COVID-19 SUPPORT

What support is on offer?

Wage Subsidy

This is the main form of support offered to all New Zealand employers, contractors, sole traders, self-employed people, registered charities and incorporated societies who have been impacted by COVID-19.

Leave Payment Subsidy

From 3pm on 27 March 2020, the COVID-19 Leave Payment is no longer available for employers. Applications already submitted will continue to be processed and paid.

You can find the full announcement here:  Beehive Announcement – COVID-19: Further steps to protect New Zealanders’ jobs

How much you can get

The COVID-19 payments will be paid at a flat rate of:

  • $585.80 to a person working 20 hours or more per week
  • $350.00 to a person working less than 20 hours per week.

The subsidy is paid as a lump sum and covers 12 weeks per employee.

So for example, if you’re claiming a ‘Wage Subsidy’ for 5 employees, you would receive a lump sum payment of $35,148. 

This is calculated as ($585.80 x 5 employees x 12 weeks) = $35,148.

Please refer to the WINZ website for more details: COVID-19 Employer Support

Where to apply

There are two separate application forms, accessible from the following links:

You can find additional detail on these here: COVID-19 Employer Support

How to fill in your application

We’ve completed a guide, with references and links, to help you fill in your application form.

You can download this PDF Guide here:

GUIDE: Filling out a COVID-19 Subsidy Application

Please refer to the Frequently Asked Question (FAQ) sheet for more detail and some of the questions we have been asked.

Disclaimer

The situation is continually updating, so please refer to the official links above for the latest details.

Frequently Asked Questions

Wage Subsidy

Which subsidy do I apply for?

The ‘Wages Subsidy’ is the form of support offered to all New Zealand employers, contractors, sole traders, self-employed people, registered charities and incorporated societies who have been impacted by COVID-19.

The ‘Leave Payment Subsidy’ as now been discontinued, as of 3pm on 27 March 2020. Applications already submitted will continue to be processed and paid.

Where do I apply?

Applications can be made through Work and Income, via the following links:

How much will I get?

The COVID-19 payments will be paid at a flat rate of:

  • $585.80 to a person working 20 hours or more per week
  • $350.00 to a person working less than 20 hours per week.

The subsidy is paid as a lump sum and covers 12 weeks per employee.

How do I fill in the form? And where can I find some of my details?

We’ve completed a guide, with references and links, to help you fill in your application form.

You can download this PDF Guide here:

GUIDE: Filling out a COVID-19 Subsidy Application

What are the tax & GST implications of the subsidy payments?

These are not subject to GST and are non-taxable income to the employer.

Does an employee need to pay tax on a wage subsidy or leave payment?

Yes, they will as the subsidy is paid to the employer who then pays wages to the employee as normal. This means it is subject to the usual PAYE, Student Loan, KiwiSaver deductions, etc.

If I’m self-employed do I have to pay tax if I receive a leave payment because I am in self-isolation?

Yes, this payment will be treated as income for tax purposes.

Do I need a NZBN number?

Those that complete the ‘Employer Application’ will need to include a NZBN number.

If you’re a business registered on the NZ Companies Register, you can find yours by clicking ‘Search’ here:

How do I register for a NZBN number?

Sole traders, partnerships and trusts who employ people, may not automatically be allocated a NZNB. However you can register for one here:

Get your NZBN

Employment Issues

What are some of the key employment issues?

We have been asked many questions relating to the wage subsidy and the requirement to pay 80% of employee’s normal income.  

Please refer to the attached link for an excellent guide from Employers Assistance Limited.

This also provides a wage variation agreement template to modify employment contracts.  We believe this is very important.

https://www.employers.co.nz/covid19-level-4-now-what-blog.aspx

Can holiday pay be used to top up the wages?

Yes. According to Employment Lawyers, it is possible for staff to take their annual leave entitlements to top up the wage subsidy. This is done by negotiation between the employer and individual employees.

Tax Matters And Filing Of Returns

What assistance is Inland Revenue providing?

IRD have just released their latest announcement which states they are willing to provide assistance where required.
It is really important that you continue to file your returns on time, even if you are unable to make payment.
IRD are offering flexibility, so get in touch with them via myIR to advise if you will have difficulty paying your tax.

You can find this on their blog and you can get in touch with them by logging on via myIR here.

We haven’t been able to sign our 2019 tax returns yet? What will happen with these?

We are all working from home to have these filed by the due date and will be emailing the results through to you.  

It is likely that Inland Revenue will give an extension of time for doing this.

Do I still have to file my Income Tax/GST/DED returns?

The short answer is ‘Yes’. However IRD have indicated there may be relief available for late filing of returns, penalties and interest. So if possible, try to file them.

Other Questions

Is the COVID-19 Wage Subsidy a gross or net amount?

It is a gross taxable amount; normal tax rules apply. It is included as part of the employee’s normal wages and is subject to the usual PAYE, Student Loan, KiwiSaver deductions etc. It would also fall within the definition of gross earnings for the purposes of Holidays Act 2003 calculations.

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.

My employee normally receives less than the COVID-19 Wage Subsidy amount each week. Do I have to pay them all of it anyway?

No. If your employee’s usual wages are less than the subsidy, you must pay them their usual wages. Any difference should be used for the wages of other affected staff – the wage subsidy is designed to keep your employees connected to you.

Reference: Business.govt.nz

Can an employee use their other leave entitlements if required to self-isolate?

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 COVID-19 Leave Payment.

Can my employees receive the COVID-19 Leave Payment if they work from home?

No, the payment is not available to those who can work from home during the period of self-isolation, and who can be paid normally by their employer.

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.

Stay safe and look out for each other

This section was last updated: 7.35am on 29/03/2020

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