the 12 weeks she was on the scheme, her gross pay should have been €125 per week = €1,500. Therefore if her gross pay was say 10k before she went on the scheme then it should be 11,500 on finishing the scheme.

capefear

The revenue checks are starting tomorrow with an email been sent to all emoloyers in the morning with a 5 day turnaround on getting the information back to revenue.

ilovespudss

capefear wrote: »

The revenue checks are starting tomorrow with an email been sent to all emoloyers in the morning with a 5 day turnaround on getting the information back to revenue.

Had communication from Revenue on this today, just looking for authorisation.

Do you know what is being asked for? Woman I spoke to mentioned sample wage slips

PickYourName

Infoseeker1975 wrote: »

I reviewed her wage slip each week & to me, the accountant processing the payroll was doing it incorrectly.

There's a very comprehensive description of the scheme in the following document:

https://revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-twss.pdf

lomb

I was late putting payroll in on a small business so unfortunately I missed the Apr 1 deadline. I wasnt too worried at the time as the employees were on the pandemic payment and I thought Id be closed anyway during the scheme length. Im reopening now.
So now It looks like I cannot get those employees on the scheme, am I screwed now and will have to pay out?
Turnover has dropped 25+% I see the scheme has been extended to August so Im loosing out now.
Im not too worried short term but if theres multiple shutdowns over the next 3 years which is what it looks like to me will I just tell the employees to go back on the pandemic payment?

snowgal

capefear wrote: »

The revenue checks are starting tomorrow with an email been sent to all emoloyers in the morning with a 5 day turnaround on getting the information back to revenue.

We got this early last week, and returned it on Friday

Noel-z

Hi there,

I am currently on the Covid Wage Subsidy with my Employer. My Employer is topping up my salary so my Net hasn't changed. However my payslips are only showing the wage subsidy with no top up. We are in the process of going to loan offer on a mortgage and need to present payslips to show that we are still earning same as before Covid. Obviously mine are incorrect and not reflecting that. Accountant says it's the only way he can do the payslips.
Does this sound right? Any help appreciated

un5byh7sqpd2x0

AIB, EBS and New Haven certainly won’t.

Noel-z

Thanks Dogg. Mortgage is with BOI but more querying the accountant issue of the payslip inaccuracy
I was looking at revenue site and sage site too and I think he may have worked the payslips incorrectly.

Processing employees in your payroll
Enter the following details for eligible employees when running their payroll:

Set employee's PRSI Class to J9.

If you haven't already set this in their employee record, you can edit the PRSI class within the pay run by clicking the employee name.
Enter the wage subsidy amount as non-taxable amount.

For eligible employees, the maximum weekly wage subsidy amount payable as calculated by Revenue is available in the CSV file you downloaded .

Be careful not to include the Temporary Wage Subsidy payment in Gross Pay. If the subsidy figure is included in the gross pay, it will be treated as Additional Gross Pay. Revenue will apply tapering and the employer refund amount will be reduced accordingly.
If you aren't making any additional gross payments to your employee, you must include a pay amount of €0.01 in Gross Pay. This is to trigger a payroll submission request.

If you are making an additional gross payment to your employee, include this amount in the Gross Pay. The value of the Gross Pay in conjunction with the maximum weekly wage subsidy determines the amount of subsidy that is payable

A Sample Calculator to help calculate the wage subsidy is available on the Revenue website.

Beasty

Threads merged

jammiedodgers

Any top up pay should have been put into Gross Pay.

Seve OB

Noel-z wrote: »

Hi there,

I am currently on the Covid Wage Subsidy with my Employer. My Employer is topping up my salary so my Net hasn't changed. However my payslips are only showing the wage subsidy with no top up. We are in the process of going to loan offer on a mortgage and need to present payslips to show that we are still earning same as before Covid. Obviously mine are incorrect and not reflecting that. Accountant says it's the only way he can do the payslips.
Does this sound right? Any help appreciated

Not much of an accountant

Pistachio19

Noel-z wrote: »

Hi there,

I am currently on the Covid Wage Subsidy with my Employer. My Employer is topping up my salary so my Net hasn't changed. However my payslips are only showing the wage subsidy with no top up. We are in the process of going to loan offer on a mortgage and need to present payslips to show that we are still earning same as before Covid. Obviously mine are incorrect and not reflecting that. Accountant says it's the only way he can do the payslips.
Does this sound right? Any help appreciated

The top up amount can of course be shown on the payslip.

shatners bassoon

Very helpful thread, thanks to all who have posted.

Am I correct in saying that employee's wages cannot be topped up beyond the average net pay and that if they are, no subsidy is payable? Our staff are paid hourly and all of them would exceed their average net pay this month so we are essentially going to be asking them to take a pay cut.

Are there any other employers in the same boat / anecdotal evidence of how employers are dealing with situations like this? I'm thinking maybe promising them an additional payment once the scheme ends.

shelladoo

Depends on what their average net pay is. there are different rules on top ups for average wage <=586 and those greater than that. Revenue has a calculator which shows you the extent of tapering for topups on your subsidy

Heres Johnny

shatners bassoon wrote: »

Very helpful thread, thanks to all who have posted.

Am I correct in saying that employee's wages cannot be topped up beyond the average net pay and that if they are, no subsidy is payable? Our staff are paid hourly and all of them would exceed their average net pay this month so we are essentially going to be asking them to take a pay cut.

Are there any other employers in the same boat / anecdotal evidence of how employers are dealing with situations like this? I'm thinking maybe promising them an additional payment once the scheme ends.

We are in somewhat of a similar position. Lads that did overtime in Jan and fen have a higher average net pay than their basic wage so there is scope to pay them basic plus overtime now and still stay under allowable levels. For lads that didn't do any overtime in January and February, we can't pay them overtime now.

Can't start paying people more now than they earned before and still claim subsidy, leaves it too open to fraud.

You can pay them what you want but for every euro you go over arnwp the subsidy is reduced by same amount.

shatners bassoon

Thanks for the replies

I had originally thought I could top up to whatever gross pay was required but that if the top-up was in excess of the ANWP then tapering would apply and the subsidy would be reduced by the amount we went over. I wouldn't have a problem with this.

Revenue advised today however that the ANWP is the 'red line' and that if we pay them over that then no subsidy is payable at all. They said the tapering occurs 'within the parameters of the ANWP'.