Wage Subsidy Scheme Issues

Tow

qwabercd wrote: »

Revenue website says if your payroll provider can't do it, then it must be done manually through ROS. There doesn't seem to be an option to do it on ROS though.

It is the same as any other Payroll Submission manually entered through ROS. Just ensure all other monetary fields are set to zero and enter the required values into Income Tax Paid and USC Paid.

I would recommend manually entry via ROS, rather than by amending a previous payroll run via your payroll software.

1. There is a risk of messing up a correct previous entry.
2. The TWSS payments can be easily identified for both Audit proposes and by Employees. Use a simple 'Payroll Run Reference' name such as "TWSS Tax Payment" etc.
3. Easier to enter one at a time when Employees arrive with their SOLs in dribs and drabs.
4. Easier to amend mistakes when Employees/Revenue amend SOLs.
5. If there is a government decision to 'write off' the TWSS tax, the Payroll Submission entries can easily be identified and deleted from ROS.

qwabercd wrote: »

And even before that, is there a way to calculate the twss tax liability without going through each employees' personal balancing statement?

Yes, and I agree the whole process is open to abuse and has GDPR issues.

However, Revenue require employers to use the End of Year Statement and to document and keep records of the process. In the event of an audit doing your own thing may lead to trouble...

Edit:
Just to add. There is no need to enter the payments into ROS. Revenue allow employers to pay the money directly to Employees.

PickYourName

Tow wrote: »

Edit:
Just to add. There is no need to enter the payments into ROS. Revenue allow employers to pay the money directly to Employees.

Is there any published information from Revenue that says this (or indeed any of it) is OK?

I'm not questioning whether you're correct or not, but I somehow doubt "I read it from some (anonymous) bloke on the Internet" would cut much ice during a Revenue audit....

Pistachio19

PickYourName wrote: »

Is there any published information from Revenue that says this (or indeed any of it) is OK?

I'm not questioning whether you're correct or not, but I somehow doubt "I read it from some (anonymous) bloke on the Internet" would cut much ice during a Revenue audit....

https://www.revenue.ie/en/employing-people/twss/employers/index.aspx

It suggests you can provide funds for your employees liability and then they need to pay it themselves.

shatners bassoon

An employee's gross pay has been reduced by their employer by an amount which results in their net pay remaining the same (achieved by using any refund due to them / generally paying less tax due to a lower gross and the subsidy been non-taxable in real time).

In the above scenario, if the employer agrees to pay the resulting tax liability which arises at the end of the year, does this even things out or is there any other detriment to the employee?

Hooked

shatners bassoon wrote: »

An employee's gross pay has been reduced by their employer by an amount which results in their net pay remaining the same (achieved by using any refund due to them / generally paying less tax due to a lower gross and the subsidy been non-taxable in real time).

In the above scenario, if the employer agrees to pay the resulting tax liability which arises at the end of the year, does this even things out or is there any other detriment to the employee?

I literally logged in to ask the same question!

I was paid my NETT wages as a mix of subsidy and top up, so was underpaid in theory (they should've topped up to my GROSS amount and let me put aside the difference).

My salary to the revenue is now 'short' for 2020 and I owe a chunk of tax...

Waiting to hear back from my employer as to what's next.

Will23

Hooked wrote: »

I literally logged in to ask the same question!

I was paid my NETT wages as a mix of subsidy and top up, so was underpaid in theory (they should've topped up to my GROSS amount and let me put aside the difference).

My salary to the revenue is now 'short' for 2020 and I owe a chunk of tax...

Waiting to hear back from my employer as to what's next.

Generally, your agreed / contract salary or wages is a gross figure, if you work out where you stand from a gross pay point of view over the year, you will be able to work out whether there was an overall reduction in salary or not.

If you have agreed to a reduction it should be in writing. If you didn't, that leaves your employer on shakey ground imo, as they have reduced your gross salary without your consent.

Imo the strategy of targeting top ups to match nett pay was doomed to fail from the start as everyone's credits, deductions, etc will differ. That failed strategy is now coming home to roost where liabilities occur!

