From 1st September, the Employment Wage Subsidy Scheme (EWSS) will replace the current Temporary Wage Subsidy Scheme (TWSS) for Irish employers. The change over will bring about a significant impact on many organisations’ inhouse and outsourced payroll service.
As outlined in the Revenue guidelines issued on 14th August and available here, the Employment Wage Subsidy Scheme (EWSS) is currently expected to run until the end of March 2021 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 on our payroll service 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. If your organisation is availing of the TWSS, you should receive confirmation of your tax clearance status from Revenue via your ROS Inbox. If your organisation is considering availing of the Employment Wage Subsidy Scheme, we would encourage you to check your current tax clearance status immediately – if current tax clearance is not held, an application can be made online through the ROS e-Tax clearance service. 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 business must be able to demonstrate that they expect to experience a 30% reduction in turnover or orders between 1st July and 31st December 2020 (looking at the period as a whole and compared with the same July to December period last year). The reduction in turnover must be caused by Covid-19. (NB: CCA 58a registered childcare businesses are included in the scheme with no turnover test required).
Employer registration for the Employment Wage Subsidy Scheme
Employers will need to register. We’re currently expecting registrations to open via Revenue Online Services today (18th August) for our Payroll Service Clients. We are encouraging our Payroll Service Clients to get in touch with the Paycheck Plus team in the usual way if you require our assistance with this registration. We would ask for registration requests for weekly payrolls to be with us no later than Thursday 27th August, and for monthly payrolls no later than Monday 31st August (whilst also drawing your attention to the below employer review as required on 31st August to validate your organisation still meets the eligibility criteria). If you are not currently a Paycheck Plus client you can contact us on email@example.com or via our payroll service enquiries form to find out more about our wide range of outsourced payroll services.
Continued review of employer eligibility
With the exception of July 2020 and the final month of the scheme, 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. In either case, if circumstances change again, an employer can re-register claim the Employment Wage Subsidy Scheme again from that date. Whilst Paycheck Plus expect to be able to facilitate the registration / de-registration on our Payroll Service Clients’ behalf, the continual review of the eligibility criteria remains the responsibility of the employer.
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|
|Less than € 151.50||Nil|
|From € 151.50 to € 202.99||€ 151.50|
|From € 203 to € 1,462||€ 203|
|More than € 1,462||Nil|
Proprietary directors are expected to be able to avail of the scheme in limited circumstances; additional guidance will be provided on this in due course.
July / August “sweepback” payment
In limited circumstances, employers and employees not eligible for the TWSS may be included on the Employment Wage Subsidy Scheme and backdated to 1st July 2020. Whilst this does not extend to employees whose net pay exceeded the TWSS thresholds, it may help new employers, or established employers with seasonal employees and new hires. Revenue expect to make a template available in late August showing the requisite information required for employers to submit by 5th September. Submission of this template will enable Revenue to calculate the total subsidy due to be paid for those employers wishing to avail of the sweepback payment. No additional submissions or amendments will be processed on or after 14th September in respect of July/August.
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.
Paycheck Plus will issue further details on the Employment Wage Subsidy Scheme in the coming days and weeks; meanwhile if you have any immediate queries please don’t hesitate to contact us by emailing firstname.lastname@example.org or via our payroll service enquiries form
Paycheck Plus, Your Payroll Specialist Outsourced Payroll Service
Paycheck Plus is an award-winning payroll service and payroll outsourcing provider, serving businesses across Ireland and the UK. As an experienced payroll bureau, we provide comprehensive, ISO accredited, cost effective payroll outsourcing services and payroll compliance services to organisations of all sizes. Specialising in all aspects of payroll, our team of experts is well-versed in all aspects of payroll outsourcing and payroll processing, from day-to-day tax and NI calculations, auto-enrolment and pension administration, to managing SMP, SSP, student loans and other complex payroll services.