Covid-19 – Wage Subsidies and Leave Payments
Wage Subsidies
Wage subsidies will be available for businesses that can show a 30 percent decline in revenue for any month between January and June 2020 compared to the year before (or projected revenue for new businesses).
For eligible businesses, employers will be paid $585.50 per week for full-time staff, and $350 for part-time staff. Payments will be capped at $150,000 per business and will be paid in one lump sum for up to 12 weeks.
It’s not clear from the information provided, but it seems that shareholder-employees are also covered by this subsidy.
Application can be made online – see the link below. The process appears to be reasonably straight forward, and information provided on the website is both helpful and reasonably easy to follow. The form filling/information requirements do not appear onerous.
Leave Payments
Leave payments are available to those who need to self-isolate and cannot work, or who are sick or caring for a dependent who is sick with Covid-19.
The leave payment is available to employers, contractors, sole-traders and the self-employed for 8 weeks from 17 March 2020.
The leave payment may be applied for more than once and must be passed on in full.
The leave payment is $585.80 per full-time employee, or $350.00 per part-time employee.
Things to note:
The wage subsidy and leave payments are NOT subject to GST – an Order in Council is being drafted to treat it as exempt (Section 5(6E)(B)(iii GST Act).
The wage subsidy and leave payments are excluded income under section CX 47 of the Income Tax Act 2007.
The payments made to employees ARE taxable and subject to PAYE, KiwiSaver etc in normal way.
For more information on the Wage and Leave Subsidies and to apply on-line go to:
https://www.workandincome.govt.nz/products/a-zbenefits/covid-19-support.html
Below is a link to a helpful flow chart from the Work & Income website.