It's a disaster from both employer and employee of view.

Pistachio19

qwabercd wrote: »

Has any employer experience of paying the twss tax on behalf of the employee?

Revenue website says if your payroll provider can't do it, then it must be done manually through ROS. There doesn't seem to be an option to do it on ROS though.

And even before that, is there a way to calculate the twss tax liability without going through each employees' personal balancing statement? Given people will have personal circumstances that will need to be adjusted for, this could be a nightmare for large companies. Not sure if Revenue have fully thought this through.

I have spoken to our accountant and we can just transfer the amount of the liability to the employees, which is much easier than rejigging Dec submission details. He has said we will need a copy of their balancing statement to keep on file. Needless to say if an employee is jointly assessed and their spouse was on TWSS/PUP, they will need to ascertain what amount is theirs alone.

collsoft

The other one to keep a look out for is any part time employees who have multiple employments. They may or may not have been on TWSS in their other employments so the final liability on the statement would have to be apportioned amongst those multiple employments.

I would strongly urge any employers looking at this now not to rush into any agreements just yet.

First, Revenue may not as yet have the full picture because they are telling us that 94.5% of employers in TWSS have reported to Revenue what was paid to employees.

However, only 81% of employers are actually fully reported. In other words 19% of employers have not finished reporting everything.

So the figures could change for employees.

Employers have until the end of June to make any such payments so I would advise people to take advantage of that time to study things carefully.

Pistachio19 wrote: »

I have spoken to our accountant and we can just transfer the amount of the liability to the employees, which is much easier than rejigging Dec submission details. He has said we will need a copy of their balancing statement to keep on file. Needless to say if an employee is jointly assessed and their spouse was on TWSS/PUP, they will need to ascertain what amount is theirs alone.

stupidskin

Hi, maybe this has been previously mentioned but I cant find it, after my wife received her liability statement of 2700 from revenue after being on the wss for around 5 months I was having a hard time working this out but now I see that her own tax credits were used by her employers to bring her salary close to what it was but after the credits ran out they then had to top up, it just doesn't seem right to me that they could have done this.. Effectively not paying her anything for 3 months but now we must pick up the bill, yes great there was no job loss etc but it seems the company was taking full advantage of the situation, or am I mistaken? .. Again apologies if already covered

Tow

stupidskin wrote: »

Effectively not paying her anything for 3 months but now we must pick up the bill, yes great there was no job loss etc but it seems the company was taking full advantage of the situation, or am I mistaken? .. Again apologies if already covered

No, you are correct. I have seen worse, after weeks of no work the employer started back up. They wanted to pay the original net pay, with all the built up tax credits the employees were coming out with negative Gross Pay. Effectively paying the employer for the pleasure of working.

kennethsmyth

stupidskin wrote: »

Hi, maybe this has been previously mentioned but I cant find it, after my wife received her liability statement of 2700 from revenue after being on the wss for around 5 months I was having a hard time working this out but now I see that her own tax credits were used by her employers to bring her salary close to what it was but after the credits ran out they then had to top up, it just doesn't seem right to me that they could have done this.. Effectively not paying her anything for 3 months but now we must pick up the bill, yes great there was no job loss etc but it seems the company was taking full advantage of the situation, or am I mistaken? .. Again apologies if already covered

Work out how much gross salary was not paid, calculate what she would of paid in tax if normal gross was paid vs how much was paid. Ask employer to pay either the tax or missing gross salary. If refuses go to WRC. More employees should do this and the employers will then understand their responsibilities. Gov messed up on this by doing net on TWSS, they should of made the TWSS non taxable and it would of blown over. For a 2700 tax cost I’d be definitely talking with my employer as they essentially haven’t paid correct salary.

stupidskin

kennethsmyth wrote: »

Work out how much gross salary was not paid, calculate what she would of paid in tax if normal gross was paid vs how much was paid. Ask employer to pay either the tax or missing gross salary. If refuses go to WRC. More employees should do this and the employers will then understand their responsibilities. Gov messed up on this by doing net on TWSS, they should of made the TWSS non taxable and it would of blown over. For a 2700 tax cost I’d be definitely talking with my employer as they essentially haven’t paid correct salary.

