Covid-19 Subsidy Scheme: where to fill in non-taxable pay?

[domainer222]

I run a very small business. We have one owner manager and one parttime employee.

We're incorporated, so we use the online ROS payroll system.

As the business is so small, we don't have any payroll software, and I do the payroll using spreadsheets.

We therefore use the payroll forms provided by Revenue to submit our payrolls to them.

We qualify for the scheme as it's looking like our turnover will be down.

The instructions issued by Revenue are as follows:-

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1) Set PRSI Class to J9.
2) Enter a non-taxable amount equal to 70% of the employee’s Average Net Weekly Pay to etc...
5) It is important that employers do not include the Temporary Wage Subsidy payment in Gross Pay.

The PRSI class is no problem.
The problem is, in the online payroll forms provided by Revenue, there does not appear to be a field for "non-taxable pay".

The fields in the online form are:

Pay date
Pay period
Gross pay
RPN number
Pay for Income tax
Income tax paid
Pay for USC
USC status
USC paid
Pay for employee PRSI
Pay for employer PRSI
PRSI exempt (No/Yes)
PRSI class
Number of insurable weeks
Employee PRSI paid
Employee PRSI paid
LPT paid

Now, given that the subsidy can't go into Gross Pay, where does the subsidy go, that we are meant to enter?

I've already phoned the helpline, and after 20 minutes holding, I spoke with an officer from Rialtas na hEireann.

I'm 100% sure he could not see the form as he kept on asking me what I was seeing. He apologised and said as far as he could tell, there was no field in the Online Form for non-taxable pay.

I phoned again and spoke with a different officer from Rialtas na hEireann, again they said there was no field for that in the online form.

Does anyone know where the non-taxable pay (i.e. the subsidy) should go?

 

[domainer222]

Just heard back from Revenue:

"Dear Sir/Madam,

Thank you for your query.

Currently only Employers who are using a Payroll package can operate the scheme.

If an employer is manually inputting the details on ROS (submit payroll by online form), currently the options is not available

However, this is being reviewed. Please use the link below for updates".

C'est la vie! I'm consoling myself by having another dark chocolate ricecake.

 

[jcollins]

Hi Domainer222,

First I want to declare that I am Jason Collins the owner of CollSoft Payroll. We are a small Irish company, but our software is used to process the payroll of almost 20% of employers in Ireland - so I have declared who I am in case anybody is worried.

I would like to say that I think that the advice that you have received is wrong - but there is one thing that I need to check with the development team in Revenue for you.

There is no technical reason why you cant do it in ROS, but I will check that they have not blocked it. Myself, and all the other Payroll developers have a conference call every day with Revenue and they have never said that you needed software to receive the subsidy. In fact I think it would be illegal of them to block you from receiving the subsidy just because you were not using Payroll Software

Ok, the "Temporary Wage Subsidy Scheme" (TWSS) is a little bit convoluted but Payroll software is not doing anything special - trust me I know!

At this stage the TWSS is in what is known as the "Temporary Stage". This will change to the "Operational Stage" no later than the 20th April.

So what is the Temporary Stage? Well in this stage Revenue have no idea what subsidy any employee is entitled to and indeed there are no employers who are reporting the "Non-Taxable" payment that they are making to employees to Revenue - as you said there is no box to put it in.

That is exactly the same for Payroll Software - we are not reporting the amount paid to the employee to Revenue from our software. (Yet!)

When you send Revenue any Payslip that has a J9 PRSI Class, Revenue automatically send you €410 (I am assuming a weekly pay frequency).

SO if you enter a payroll on ROS with a Gross Pay of 1 cent (0.01) and a PRSI Class of J9 Revenue will send you €410.

There is no magic in what our software is doing - if the employer is not making any top up to the employee we are sending Revenue a submission with a Gross Pay of 0.01 and a PRSI Class of J9 and 1 Insurable week - thats it (we also set Pay for PAYE, USC, PRSI etc to 1 cent but the taxes are zero)

If you are making any additional payments then there are limits on what you can top up by, and those top ups are subject to PAYE and USC.

Ok, so Revenue sends you €410, but that may not be what you are entitled to.

You need to work our what your "Average Net Pay" was for the wages that you paid in January and February 2020.

So add up your total Gross Pay, PAYE, USc and PRSI for January and February

Then Net Pay = Gross Pay - PAYE - USC - PRSI (EE)

Finally your "Average Net Pay" is simply Total Gross Pay divided by the number of Insurable weeks.

Once you have calculated your Average Net Pay the the subsidy that you are entitled to is simply based on its Value;

€0 - €586 (per Week) = Subsidy of 70% of Average Net Pay
€586 - €960 = Subsidy of €350 per week
More than €960 per week - Bad News, no subsidy avaialble

You are allowed to top up your Pay by a certain amount that brings you back up to the Avergae Net Pay

We have a calculator on our website that shows the figures you can use - just look to our website collsoft.ie

But look there is a lot in what I have said above, and I have skimmed over a few details - trust me for a simple scheme they sure made it complicated

Basically I am pretty sure that you can process this without having Payroll Software - we dont have any special magic that you cant do by yourself.

If you would like me to call you to discuss them please PM me - dont worry I am not going to try and sell you anything. I would be more than happy to help you to get what you are entitled to without having to buy Payroll Software - you dont need it.

I am in the Payroll Business for 20 Years and I have been fortunate enough to have been supported by many employers over the years. I would like to help now in this time of crisis in any way that I can.

Kind regards

Jason Collins