Irish wage supports

Temporary Wage Subsidy Scheme

The Temporary Wage Subsidy Scheme (TWSS) operates from 26 March to 31 August. Chartered Accountants Ireland sets out the development of the rules for this subsidy in this document

Statistic published by Revenue indicate that over 664,000 employees received a subsidy payment under the TWSS at a cost of €2.9 billion to the Exchequer.

TWSS Webinars

Take a look at our recording of the webinar hosted on 29 April with representatives from the Institute, Revenue and Grant Thornton.  The accompanying slides are also available to download

An earlier webinar was recorded on 8 April. The accompanying slide deck can be downloaded here. See also related video by Gearóid Murphy, Principal Officer in Revenue with oversight on the wage subsidy scheme. (Password: WB2020)

TWSS and employees

TWSS payments are subject to income tax and USC. These payments were not taxed in real time under the PAYE system, and the tax due by employees is directly payable to Revenue. Preliminary End of Year Statements will issue to employees setting out draft over/underpayments of tax. These statements will be available to taxpayers through myAccount and Revenue will follow up with letters on a phased basis advising taxpayers to complete a return. 

Payments made to employees under the Employer Refund Scheme during 2020 are also subject to income tax and USC, and will be included in an employee’s Preliminary End of Year Statement. PUP payments are subject to income tax only.

There are two options for taxpayers with an underpayment of tax of less than €6,000 in 2020.

  • Option 1 – Pay the liability fully or in part through Revpay in myAccount; or
  • Option 2 – Have the full or remaining liability collected, without incurring any interest, by reducing tax credits from 2022 over a maximum of 4 years.

Where an underpayment of tax amounts to €6,000 or more, a demand notice will issue to the taxpayer. A taxpayer may then arrange to have up to €6,000 of the remaining liability collected, as outlined above. The remaining balance will have to be paid through Revpay in myAccount.

A BIK charge will not apply to payments made by an employer on behalf of an employee in respect of their 2020 tax liability arising due to the TWSS. Employers will not be entitled to a deduction under section 81(2)(a) TCA 1997 for these payments.

The Revenue webpage 2020 End of year communication for employers and employees provides additional information on the process.

Chartered Accountants Ireland’s Next Financial Year policy paper (p.15) and the CCAB-I’s 2021 Pre-Budget submission (p.7) made representations to the Government in the summer of 2020 to issue clear guidance and raise public awareness on how the tax due on TWSS and PUP payments would be collected. 

Employment Wage Subsidy Scheme


The Employment Wage Subsidy Scheme (EWSS) succeeds the TWSS from 1 September 2020 and it is set to continue until 31 March 2021.

See our weekly Tax News for updates to the EWSS. 

Chartered Accountants Ireland, in partnership with Sage, hosted a webinar with Revenue on Wednesday 26 August.  The webinar is available now for viewing. 

Revenue Guidelines

Revenue published a booklet, Guidelines on the operation of the Employment Wage Subsidy Scheme, which sets out comprehensive information on qualification criteria and operational criteria.

Revenue also published Guidelines on the operation of the July/August Sweepback as part of the Employment Wage Subsidy Scheme.

Employer eligibility

To be eligible for the EWSS, employers must demonstrate that:

  • their business will experience a 30 percent reduction in turnover or customer orders between 1 July and 31 December 2020 for 2020 pay dates and between 1 January  and 30 June 2021 for 2021 pay dates; and
  • the disruption is caused by COVID-19.

For 2020 pay dates, the reduction in turnover or customer orders is relative to:

  • the same period in 2019 where the business was in existence prior to 1 July 2019;
  • the date of commencement of a business to 31 December 2019; or
  • where a business commenced after 1 November 2019, the projected turnover or customer orders had COVID-19 disruption not arisen.
For 2021 pay dates, the reduction in turnover or customer orders is relative to:

  • the same period in 2019 where the business was in existence prior to 1 July 2019;
  • the date of commencement of a business to 30 June 2019, where the business commenced trade between 1 January and 1 May 2019; or
  • where a business commenced after 1 May 2019, the projected turnover or orders for 1 January 2021 to 30 June 2021.

The turnover test does not apply to employers registered under Section 58C of the Child Care Act 1991. Guidance from Revenue can be sought under an “Other Reasonable Basis” test, where the turnover and customer orders test does not adequately demonstrate the COVID-19 disruption to the business.

Employers must conduct a monthly review to ensure they continue to meet the eligibility criteria under the EWSS and cease making claims where the 30 percent reduction test is not achieved.  It is possible to re-register for the EWSS; however, Revenue confirmed that claims will not be backdated in these situations.

