CAVEAT at 25 March 2020
The below detail is subject to legislation which may change or clarify some operational details and will include severe penalties for any false returns or claims.
What is the scheme.
This is a 12 week scheme from 26 March 2020 whereby Employers, who are affected by the COVID-19 pandemic, retain their employees on their payroll and make best efforts to maintain a significant or 100% income for the employees during the period of the scheme.
Qualifying employers can reclaim up to €410 per week per employee from the Revenue having paid the employee either that amount or that amount plus a top up payment.
From April the scheme will provide for a 70% subsidy of average take home pay up to a maximum subsidy of €410 per week
The scheme will be operated by the Revenue Commissioners.
Which employers qualify
It applies to Employers who
- Are experiencing significant negative economic disruption because of the COVID -19 pandemic
- Can show to the satisfaction of the Revenue a decline of at least 25% in turnover
- Be unable to pay normal wages and normal outgoings fully and
- Retain their employees on their payroll
What employees qualify
The scheme is confined to employees who were on the employer’s payroll at 29 February 2020 and for whom a payroll submission has been made to the Revenue in the period from the 1st February 2020 to 15th March 2020.
This would include all employees, full time, part time and Directors who are on the payroll.
How does it work
Employers, if not already registered with the Revenue for the purposes of the COVID-19 Refund Scheme must register with the Revenue by following these steps
- Log on to ROS My Enquires and select the category COVID-19 Temporary Wage Subsidy
- Read the COVID-19 Temporary Wage Subsidy Self Declaration and press the Submit button
- Ensure the business’s bank account details are correct on the ROS record and enter the bank account for the refund
What does the Employer do having registered?
The Employer does the following with his payroll;
- Reset the PRSI class on the payroll to J9
- Pay wages as normal or to the extent possible, but no greater than normal take home pay
- Enter a non-taxable sum in respect of the Subsidy of the lesser of normal take home pay or €410
(from April this will be limited to the lesser of 70% of net take home pay or €410)
- Enter the additional taxable Top Up in pay to normal net take home pay.
- If no additional Top Up is being paid by the Employer, then enter gross pay as €0.01
- Income Tax, PRSI and USC do not apply to the €410 subsidy
- Employee PRSI will not apply to the Subsidy or the Top Up payment
- Employers PRSI on the Top Up payment is reduced from 10.5% to 0.05%
- Payroll submission is made to the Revenue as normal and a refund will be made of the Subsidy paid by the Employer within two working days.
- If the Employee is due any refund of prior Income Tax or USC the Employer includes that in the payment to the Employee and the Revenue will refund the Employer
The names of all Employers who avail of the scheme will be published on the Revenue website after the scheme is terminated.