You are right, but unfortunately made redundant in the interim so no come back with employer. But I cant understand why more isn't being made of this as I cant imagine this only impacted a few.

kennethsmyth

stupidskin wrote: »

You are right, but unfortunately made redundant in the interim so no come back with employer. But I cant understand why more isn't being made of this as I cant imagine this only impacted a few.

No if employer still exists you can still take a WRC action, and you’ve nothing to lose as now redundant.

kennethsmyth

Tow wrote: »

No, you are correct. I have seen worse, after weeks of no work the employer started back up. They wanted to pay the original net pay, with all the built up tax credits the employees were coming out with negative Gross Pay. Effectively paying the employer for the pleasure of working.

This is why revenue put everyone on a week 1 basis shortly into the TWSS. If your employer decided to claim credits against the files supplied by revenue report them. Revenue did this so employees wouldn’t push back harder at the end of the year against government as there would be a big backlash if tax due was high

Tow

kennethsmyth wrote: »

This is why revenue put everyone on a week 1 basis shortly into the TWSS.

It actually took a long time before the RPNs were changed, I can lookup exactly when if required.

Revenue were warned of the issue with Cumulative tax when/before the scheme started, but an official decision was made to pay employees as much as possible (including tax refunds) in the early days of TWSS. The change to Week 1 for TWSS and PUP recipients was only made when the country started to open up again.

collsoft

Tow is bang on.

Revenue actively wanted employers to give tax refunds to boost employees net pay.

The point was made to Revenue that this could be problematic in the longer run.

They only switched employees over to Week 1 whenever large numbers started to go back to work after being on PUP because they would have got very large tax refunds when they started to be paid again by their employers

Tow wrote: »

It actually took a long time before the RPNs were changed, I can lookup exactly when if required.

Revenue were warned of the issue with Cumulative tax when/before the scheme started, but an official decision was made to pay employees as much as possible (including tax refunds) in the early days of TWSS. The change to Week 1 for TWSS and PUP recipients was only made when the country started to open up again.

jammiedodgers

I think it was mid June they issued the Week 1 RPNs for everyone

Pistachio19

In order for an employer to know how much to give to pay their employees liability, does the employee first need to complete their tax return online and then wait until their new statement of liability is sent to them? This would be after they add medical expenses etc.

qwabercd

Has anyone actually done the manual adjustment through ROS to reflect the payment of the TWSS liability for employees?

Per Revenue guidance it says "Some payroll packages do not provide this facility. It may be necessary to enter the information manually through ROS".

I've gone to ROS "Submit payroll -> submit payroll by online form -> tax year 2020 ". When I choose an employee it shows monthly pay for the average month but doesn't show any tax liability details. It's not clear how to actually input the additional "IT paid" and "USC paid" here? Do you do it through the "pay and deductions" section which currently shows zero? Will this impact previous submission via payroll?

Surprised revenue haven't given guidance on this, given most employers would normally upload via payroll but now have to do manually to reflect a new type of item.

Edit - the gross monthly pay that preloads doesn't even tie back to what the December pay was, due to pay cuts.

collsoft

ROS does this to help employers who file manually all of the time by trying to reduce the number of user inputs required.

You will need to manually override all of those figures to zero.

In particular you need to make sure that all of the following are zero

1) Gross Pay
2) Pay For Income tax
3) Pay For USC
4) Pay for employee PRSI
5) Pay for employer PRSI
6) Remove any PRSI classes and Insurable weeks

In the other panel you need to make sure the following are zero

1) Gross medical Insurance
2) Share Based remuneration
3) taxable benefits
etc etc

The only boxes that should have a figure are in the "Pay and Deductions" panel;

1) Income tax Paid
2) USC Paid
3) RPN Number - leave this to whatever was the default

qwabercd wrote: »

Has anyone actually done the manual adjustment through ROS to reflect the payment of the TWSS liability for employees?

