Guidance for PAYE employees whose employers are availing of Temporary Wage Subsidy Scheme (TWSS)

Overview

On 24 March 2020 the Government announced new measures to provide financial support to workers affected by the Covid-19 crisis. As part of these measures, Revenue is operating a COVID-19 Temporary Wage Subsidy Scheme. The scheme enables eligible employees, whose employers’ business activities have experienced significant negative disruption due to the COVID-19 pandemic, to receive supports directly from their employer. It also ensures that your employer keeps you on its books during the pandemic so that it facilitates the business’ operations in getting back to normal once the crisis eases.

The subsidy scheme is implemented by employers through their payroll system, thereby ensuring you will receive the subsidy payment along with any other payments made by your employer.

You do not have to do anything to benefit from the subsidy scheme. It is a matter for your employer to register for the scheme with Revenue.

Your employer is required by law to separately identify the subsidy element on your payslip as a payment described as 'GovCov19 WageSub'.

Employer Additional Gross Payments

Your employer may make additional payments to you (known as top-up payments) to supplement the subsidy payment being made. The top-up amount is subject to certain limits. In particular, the combination of the subsidy and the top-up payment from your employer cannot exceed 100% of your normal net weekly pay (this is known as the Average Revenue Net Weekly Pay or ARNWP).

Subsidy Rates

The amount of subsidy paid to your employer is based on the ARNWP you received before the pandemic crisis affected your employer’s business. This average is calculated by Revenue using the pay and tax information reported by your employer for the months of January and February 2020.

Using your ANRWP, the following subsidy rates now apply:
If you earned on average (ARNWP)You will receive a subsidy of
Less than or equal to €412 per week 85% of ARNWP to a maximum of €350 per week
More than €412, and up to €500 per week Flat rate of up to €350 per week
More than €500 and up to €586 per week 70% of ARNWP, subject to a maximum of €410 per week
More than €586 and up to €960 per week New tiered arrangement to a maximum of €350 per week
More than €960 per week If your current gross pay is below €960 per week new tiered subsidy arrangements may apply to a maximum of €350 per week

*Tapering or restriction of the subsidy shall apply to all cases, (except those where ARNWP does not exceed €412) where the additional gross pay paid by the employer and reported on their payroll submission, plus the wage subsidy amount, exceeds the employee’s ARNWP.

Tiered arrangements

Where your ARNWP is greater than €586 per week but not more than €960 per week, the temporary wage subsidy shall not exceed €350 per week, and shall be calculated with reference to the gross salary paid by your employer and its effect on your average weekly pay as follows:

  • A subsidy of up to €350 shall be payable where your ARNWP is greater than €586 and where your employer pays sufficient gross salary which equates to an amount up to 60% of your net weekly earnings.
  • A subsidy of up to €205 shall be payable where your ARNWP is greater than €586 and where your employer pays sufficient gross salary which equates to an amount that is more than 60% but not more than 80% of the employee’s net weekly earnings.
  • No subsidy shall be payable to you where your ARNWP is greater than €586 and where your employer pays sufficient gross salary which equates to an amount that is more than 80% of the employee’s net weekly earnings.

The wage subsidy is also available to support you if your ARNWP is more than €960, and your current gross pay is below €960 per week. Where your current gross pay, as reported in the payroll submission, represents:

  • not more than 60% of the ARNWP, a subsidy of up to €350 per week is applicable
  • more than 60% and not more than 80% of the ARNWP, a subsidy of €205 per week is applicable
  • more than 80% of the ARNWP, no subsidy is payable. In these cases, the maximum additional gross payment an employer can make, to receive the full subsidy, is the difference between €960 and your maximum weekly wage subsidy.

Tapering of Subsidy

Tapering (or a reduction) of the subsidy will apply to all cases where the gross pay paid by your employer plus the subsidy amount exceeds the ARNWP. This is calculated by subtracting the gross pay paid by your employer from the ARNWP and ensures that you are not better off under the Scheme than if your normal pay arrangements applied. The single exception to tapering is where your employer wishes to pay you a contribution which when added to the wage subsidy for the employee does not exceed €350 per week. In such cases, tapering of the temporary wage subsidy is not applied.

Guidance

Revenue has published a series of Frequently Asked Questions for Employees (FAQ V5) whose employers are availing of the TWSS.

However, if any further clarification is required, employees can contact Revenue by submitting their query online through MyAccount, MyEnquiries.