How to run your payroll using the wage subsidy
As is the current situation across the board, the wage subsidy guidelines are also a bit of a moving feast. Some employers are concerned about the potential implications of making a mistake with their application, particularly if you have based the application on a forecast position. Here are a few of our recommendations to help you through this process:
- If you think you meet the criteria then you are entitled to apply for the subsidy. However, you will need to have evidence to support this assumption. If your sales remain unchanged or increase during this period then you should NOT be applying for the wages subsidy.
- If you have staff you want to retain for continuity and security when we come out of lockdown but can't afford to pay their wages as a result in a drop in sales/income then you should certainly apply for the wages subsidy. This at least gives you and your staff a base wage to draw on for the 12 week period.
If you have already received the wage subsidy then you may now be preparing your first payroll with the subsidy. Here's what you need to do:
- Check the Work and Income website before you process the payroll as it is being updated regularly (especially regarding part-time employees)
- Set up a spreadsheet to keep track of your employees, what subsidy you received and how much has been paid out each pay-run
- Ensure you still adhere to normal employment law rules through this period
Remember this is uncharted territory and the rulebook is being written as we go. If you are acting in good faith and doing your best to look after your staff, then you shouldn’t have anything to worry about.
The main point is that the wages subsidy is only to be used for staff wages - you can top up their wages if this is under their normal pay. If the employee leaves or you stop paying their wages then you will need to contact the IRD about returning any unused funds.
And if you have any questions at all or need any extra help with this then please give us a call! Our normal landline number is managed as normal plus we are available by email or messenger.
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The team at Rural Accountants pretty much manage all our administrative tasks for the group including payroll and tax planning, ensuring we don’t pay any more than necessary. They are at the forefront of technology and have helped us get up and running with Xero and Figured which is much more efficient than the way we used to work.
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