The wage subsidy scheme:
supports employers adversely affected by COVID-19, so that they can continue to pay their employees
supports workers to ensure they continue to receive income, even if they are unable to work.
The modified wage subsidy scheme is available to all businesses adversely affected by COVID-19 including:
The aim of the scheme is to provide sufficient support to enable people to stay connected to their jobs, and continue to receive income now that we have moved to an Alert Level 4 shut down.
Employers can make new claims for any employees that they did not apply for under the original scheme.
Wage rates for employees
If you are receiving the COVID-19 Wage Subsidy, you must try your hardest to pay the employee named in your application at least 80% of their usual wages. If that isn’t possible, you need to pay at least the subsidy rate (ie, full-time or part-time). 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.
Employees who resign after their employer receives the wage subsidy funding
If an employee voluntarily ends their employment relationship (that is, they resign) the employer must notify Work and Income and will not be entitled to further subsidies for that named employee.
Tax treatment - Businesses
The modified wage subsidy scheme, and the previous COVID-19 leave and wage subsidy schemes, are considered excluded income to businesses and are also GST exempt. When passed on as wages, businesses don’t get a deduction for income tax purposes.
Tax treatment - Individuals
Payments to employees under the consolidated wage subsidy scheme, and the previous COVID-19 wage subsidy and leave schemes, are wages. Therefore, they are subject to standard deductions like PAYE, ACC levies, KiwiSaver contributions and student loan repayments.