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All staff earning up to €960 net of taxes per week on aver age (which usually equates to €76,000 per annum gross) and who have been on your payroll since at least 29th Feb will qualify for a subsidy.

Under the COVID-19 Wage Subsidy Scheme, for employees whose Average Net Weekly Pay is €586 or less (which usually equates to about €38,000 gross per annum) the employer will be entitled to a subsidy of 70% of the employees Average Net Weekly Pay subject to a maximum subsidy of €410 per week.

For employees whose Average Net Weekly Pay is between €586 and €960 per week the maximum subsidy is reduced to €350 per week.

Any employees whose Average Net Weekly Pay is greater than €960 per week will not receive a subsidy.

However, employers should pay no more than the normal take home pay of the employee.  

Example:

Q: I have 2 staff, one on €25,000 per annum and one on €45,000 per annum. What subsidy am I likely to get for each of them per week?

Let’s assume that both employees have the normal standard tax rate bands and tax credits.

The employee on €25k per year should usually have net take home pay of €420 per week. 70% of their usual net weekly take home pay would be €294. As this is less than the maximum subsidy allowed of €410 in this wage bracket then you should receive the full €294 from Revenue.

The employee on €45k per year should usually have net weekly take home pay of €658. 70% of the usual net weekly take home pay would be €461. As this is in excess of the maximum allowed subsidy in this wage bracket of €350 then you will only receive the €350 maximum.

Employers are encouraged to top up these payments to their employees where possible and by as much as possible.

However, the payments to employees should never exceed what they would usually receive as their average net weekly take home pay.

Published 27/03/2020

Date published 27 Mar 2020

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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