Employees receiving TWSS now taxed on W1 basis

Jun 29, 2020

Revenue have placed all employees receiving payments under either the TWSS or the PUP on a ‘Week 1 basis’. This move is an attempt to minimise potential tax liabilities at End of Year reviews as the TWSS and PUP are not taxed in real time through the PAYE system. 

Notifications to employers to operate the Week 1 basis are available in ROS since 21 June 2020. Where an employee is already on the Week 1 basis no further action is needed. 

TWSS payments made to employees are liable to income tax and USC, while the PUP is liable to income tax. However, the TWSS and PUP are not being taxed in real-time through the PAYE system and instead will be calculated as part of the employee’s End of Year review. With the continuation of the TWSS to the end of August 2020, to mitigate the possible impact on the employee End of Year review, Revenue placed all employees receiving payments under either the TWSS or the PUP on a Week 1 basis. However the latest Revenue statistics indicate that refunds of income tax of €145million have already issued to date over the term of the TWSS.  More details are set out in the FAQs TWSS guide for employees