As the Covid-19 pandemic continues so to do the changes in Government supports available to businesses. Below we outline information from the July Stimulus package regarding the Employment Wage Subsidy Scheme.
- The Employment Wage Subsidy Scheme (EWSS) was signed into law on the 1st Aug 2020.
- This is a support paid directly to employers and will fully replace the Temporary Wage Subsidy Scheme (TWSS) from the 1st Sept 2020 until 31st March 2021.
- If you are currently on the TWSS you should remain on it until the end of Aug 2020.
- The EWSS can be claimed for employees not on the TWSS for July and Aug 2020.
- For employers who will apply for the EWSS for July and Aug 2020 their payroll should be operated as normal and a “Sweep Back” will be applied by Revenue . The refund of the subsidy and PRSI will take place in mid Sept 2020.
- The EWSS will be paid monthly in arrears in line with the current Revenue payroll cycle. The online statement of account will be issued on the 5th of the following month, amendments/ additions accepted until the 14th and payment made thereafter.
- Employer must be able to demonstrate that the business will experience a 30% reduction in turnover or orders for the period July to December 2020.
- this disruption is caused by Covid 19
This reduction in turnover or orders is relative to:
- the same period in 2019 where the business was in existence prior to 1 July 2019
- the date of commencement to 31 December 2019
- where a business commenced after 1 November 2019, the projected turnover or orders.
- Employers must register on ROS for the scheme (the TWSS registration form does not transfer to the EWSS).
- The registration form will be available on ROS from Mid August 2020.
- Employers must have a Tax Clearance certificate to receive subsidy payments.
- Payroll submissions must be made to Revenue in line with PAYE modernisation rules which state that employers must report payroll details to Revenue each time an employee is paid. Employers must report these details on or before the pay date.
Any submissions received by Revenue after the 14th of the following month will not be refunded the Employment Wage Subsidy Scheme.Revenue Guideance Document
Eligible Employee Restrictions
- Proprietary Directors who do not retain “ordinary” employees are not eligible for EWSS – further guidance to follow from Revenue.
- Connected persons (ie family members) who were not on the payroll during July 2019 to June 2020 are not eligible.
The level of subsidy the employer will receive is per paid employee:
- Employee is paid more than €203 but less than €1462 gross per week the subsidy= €203
- Employee is paid between €151.50 and €202.99 gross per week the subsidy=€151.50
- Employee is paid less than €151.50 or more than €1462 gross per week no subsidy is paid
- The PRSI rate of 0.5% will apply for each eligible employee. The normal
PRSI rate should be applied to the payslips and will be reconciled in the sweep back/ monthly statement of account on ROS.
What to do next
- Create, pay and submit your payrolls to Revenue on or before the dates of payment to employees.
- Make sure your July payroll is submitted before the 14th Aug or you will not be entitled to claim back the EWSS for July in the sweep back which will happen in September.
- Watch out on ROS for correspondence on how to register for the EWSS.
- Have your Revenue account up to date to ensure you have a valid Tax Certificate (you may wish to contact your accountant)
- We will send out further guidance later in the month on how to process the EWSS from Sept 1st once we have received clarity on same from Revenue.
Points to note
- Employers are required to undertake a review on the last day of every month to ensure they continue to meet eligibility criteria.
- In line with international practice a list of employers availing of EWSS will be published in January 2021 and April 2021 on www.revenue.ie
Revenue are still working out how to implement the EWSS and we will keep you posted with any software changes arising.
Previous post on TWSS can be found here.