Per Revenue guidance it says "Some payroll packages do not provide this facility. It may be necessary to enter the information manually through ROS".

I've gone to ROS "Submit payroll -> submit payroll by online form -> tax year 2020 ". When I choose an employee it shows monthly pay for the average month but doesn't show any tax liability details. It's not clear how to actually input the additional "IT paid" and "USC paid" here? Do you do it through the "pay and deductions" section which currently shows zero? Will this impact previous submission via payroll?

Surprised revenue haven't given guidance on this, given most employers would normally upload via payroll but now have to do manually to reflect a new type of item.

Edit - the gross monthly pay that preloads doesn't even tie back to what the December pay was, due to pay cuts.

qwabercd

collsoft wrote: »

ROS does this to help employers who file manually all of the time by trying to reduce the number of user inputs required.

You will need to manually override all of those figures to zero.

In particular you need to make sure that all of the following are zero

1) Gross Pay
2) Pay For Income tax
3) Pay For USC
4) Pay for employee PRSI
5) Pay for employer PRSI
6) Remove any PRSI classes and Insurable weeks

In the other panel you need to make sure the following are zero

1) Gross medical Insurance
2) Share Based remuneration
3) taxable benefits
etc etc

The only boxes that should have a figure are in the "Pay and Deductions" panel;

1) Income tax Paid
2) USC Paid
3) RPN Number - leave this to whatever was the default

Great thanks. I've heard that Revenue will be releasing more guidance in the coming weeks. What route are you seeing employers going? It seems the payment to employees and letting them settle the liability is the most common route that I'm hearing.

Tow

collsoft wrote: »

ROS does this to help employers who file manually all of the time by trying to reduce the number of user inputs required.

You will need to manually override all of those figures to zero.

Just to add, ROS will require a Pay Date and as the entry is for the 2020 Tax Year the Pay Date must be in 2020. Unless the Employee already has a Week 53, it is important not to use a Pay Date of the 30/31 December 2020.

collsoft

In truth I dont think Revenue have a real idea just how much interest there is in this subject.

We (Payroll Software Developers) were told that the information that is currently published is the extent of what we can expect - lets see how that goes.

In terms of the question of the employer paying the employee or paying Revenue directly let me say this.

Many people are asking will the government just write off the tax due on TWSS?

Revenue say no - its written into the legislation.

Some people think it might happen if enough pressure is put on the government - I dont think this will happen, but I cant say its not impossible

I didn't pay my water charges either back in the day

But here is the thing.

If you pay your employee's TWSS tax liability by handing the money over to the employee then its gone forever.

If however you pay it to Revenue directly and then the government make a change - well then you can go back and change your payroll submission and get your money back.

Good luck if you have to try and get it back from your employees after the fact.

I would urge employers to keep control of any such payments as much as they can!

qwabercd wrote: »

Great thanks. I've heard that Revenue will be releasing more guidance in the coming weeks. What route are you seeing employers going? It seems the payment to employees and letting them settle the liability is the most common route that I'm hearing.

collsoft

Fair point TOW - I didnt think of that.

Time to update our development plans!!!!!!

Tow wrote: »

Just to add, ROS will require a Pay Date and as the entry is for the 2020 Tax Year the Pay Date must be in 2020. Unless the Employee already has a Week 53, it is important not to use a Pay Date of the 30/31 December 2020.

Seve OB

Seve OB wrote: »

got the statement and it matches the bank receipts. tax comp saying 700 more. so people beware and double check your figures. we are sending an enquiry through my account and will wait and see what they have to say

brianomc wrote: »

Just got mine through now, and just like Seve OB, my covid amount is over by 700.

got a reply at last from revenue on my account
they have adjusted their figures and reduced what they initially had said by the €700

brianomc

Seve OB wrote: »

got a reply at last from revenue on my account
they have adjusted their figures and reduced what they initially had said by the €700

Odd. I got this reply a few days ago. Either way, it will balance out in next years SoL.

