July Job Stimulus – Employment Wage Subsidy Scheme

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EWSS is an economy-wide enterprise support that focuses primarily on business eligibility.  The scheme provides a flat-rate subsidy to qualifying employers in businesses negatively impacted by COVID-19 based on the numbers of eligible employees on the employer’s payroll. 

The EWSS will replace the Temporary Wage Subsidy Scheme (TWSS) from 1 September 2020 and is expected to continue until 31 March 2021.  For the months of July and August, EWSS runs in parallel with the TWSS.  For employers who are eligible for both schemes, EWSS starts for pay dates on/after 1st September 2020. 

We have set out below some key features of the EWSS:

  1. Qualifying Criteria for Employers:
    Employers must possess a valid tax clearance to enter the EWSS and continue to maintain tax clearance for the duration of the scheme, unlike the TWSS requirements. In addition, employers must be able to demonstrate that their business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020 and this disruption is caused by Covid-19.  Therefore, it is important to maintain records to support eligibility.

    Employers are required to undertake a review on the last day of every month to ensure they continue to meet the eligibility criteria and deregister if they no longer qualify.  Certain childcare businesses do not have to meet the turnover test.

  2. Eligible Employees
    Employees are eligible if they are in receipt of weekly gross wages between €151.50 and €1,462 (except certain proprietary directors and certain newly hired connected parties).  However, it has been agreed that certain proprietary directors can qualify for EWSS and further information is expected to be published by Revenue shortly.

  3. Registration for EWSS
    A separate registration process is required for EWSS as the eligibility criteria differs materially from the eligibility criteria for TWSS.  EWSS registration cannot be backdated.  If an EWSS payment submission is filed without first registering for EWSS, it will be rejected in full. It is vital that registration is done before any payments are made.  Supporting evidence for the basis for entering and remaining in the scheme should be retained on file.

  4. Subsidy
    The subsidy payable to the employer is based on an employee’s gross weekly wage, including notional pay, before deductions and excluding non-taxable benefits:
Employee Gross Weekly WagesSubsidy Payable
Less than € 151.50Nil
From € 151.50 to € 202.99€ 151.50
From € 203 to € 1,462€ 203
More than € 1,462Nil
  1. Operation of EWSS
    The EWSS will be administered by Revenue on a “self-assessment” basis and will re-establish the normal requirement to operate PAYE on all payments. This includes the regular deduction and remittance of income tax, USC and employee PRSI.
  1. Claiming EWSS
    On receipt of an eligible EWSS payroll submission from a registered employer, Revenue will calculate the subsidy payable.  Revenue will process the payroll submitted, post a statement into employer’s ROS inbox by the fifth day of the following month and a payment will then be made into the designated bank account as soon as practicable after the payroll return filing date (14th of the following month).  If an employer does not have tax clearance on the return due date, the subsidy payment will not be processed.

  2. PRSI
    A 0.5% rate of employers PRSI will continue to apply for employments that are eligible for the subsidy.  Employers are required to report and apply the full rates of employer and employee PRSI as normal.  On receipt of payroll submissions, Revenue will apply a reduced rate of 0.5% employer PRSI in respect of eligible employees for whom a subsidy is payable. Monthly employer PRSI liabilities will be revised accordingly by Revenue.

  3. Compliance and publication
    Revenue will undertake an assurance check programme at a later stage and a list of employers availing of EWSS will be published on the Revenue website in January 2021 and April 2021.

If you require further detail on EWSS, please contact
Desi Foley, Tax Director (desi.foley@gilroygannon.com),
Laura Cassidy, Senior Tax Manager (laura.cassidy@gilroygannon.com)
or your usual Gilroy Gannon contact.

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