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	<title>Caleb Wilson &#8211; Hunter McLeod Chartered Accountants Queenstown</title>
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	<title>Caleb Wilson &#8211; Hunter McLeod Chartered Accountants Queenstown</title>
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		<title>Wage Subsidy and Paying Employees</title>
		<link>https://huntermcleod.nz/wage-subsidy-and-paying-employees/</link>
		
		<dc:creator><![CDATA[Caleb Wilson]]></dc:creator>
		<pubDate>Wed, 25 Mar 2020 19:52:58 +0000</pubDate>
				<category><![CDATA[Articles]]></category>
		<category><![CDATA[COVID-19]]></category>
		<category><![CDATA[Covid-19]]></category>
		<category><![CDATA[Wages]]></category>
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					<description><![CDATA[<p>Following the government’s announcement on Monday, you may be wondering what you need to do with your staff. All non-essential [&#8230;]</p>
<p>The post <a rel="nofollow" href="https://huntermcleod.nz/wage-subsidy-and-paying-employees/">Wage Subsidy and Paying Employees</a> appeared first on <a rel="nofollow" href="https://huntermcleod.nz">Hunter McLeod Chartered Accountants Queenstown</a>.</p>
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				<h1 class="trail-title">Wage Subsidy and</h1>
<h1 class="trail-title">Paying Employees</h1>
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	<p>Following the government’s announcement on Monday, you may be wondering what you need to do with your staff. All non-essential businesses are required to close from 11:59 pm on Wednesday 25 March 2020.  We are doing our best to keep you informed, however some of the terms around paying employees during the lock-down period are not very specific.<br />
Below is a course of action which should fall in-line with the guidance provided.</p>
<h5><strong>Working from home</strong></h5>
<p>Where employees can work from home, they should do so and can be paid accordingly.</p>
<p>Example: Brett normally works a 40 hour week. Brett is able to work from home however his hours have reduced to 32 hours a week. He is paid for the hours he works (32 hours) as he is still doing 80% of his normal weekly wage.</p>
<h5><strong>Where employees cannot work from home</strong></h5>
<p>Where employees can’t work from home, you can pass on the wage subsidy ($585.8</p>
<p>0 or $350.00 per week). You could negotiate with your employees to use some of their annual leave to top them up to 80% of their normal pay (the guidance on what to do specifically in this case is was not very clear). The IRD have now clarified (in the link below) that it is up to the employer whether they top it up.</p>
<p>Example: Mary normally works a 40 hour week ($1,000 gross wage per week) but is unable to work from home. Her employer has applied and received the wage subsidy for her from Work and Income due to being affected by COVID-19 (i.e. Mary is still employed but due to the lockdown is unable to work).</p>
<p>When Mary’s pay gets processed for her first week of the lock down, her employer pays her the wage subsidy of $585.80 (less tax). This is 59% of her usual wage. Mary and her employer may negotiate to use $214.50 of her annual leave or by an employer contribution to bring her up to $800.00 (which would be 80% of her normal wage).</p>
<h5><strong>Payroll systems:</strong></h5>
<p>Crystal Payroll: Crystal has automatically set up a COVID-19 Leave type and a COVID-19 Wage Subsidy income type which you can use when paying employees.</p>
<p>Xero Payroll: You need to create the new COVID-19 unpaid leave type and COVID-19 earnings type. (Let us know if you are on Xero payroll and we will provide assistance on doing this).</p>
<p>Let us know if you want us to review the first pay you process for your employees.</p>
<h5><strong>Wage Subsidy</strong></h5>
<p>Wage subsidies are available for affected employers to subsidise an employee’s pay by $585.80 per week for an employee who works 20 or more hours per week, or $350.00 per week for employees who work less than 20 hours per week. A condition of receiving the wage subsidy requires that you have a downturn in profit of 30% from the same month the year before, and that you make best efforts to top up an employee’s pay to 80% of their normal pay from the subsidy amount where possible. Presumably the government would prefer that employees receive at least the subsidy amount and remain employed, as opposed to receiving nothing (or moving on to a benefit). The purpose of the subsidy is to keep employees employed. Any business that has had to close due to the lockdown will likely qualify for the wage subsidy.</p>
<p>You will need to apply for the subsidy via the Work and Income website and complete and application form.  If the wage subsidy is approved, the subsidy will be paid directly into your business bank account 5 days from it being accepted (the whole 12 weeks is paid in a lumpsum), and you should then pass this on (per pay period) to your individual employees. The link to the application form is below:</p>
<p><a href="https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html" target="_blank" rel="noreferrer noopener" aria-label="https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html (opens in a new tab)">Work &amp; Income – A-Z Benefit</a><a href="https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html" target="_blank" rel="noreferrer noopener" aria-label="https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html (opens in a new tab)">s</a></p>
<p>Some useful facts regarding COVID-19 tax related issues from IRD are in the link below:</p>
<p><a href="https://www.ird.govt.nz/Updates/News-Folder/covid-19-novel-coronavirus---your-questions-answered" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">IRD – Your Questions Answered</a></p>
<p>We understand these are uncertain times however, all our staff at Hunter McLeod will be contactable and working from home during the 4 week lock-down period.<br />
Please <a href="https://huntermcleod.nz/covid-19-office-closure/">contact us</a> if you have any queries, we are here to help.</p>
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</div></div></div></div></div></div><p>The post <a rel="nofollow" href="https://huntermcleod.nz/wage-subsidy-and-paying-employees/">Wage Subsidy and Paying Employees</a> appeared first on <a rel="nofollow" href="https://huntermcleod.nz">Hunter McLeod Chartered Accountants Queenstown</a>.</p>
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