I refer to your recent correspondence. Please note the PUP amounts displayed on Preliminary End of Year Statements and Statements of Liability were provided directly by Dept of Social Protection in their End of Year file transfers to Revenue.

These files include two additional payments made by DSP on the week's ending 05/01/2021 and 12/01/2021. DSP have confirmed that, although these payment dates fall into 2021, both payments are proper to 2020.

For both payments made on 05/01/2021 and 12/01/2021 the date of entitlement date is 01/01/2021, which, according to international standards as it fell on a Friday this year, is deemed by DSP to be part of their Week 53 payments and accordingly proper to the 2020 tax year.
I trust this is satisfactory.

collsoft

That is true, that is the way that Revenue and Social Welfare are looking at this.

The bit that annoys me is that all of the rest of us have to go by the date of payment.

If you pay an employee on 12 January 2021 then its a 2021 payment not a 2020 payment - no matter how you dress it up.

Employers are told that it is not when the payment is earned that matters, its when its paid.

But when you write the rules......

brianomc wrote: »

Odd. I got this reply a few days ago. Either way, it will balance out in next years SoL.

I refer to your recent correspondence. Please note the PUP amounts displayed on Preliminary End of Year Statements and Statements of Liability were provided directly by Dept of Social Protection in their End of Year file transfers to Revenue.

These files include two additional payments made by DSP on the week's ending 05/01/2021 and 12/01/2021. DSP have confirmed that, although these payment dates fall into 2021, both payments are proper to 2020.

For both payments made on 05/01/2021 and 12/01/2021 the date of entitlement date is 01/01/2021, which, according to international standards as it fell on a Friday this year, is deemed by DSP to be part of their Week 53 payments and accordingly proper to the 2020 tax year.
I trust this is satisfactory.

Seve OB

collsoft wrote: »

That is true, that is the way that Revenue and Social Welfare are looking at this.

The bit that annoys me is that all of the rest of us have to go by the date of payment.

If you pay an employee on 12 January 2021 then its a 2021 payment not a 2020 payment - no matter how you dress it up.

Employers are told that it is not when the payment is earned that matters, its when its paid.

But when you write the rules......

Yes I agree with Collsoft. Very frustrating that revenue have one set of rules for them and one for everyone else. It makes no sense that these payments are treated any differently to payroll payments or vice versa.

Of course it is even weirder that they then changed the rules for my wife but not for briano

bluescat

Sono Topolino wrote: »

Not too worried about that - Niall Cody said so on the record.

It’s the implications of admitting publicly that you cannot afford to pay your staff their wages that is the issue.

Only believe something once it has been publicly DENIED.
Yes they will come after you.
And after everybody.
Because we're broke.
And WE will have to pay for the damage caused by this "safety" hysteria.

collsoft

Funny Seve_OB I was in a meeting with Revenue today where we briefly touched on why Social Welfare Benefits are taxed on a "When Earned" basis rather than on a "When Paid" basis - and I can see the logic in the approach now.

Basically there are often cases where there might be a dispute between the department and an individual over the amount paid for a particular benefit.

Take for example a Pension. The amount paid may be on some sort of graduated scale depending on the average number of insurable weeks per year over a persons working life.

The individual may dispute this and may have their benefit increased.

This might include a back dated increase going back over a number of previous years.

In order to be fair to the individual the tax calculations are based on the years to which the benefit apply, and if the person has unused tax credits in those years they would soften the blow.

If the tax was calculated on when the benefit was paid then it would all land in the same tax year and would be unfair to the individual.

I can now see the logic behind their thinking!!!!

Seve OB wrote: »

Yes I agree with Collsoft. Very frustrating that revenue have one set of rules for them and one for everyone else. It makes no sense that these payments are treated any differently to payroll payments or vice versa.

Of course it is even weirder that they then changed the rules for my wife but not for briano