PAYE must be operated by the employer on subsidy payments forming part of wages to employees.  This means PAYE, USC and employees PRSI is operated by employers and the employee receives wage/salary net of tax.  A 0.5 percent rate of employers PRSI applies for employments eligible for the EWSS operating on a credit basis – see Revenue Guidelines for more details.

The subsidy support amounts are set out in the table below

Employee gross weekly wages Subsidy payable
Less than €151.50 Nil
From €151.50 to €209.99 €151.50
More than €204 and less than €1,462 €203
More than €1,462 Nil

Subsidies received are taxed on employers as part of their trading income but are ignored in the calculation of the 30 percent reduction in turnover test.

Level 5 revisions to the EWSS

The payment rates under the EWSS changed as a result of the imposition of Level 5 public health restrictions. The revised rates under the EWSS are effective from the next payroll date after 19 October and will run to the end of March 2021

The revised payment rates/bands are as follows:

Employee gross weekly pay

Subsidy payable

Less than €151


€151 - €202.99


€203 - €299.99


€300 - €399.99


€400 - €1,462


Greater than €1,462


Employee eligibility

The EWSS provides a subsidy for new and seasonal employees, in addition to existing employees.

Revenue’s guidelines confirm that the EWSS can be claimed for certain proprietary directors and this is also set out in Finance Bill 2020 (section 63(3)). 

There are no restrictions on the movement of employees under TUPE legislation. Employees employed otherwise than as part of a business, such as childminders, housekeepers, gardeners etc., are not eligible employees for the EWSS.

Proprietary Directors 

An employer may claim a subsidy for an employee who is a proprietary director where the following conditions are satisfied:

  • the employer meets the eligibility criteria for the EWSS,
  • the proprietary director is on the payroll of the eligible employer, and
  • the proprietary director has been paid wages which were reported to Revenue on the payroll of the eligible employer at any stage between 1 July 2019 and 30 June 2020.

Where a person is a proprietary director of two or more eligible companies, a claim for EWSS can only be submitted in respect of a single company.

Further expanded employer guidelines, including additional information on the inclusion of proprietary directors in the scheme, is expected to issue shortly.

Tax Clearance

Unlike the TWSS, employers must have a tax clearance certificate to be eligible to join the EWSS. Employers who qualify for tax debt warehousing and/or have a phased payment arrangement in place for non-COVID-19 tax debt will still be regarded as tax compliant for tax clearance purposes. Employers must maintain this tax compliance status through the course of the scheme to continue receiving EWSS benefit.

Tax clearance status can be checked in ROS – after logging in, current tax status is displayed above the grey banner for “My Frequently Used Services”. An application for a tax clearance certificate can be made through the eTax clearance service in ROS.

Registration for EWSS

The registration process is separate to obtaining tax clearance. Employers are required to agree a declaration through ROS, as set out in the guidelines, as part of the registration process. Registration applications will only be processed if the employer is registered for PAYE/PRSI as an employer, has a bank account linked to that registration, and has tax clearance.

July/August Sweepback

Employers who are eligible and registered for the EWSS had until 14 October to backdate a claim to 1 July 2020 for newly or seasonally hired employees not previously included in the TWSS.  This is called the sweepback facility.  

Further information on the Sweepback facility can be found in the Guidelines on the operation of the July/August Sweepback as part of the Employment Wage Subsidy Scheme.

Revenue checks

Revenue will undertake assurance checks in relation to the scheme. Accordingly, all records relating to the scheme must be retained. Further details on this compliance check programme will issue later. The scheme will be administered by Revenue on a “self-assessment” basis. Revenue will not be looking for proof of eligibility at the registration stage but will in the future, undertake a risk-based approach to reviews of employer eligibility.

Publication of employers

A list of employers availing of EWSS will be published in January 2021 and April 2021 to

COVID-19 tax under the spotlight podcast

Listen to our podcast where senior Revenue officials Anne Dullea and Gearoid Murphy joined Chartered Accountants Ireland to talk through eligibility criteria for the TWSS, along with common operational issues on running the scheme. (This recording is based on Revenue Guidance as at the date of recording on Wednesday 17 June).

In the media

RTÉ's News at One interviewed Brian Keegan, Director of Public Policy on April 22 about the tax implications of the government's Pandemic Unemployment Payment and the Wage Subsidy Scheme. You can listen to the interview here

RTÉ’s Morning Ireland interviewed Norah Collender, Professional Tax Leader on June 24 about the TWSS compliance programme initiated by Revenue. You can listen to the interview here.

Norah Collender also spoke on NewsTalk’s Pat Kenny Show and on RTÉ Radio 1’s Claire Byrne Show, during the week of 4 January 2020, on Revenue’s approach to the collection of tax from TWSS and PUP recipients.

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