COVID-19 Wage subsidy & leave payments 💵💰
What you need to know.....
The wage subsidy is paid to the employer to assist in keeping their employees in employment for as long as possible.
It is a one-time subsidy and you can only apply once. When you apply for the wage subsidy there are five key things you are agreeing to:
- You are a New Zealand registered business operating in NZ.
- You have taken active steps to mitigate the financial impact of the COVID-19 outbreak on your business.
- Your revenue has or is likely to drop by at least 30% of the subsidy period and it is related to the COVID-19 outbreak.
- You will make best efforts to retain your employees and pay them a minimum of 80% of their normal income for the subsidised period.
- You will repay any amount to which you are not entitled.
You will receive the subsidy in a lump sum. The subsidy is not subject to GST and is not classed as income (non taxable).
When you pay staff, you will pay them through your payroll as normal with PAYE deducted.
You should keep a record of each weeks pay for each employee and how much of the subsidy you are applying to it.
(i.e. Total gross – less subsidy applied = value of wage that will be a direct cost to your business).
The value of the subsidy applied will not be deductible for income tax purposes. It’s to support your business if you are impacted by COVID-19 and face laying off staff or reducing their hours because of COVID-19. The purpose of this subsidy is to keep as many people employed as possible over the next 12 weeks.
You will need to work out a plan on how you can best do this and for how many employees you can do it for and you will have to name each employee you make a claim for.
The leave payment is available for staff who are sick with COVID-19 or are looking after a dependent person sick with COVID-19.
This payment is made for 14 days and can be applied for more than once but is only available for 8 weeks from 17th March 2020.
It is a gross payment subsidy you must pay it in full to your employee through your payroll system with PAYE deducted.
It is important that staff keep you informed over the coming months if they become eligible for this, as it is a separate payment to the wage subsidy and can be applied for every 14 days while the staff member or dependent person is recovering. The payment is not subject to GST.
Please note: As an employer you need to have a NZ Business Number, Companies will automatically have one and you can find it by searching on their website: NZ Business Number.
Sole-traders, Partnerships and Trusts are not automatically allocated one so you may have to apply if you have not already done so in the past (below are the application links). If you need to apply you will need copies of your identification documentation, make sure you check what is required before you start.
If you have any questions please give us a call on Ph: 03 578 3386 or email us at: firstname.lastname@example.org, we are to support you in any way that we can.
Our office is now officially closed for the lock-down period, all staff are now working remotely so you will be able to get in touch by email and you can phone in to leave us a message.
Wage Subsidy Links
Below are some helpful links: