99 O’Connell Street, Limerick, V94 P8CY | 061 310 656
99 O’Connell Street, Limerick, V94 P8CY | 061 310 656

Temporary COVID-19 Wage Subsidy Scheme

Temporary COVID-19 Wage Subsidy Scheme

This temporary Wage subsidy scheme is available to employers who keep employees on the payroll throughout the COVID-19 pandemic. This scheme replaces the previous COVID-19 Refund Scheme. And will operate from Thursday 26th March 2020. This new scheme allows employers to;

  • Retain links with employees when business will pick up
  • Will reduce the burden on the Department of Employments Affairs and Social Protection who are dealing with other COVID-19 payments

Key Features of operating the subsidy scheme in March 2020

  • Initially, this subsidy scheme will refund employers up to a maximum of €410 per each qualifying employee.
  • Employers should pay no more than the normal weekly net pay of the employee.
  • The scheme applies to employers who top up employee’s wages and those that can’t do so.
  • Employers make this special subsidy payment to their employees through their normal payroll process
  • Employees will be reimbursed for the amounts paid to employees. Note: Employers must process their payroll as outlined below in order to notify Revenue of any subsidy payments. The reimbursement will normally be made withing 2 working days after payroll submission.

Changes to the scheme from no later than 20 April 2020

  • The scheme will move to a subsidy payment based on 70% of the normal net weekly pay for each employee up to a maximum of €410 (exact details to be supplied by Revenue)
  • Income tax and USC will not be applied to the subsidy payment made through the payroll
  • Employee PRSI will not apply to the subsidy payment of any top up payment made by the employer.
  • Employer’s PRSI will not apply to the subsidy payment and will be reduced from 11.05% to 0.5% on a top up payment.

What employers qualify for the scheme?

  • All sectors who are adversely impacted by the COVID-19 pandemic ( excluding the public service and non-commercial semi-state sector)
  • Be able to demonstrate to the satisfaction of Revenue, a minimum of 25% decline in turnover.
  • Be unable to pay normal wages and normal outgoings fully
  • Retain their employees on the payroll (Note: employees must have been on the payroll as at 29th February and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020.

If you qualify for the scheme the following is required

  • Register for the Temporary Wage Subsidy Scheme
    • Submit a myenquiry message under the category “Covid-19 Temporary Wage Subsidy*
    • Read the declaration and press the “Submit” button.
    • Ensure your bank accounts details for the refund of PAYE-PREM are correct.
  • Operating the payroll processing
    • Set PRSI Class to J9
    • Enter the non-taxable amount payable to the employee
      • From now enter in up to €410.
      • After 20th April 2020
        • A max of €410 if the employees average net weekly wage is less or equal to €586
        • A max of €350 per week of the average net weekly wage, if it is greater than €586 and less or equal to €960
        • No subsidy refund can be claimed on employee who have an average net weekly wage of over €960
  • If no top up payment is being made, then include a payable amount of €0.01 in Gross Pay
  • The total net pay of both the temporary wage subsidy and any additional top up pay must not exceed the previous normal pay
  • The payroll submission mush includes pay frequency and period number
  • If the submission generates a refund of tax for the employee, this should be paid to the employee and the employer will get this refund from Revenue.

If you need assistance of have any queries based on any of the above information, please feel free to contact our office and we will be happy to guide you through the process and/or help where required


Kind Regards,