The Employment Wage Subsidy Scheme – Explained
As outlined in the Revenue guidelines issued on 3rd February 2022 and available here, the Employment Wage Subsidy Scheme (EWSS) will run until the end of April 2022 and eligible employers will receive a flat-rate subsidy for eligible employees and benefit from a reduced rate of employers PRSI on eligible wages. Under the Employment Wage Subsidy Scheme the employer will pay the employee normal wages and following submission of the payroll return (which Paycheck Plus do as part of our payroll service on our client’s behalf), employers will then receive a subsidy from the Revenue in respect of eligible employees. Currently Revenue guidance states that refunds will be made as soon as practicable after the return date.
Employer eligibility criteria for the Employment Wage Subsidy Scheme
To benefit from the Employment Wage Subsidy Scheme, employers must possess & retain a valid tax clearance certificate. It is important to note that businesses with Covid-19 related tax debts which are warehoused, or non-Covid-19 debts which are included in a phased payment arrangement, can obtain tax clearance and, provided all other conditions are met, can participate in the Employment Wage Subsidy Scheme (EWSS). Subsidies will not be paid to businesses without tax clearance.
The Debt Warehousing scheme for those businesses continuing to avail of COVID supports that are already eligible for warehousing has been extended. The end date for taxes for Period 1 is now April 30th 2022. Period 2 will begin on May 1st 2022 and end on April 30th 2023, with Period 3 commencing May 1st 2023.
The business must be able to demonstrate that they expect to experience a 30% reduction in turnover or orders between 1st January and 31st December 2021 for pay dates between 1st July 2021 and 30th April 2022. The reduction in turnover must be caused by Covid-19. The comparison period for the reduction in turnover depends on the commencement date of the business.
Continued review of employer eligibility
Employers are required to undertake a review on the last day of every month to ensure they continue to meet the above eligibility criteria. Employers who no longer meet the criteria must de-register with effect from the following day (1st of the month) and cease claiming the subsidy. If an employer becomes aware prior to the end of the month that they will no longer meet the eligibility criteria, they should de-register immediately and cease claiming the subsidy.
Employers are required to submit a monthly Employer Eligibility Review Form and submit it via Revenue Online Services.
Employee eligibility for Employment Wage Subsidy Scheme
A subsidy can be claimed in respect of employees earning between €151.50 and €1,462 gross per week. Rates of the subsidy are as below; the number of insurable weeks will be used to calculate gross pay for pay periods other than weekly:
|Employee Gross Weekly Wage||Subsidy Payable from 1st March to 30th April||Subsidy Payable from 1st April to 31st May (directly impacted by Dec’21 public health measures)|
|Less than €151.50||€0||€0|
|Between €151.50 and €202.99||€100||€100|
|Between €203 and €299.99||€100||€100|
|Between €300 to €399.99||€100||€100|
|Between €400 to €1,462||€100||€100|
|Greater than €1,462||€0||€0|
Proprietary directors are able to avail of the scheme in limited circumstances;
- The eligibility for EWSS is met
- Proprietary director is on the payroll
- A payment of wages was made between 1st July 2019 and 30th June 2020
The Employment Wage Subsidy Scheme will be administered by Revenue on a self-assessment basis. In due course, Revenue will issue further details on the assurance checks they expect to undertake in the future. Meanwhile it is imperative that employers retain all records relating to the operation of the Employment Wage Subsidy Scheme, specifically including those that support the expectation that turnover or customer orders will reduce by the requisite 30%, together with details of the monthly reviews of the eligibility criteria.
For more on the EWSS read:
Employment Wage Subsidy Scheme (EWSS)
Employment Wage Subsidy Scheme (EWSS) Q&A
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