COVID-19 Wage Subsidies in SmartPayroll
COVID-19 Wage Subsidies in SmartPayroll
We are experiencing a very high volume of calls about the Covid-19 Wage Subsidy Scheme.
Please review the information on this web page first. If you cannot find the information you need here, please email our support team.
We are working through the lock down period, and will come back to you as soon as possible. Our team are currently triaging queries based on the date of your next pay. This ensures we answer the most urgent queries first. Please include your next pay date in the Subject Line of your email. We appreciate your patience during this time.
Our guide for running a pay in SmartPayroll when using the Wage Subsidy Scheme
Frequently Asked Questions
|Who can get the wage subsidy?||To qualify:
|How much can I get?
|The COVID-19 Wage Subsidy will be paid at a flat rate of:
The subsidy is paid as a lump sum and covers 12 weeks per employee. The Government has since removed the original cap of $150,000 per business.
|Is the Wage Subsidy taxable?||Wage subsidies should be passed onto the employee by the employer and processed as part of the employee’s normal wages. All deductions (such as PAYE, KiwiSaver and child support) should be made as normal and can be processed through SmartPayroll. More information found here.|
| What if I have already received the COVID-19 Leave Payment? How should I apply this in SmartPayroll?
|My employee normally receives less than the Wage Subsidy amount each week. Do I have to pay them all of it anyway?|
|What if my employee worked some hours, but not as much as their standard weekly hours?
||Refer to Scenarios 2 and 8 in the Wage Subsidy Guide.|
|Can an employee use their other leave entitlements during the lock down period?||Employers and employees can agree to use any form of paid leave (e.g. annual leave) to cover their period of self-isolation. However, employees aren’t required to have used any or all their paid leave entitlements before they can receive the Wage Subsidy support paid to an Employer.|
|Can I receive the Wage Subsidy for my employees if they’re working from home?||Yes, an employer may still be eligible for the Wage Subsidy if their employees are working from home and they meet the criteria to receive the Wage Subsidy.|
|Am I required to track my employees’ hours if they are working from home?||No. As your employees are still working their normal hours and being paid accordingly, there is no requirement to track this information.|
|Do I have to pass on the Wage Subsidy to my employee?||Yes, you are required to pass on the Wage Subsidy to your employee. And if you can, it is expected that you top this up to 80% of your employee’s standard wages/salary.|
|What if my employees worked some hours, but not as much as their standard weekly hours?
|The employer is required to pay 80% of their employees salary/wages or as near to this as possible when using the Wage Subsidy. If the employee worked less than 80% of their normal hours in a week, then the employer is required to top up the employees salary/wages to 80%. Even if they worked less than 80% of their normal hours, you would still enter the hours in the payroll to represent that 80% amount.|
|I have employees that work variable hours. How do I work out whether they qualify for the full-time or part-time rate?||
If your employee works variable hours, you can use an average to work out what rate to apply for. Use the average hours worked each week
Use the average hours report in SmartPayroll to help you with the above.
If the average hours are:
|Does the employee continue to accrue annual leave while they receive the wage subsidy?
|Short answer, yes they do.
One of the obligations Work and Income states for receiving the Wage Subsidy is that you will not make any changes to your obligations under any employment agreement, including to rates of pay, hours of work and leave entitlement, without the written agreement of the relevant employee
No changes to leave entitlement should be made while receiving the subsidy. If we consider that annual leave accrual is the periodical accrual of annual leave which contributes to the employee’s annual leave entitlement, then we must continue to accrue annual leave for the hours that the employee was expected to work during the time they are receiving the subsidy. Anything less would indicate that the employer is not giving the employee their full leave entitlement.
|What do I need to know about the minimum wage increase set to occur on 1 April 2020 when using the Wage Subsidy?||
On 1 April 2020 the adult minimum wage increased from $17.70 to $18.90 per hour. The starting-out and training minimum wage rates increased from $14.16 to $15.12 per hour and will remain at 80% of the adult rate.
Employment NZ’s website states that during the subsidy period, if an employee is not actually working, employers can choose to pay a minimum of 80% of an employee’s pre-COVID-19 income. So, for an employee on the minimum wage who isn’t working, employers could continue to pay them at 80% of last year’s minimum wage. The employee must be paid at the new minimum wage when they do start working again.
|What are the recent modifications to the Wage Subsidy scheme that I need to know?
On March 27 further modifications were made to the Wage Subsidy.
Employers are now required to agree that, for the duration of the subsidy, they will make best efforts to retain the employees the subsidy was paid for.
If you are receiving the COVID-19 Wage Subsidy, you must:
As an Accountant, I have a number of clients that have received the Wage Subsidy and passed this on to their employees. At the end of the Financial Year, or earlier, I will need to know the total paid out under this scheme as it is non-deductible expenditure. Am I able to get this detail from SmartPayroll?
If employers process the Wage Subsidy (as per the Wage Subsidy Guide) using the COVID-19 Leave allowance component, this will be recorded. An Employee pay report can be run that will provide this detail when required.
You will need to export the report to Excel to get the details needed as the report shown in the SmartPayroll site is a summary only.
Government removes Covid-19 Leave Payment Scheme effective 3pm, 27 March 2020. And will add an Essential Services Leave Scheme effective 6 April.
The Wage Subsidy Scheme is still be available.
The Minister of Finance, Grant Robertson announced at 3pm on 27 March, 2020 that the Covid-19 Leave Payment Scheme would be disestablished as it was designed for a time before all of New Zealand was in Alert Level 4.
On the 2nd of April, The Government announced a new scheme intended to support essential workers who have to stay at home to comply with public health guidance, and whose employers are unable to keep paying them.
Essential employers who can financially support their workers with leave requirements or any special paid leave entitlements – without the use of the subsidy – should continue to do so.
Look for more information about the Essential Workers COVID-19 Leave Payment Scheme on the Work and Income website on Monday 6 April.