Wage Subsidy and Resurgence Payments, What you need to know.

Affected by the move to Alert Level 4 on 17 August 2021 and The Current Protection Framework (Traffic Light System)?
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Wage subsidy August 2021 is available throughout New Zealand to support you in paying your employees two weeks’ worth of wages. Also available if you are self-employed.

What you need to know:
You need to meet the eligibility criteria and meet certain obligations. This involves completing a revenue decline test to show your business has and currently is being affected by the continuation of Alert Levels and traffic light systems, from 17 August 2021. For more information head over to here to Work and Income.

What About Income Tax:
There are some tax implications to consider with the wage subsidy.

• As the employer, you will not be entitled to an income tax deduction for wages paid out of the wage subsidy
• The amount of wages paid in over and above the wage subsidy will be deductible as normal
• You still need to make the usual PAYE deductions when you pay your employees.
• Any amount of the wage subsidy that you received and did not pass onto the employee will need to be repaid to the Ministry of Social Development. If it isn’t, it may be considered as taxable income, which you will need to include in your income tax return.
• Self-employed, you will need to pay income tax on a Wage Subsidy you receive, as it's a contribution to your wages or salary. Head over here to check out your Income Tax Rates

You can apply for the wage subsidy through the Ministry of Social Development.

Already Applied? Haven’t heard anything back as yet? Don’t worry, usually you will be emailed through the outcome of your application within 3 working days, sometimes there can be a bit of a backlog. 
You can check your application status by calling our Wage Subsidy line on 0800 40 80 40

Want to know more; head over here: Work and Income

Have you had a 30% drop in revenue due to COVID-19 alert level changes?

The resurgence support payment, RSP, might be just what you need to get you back on track. RSP is there to help you keep your business going if you have had a drop in revenue of at least 30% due to the COVID-19 level increases to level 2 or higher.

Haven’t applied yet? If your business is deemed viable, and are able to continue trading, you have until the 13th January 2022 to apply. There are 3 RSP. Yes, you can apply for all 3, however you will only receive 1 RSP payment for each:

• 4th RSP – 22 October 2021 to 1 December 2021.
• 5th RSP – 5 November 2021 to 1 December 2021 (payment at an increased rate).
• 6th RSP - 19 November 2021 to 1 December 2021 (payment at the increased rate).

What You Need to Know:

The RSP can only be used for business purposes and does not get included into your income tax return. You won’t be able to claim deductions for these expenses at the end of the tax year.

Have a GST registered business, you can claim GST for items you have paid for using the RSP payments. RSP is subject to GST, so you will need to return GST to IRD on the RSP.

The wage subsidy is available at the same time as the Resurgence Support Payment.

If you would like to apply for the RSP head over to here: IRD RSP
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Want to know more about the wage subsidy, or RSP payments and if you are deemed a viable business, come speak to us for more advice.