New Employment Wage Subsidy Scheme – How it effects you and your business.
The team at Solve update us on the Wage Subsidy Scheme - EWSS - Update from Revenue:
The Employment Wage Support Scheme (EWSS) was announced on the 23rd July and revenue has now revealed how this will be implemented.The Temporary Wage Subsidy Scheme (TWSS) will continue to run as previous and will end on the 31st August 2020.
The legislation is expected to be signed into law shortly. Below are key elements of the new scheme as set out by Revenue.
Your business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 and this disruption is caused by COVID-19.
This is compared to the same period in 2019.
If the business commenced since 1 July 2019, then use the date of commencement to 31 December 2019. If the business commenced after 1 November 2019, use the projected turnover or orders.
How often do you need to review?
You should review on the last day of every month to ensure you continue to meet the eligibility criteria. If you no longer qualify, you should de-register from the following day (1st of the month).
When is it effective from?
The new scheme is effective from the 31st July 2020.
This support will be backdated to 1 July for employees of qualifying employers who did not qualify for TWSS.
What sectors does it apply to?
The new scheme will be open to all sectors. New firms operating in impacted sectors will also be eligible.
What employees are included?
The new scheme will operate as a payroll subsidy support scheme, rather than an income replacement measure. The level of subsidy the employer will receive is per paid employee. The following shows the subsidy rates available.
Employee Gross Weekly Wages Subsidy Payable
Less than € 151.50 Nil
From € 151.50 to € 202.99 € 151.50
More than € 203 and less than € 1,462 € 203
More than € 1,462 Nil
What employees are excluded?
Proprietary directors or newly hired connected parties are excluded
What are the benefits to the employer?
Employers will now receive a direct subsidy for each qualifying employee they have on the scheme as set out above.
A 0.5% rate of employers PRSI will continue to apply for employments that are eligible for the subsidy.
What are the benefits to the employee?
Employees will be paid their gross pay as normal and this includes the regular deduction and remittance of income tax, USC and employee PRSI.
What are the next steps?
It is expected that revenue will issue a new PRSI code to cover this payroll type to facilitate the processing of payrolls.
Then the payroll software companies will need to update their software to reflect these and issue these updates to payroll processors.
Once we have the software updates, we can start processing payrolls for our clients who qualify for the new scheme.
Above are some key elements of the scheme as released by revenue and we expect further guidance from revenue on the exact mechanics its operation once the legislation is enacted
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