Processing the Employment Wage Subsidy Scheme (EWSS) in Sage Payroll
New Employment Wage Subsidy Scheme (EWSS):
The government have introduced an extended Wage Subsidy Scheme in the form of the “Employment Wage Subsidy Scheme” otherwise known as the EWSS. The scheme provides a flat-rate subsidy to qualifying employers based on the numbers of paid and eligible employees on the employer’s payroll. It came into effect on the 31st July 2020 and it replaces the Temporary Wage Subsidy Scheme (TWSS) which has been in existence since the 4th May 2020. The EWSS is expected to run until the end of March 2021. Both schemes will run in parallel from 1 July 2020 until the TWSS ceases at the end of August 2020. The eligibility particulars for the EWSS are different to the TWSS, so if you didn’t qualify for the TWSS, there is a chance that you will qualify for the EWSS.
We have outlined the main points from this below, but please refer to the Revenue article for full details –> July Job Stimulus (including EWSS).
Joining the EWSS:
If you didn’t qualify for the TWSS, but you qualify for the EWSS, you must join the EWSS scheme from the ROS Website. This can be can be done as follows:
- Ensure your company has a valid Tax Clearance Certificate. (If not go to “ROS > My Services > Other Services > Manage/Verify Tax Clearance”).
- Register for EWSS on ROS under “My Services > Other Services > Manage Tax Registrations > Employment Wage Subsidy Scheme > Register > Accept Declaration”
How Will the EWSS Effect Payroll Processing?
Under the EWSS the processing of payroll will return to the normal manner (i.e. calculating and deducting Income Tax, USC and employee PRSI through the payroll). As the EWSS beneficiary is the employer, there will be no visibility of it on payslips and employers PRSI will remain at 0.5% (as per the TWSS),
The employee will however need to be flagged in the software as being part of the EWSS, because of this, there will be a software update released for Sage Payroll (version 23.3) on or before the 1st of September. You will be able to get this via your payroll software (Help > Check for Updates) and we will add a link here when it is available..
Sage Payroll Processing Steps:
- Download and update Sage Payroll to version 23.3.
– You can do this in the normal way from you software or click on this link –> Sage Payroll Update 23.3.
– See our article Sage Payroll Update Instructions and Preparation for guidance on this.
- In your Sage Payroll, set your period after the 1st of September.
- Go to “Miscellaneous > COVID-19 > Edit Employee EWSS/TWSS Setup”.
- Select the option that best matches your requirement (you can change individual employee records for exceptions to this afterwards).
– Change all employees…
– Disable all employees…
– Enable all employees….
- Amend individual employee records for exceptions to the above under the “Payment” tab.
- Ensure your employees are on the correct scheme and PRSI code (under the “Employee Record”).
Claiming EWSS for New Hires and Seasonal Workers:
Eligible employers may backdate a claim to 1 July 2020 for EWSS payments in respect of new hires and seasonal workers, subject to limited exceptions. Payments in respect of July and August are expected to be made by Revenue in mid-September, with payments for subsequent periods being made monthly in arrears thereafter. Further guidance and information for employers on how to make applications for new hires and seasonal workers will be available soon.
What Will the New Subsidy Rates Be?
Under the EWSS, eligible employers will receive a per-head subsidy on a flat-rate basis which will be determined based on the amount of gross pay that the employer pays to the eligible employee as shown in the table below. Payments to employers will be made monthly in arrears.
Employment Wage Subsidy Scheme Details (additional information):
- Eligible employers may backdate a claim to 1 July 2020 for EWSS payments in respect of new hires and seasonal workers, subject to limited exceptions.
- Non-TWSS employers, who have not previously availed of TWSS, will only be eligible to apply for the EWSS.
- TWSS employers will still be able to rehire eligible employees and continue to operate TWSS to 31 August 2020.
- To qualify for the EWSS, you must be able to demonstrate: that your business will experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 and that this disruption is caused by COVID-19.
- This reduction in turnover or orders is relative to:
- The same period in 2019 where the business was in existence prior to 1 July 2019.
- The date of commencement to 31 December 2019 or;
- where a business commenced after 1 November 2019, the projected turnover or orders.This reduction in turnover or orders is relative to:
- Self Assessment: To ensure you continue to meet the above eligibility criteria, you’re required to undertake a review on the last day of every month to ensure you continue to meet the above eligibility criteria, and if you no longer qualify, you should de-register for EWSS.
- If your company is currently taking part in the TWSS and you want to continue receiving Wage Subsidies, you will be obliged to switch to the EWSS on the 1st Sept 2020. The EWSS replaces the TWSS from this date onwards. Switching is not automatic and you will need to apply for the EWSS on the ROS website.