Temporary Wage Subsidy Scheme

This page provides information on Revenue’s COVID-19 Temporary Wage Subsidy Scheme. This page was last updated on Wednesday, 24 June 2020

Members may also wish to refer to our weekly tax newsletters, issued every Monday, for updates and responses to member queries by Revenue.  

COVID-19 Temporary Wage Subsidy Scheme

The COVID-19 Temporary Wage Subsidy Scheme (TWSS) for employers is provided for by COVID-19 legislation (Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020). The scheme enables employers affected by the pandemic to receive significant supports from the State directly through the payroll system. The scheme is administered by Revenue.

The Scheme operates from 26 March 2020 to the end of August as per the latest announcement on TWSS by the Minister for Finance and Public Expenditure and Reform . The Scheme is broken down into two phases:

Phase 1 operated from 26 March until 3 May.
Phase 2 operates from 4 May to the end of the scheme.

Operational Phase

The second phase - 'Operational Phase’ - applies from 4 May 2020, for payroll submissions on or after that date. 

Revised subsidy rates and measures for the scheme came into effect from 4 May. The revised subsidy rates are illustrated in the table below. No backdating of these revised rates prior to 4 May 2020 is permitted. 

Subsidy rates with effect from 4 May 2020

Employees earned on average

Subsidy amount

Less than or equal to €412 per week

85% of ARNWP to a maximum of €350 per week

More than €412, and up to €500 per week

Flat rate of up to €350 per week

More than €500 and up to €586 per week

70% of ARNWP, subject to a maximum of €410 per week

More than €586 and up to €960 per week

New tiered arrangement to a maximum of €350 per week

*Tapering or restriction of the subsidy applies to all cases, except those where Average Revenue Net Weekly Pay (ARNWP) does not exceed €412 where the additional gross pay paid by the employer and reported on their payroll submission, plus the wage subsidy amount, exceeds the employee’s ARNWP

Under the Operational Phase, the subsidy paid to employers is based on each individual employee’s Average Revenue Net Weekly Pay (ARNWP).  An employee’s (ARNWP) is based on January and February 2020 payroll submissions made to Revenue for an eligible employee. Revenue calculates the employee’s ARNWP and provides this to the employer in the Employer CSV file.  

Revenue’s FAQs cover the details on the Operational Phase of the TWSS. 

Revenue has also developed a Sample Subsidy Calculator in excel format which may help to demonstrate how an employee's subsidy can be calculated during the Operational Phase. A sample CVS File and an Employer CSV Description are also available on Revenue's website

From 16 April 2020 the scheme applied to employees who had an average net weekly salary greater than €960 (€76,000 gross p.a.) but their post-COVID-19 pay has fallen below €960 per week.  A subsidy may be available in respect of these employees based on the level of reduction in their pay and their amount of the employer top up payment. The subsidy will be tapered to ensure that the net weekly pay does not exceed €960 per week.

Employer eligibility

The TWSS is available to employers across all sectors excluding the Public Service and Non-Commercial Semi-State Sector. To qualify for the scheme a business must be experiencing a significant negative economic disruption due to the COVID-19 pandemic.

Per Revenue guidance, eligibility for the Scheme is determined largely on the basis of self-assessment and a declaration by the employer concerned. A key indicator is that there is to be an expected decrease in turnover by 25 per cent for Quarter 2, 2020. This decrease can be gauged by reference to Quarter 1 2020 for example, or against another reasonable reference period.   
Businesses with significant cash reserves will not necessarily be disqualified from the scheme. During Dáil debates on the legislation, the Minister for Finance addressed some of the deputies’ points on employers’ eligibility for the scheme. Responding to Deputy Michael McGrath’s comments on businesses having cash for operating expenses and investments the Minister said “Deputy Michael McGrath presents the concept that the presence of cash reserves would in some way debar a company from participating in the scheme. I do not believe that will be the case. I think it is very possible that companies will have cash reserves, precisely for the reason the Deputy refers to, that they have costs coming up that they know they need to meet.”  

The Institute recommends that employers maintain any supporting records which clearly show the negative economic impact to their business arising from COVID-19. This will simplify the handling of any follow up discussions or checks by Revenue post the crisis. Examples of the types of documentary evidence are set out in the Revenue guidance.  

Revised employee eligibility criteria  

Revenue confirmed that certain employers who had not fulfilled their PAYE reporting obligations for February 2020 by 15 March 2020, can access the scheme.

The scheme is extended to employers provided that:

  • The employees in question were included on the employer’s payroll on 29 February 2020
  • The February 2020 payroll submission was submitted to Revenue before 1 April 2020, and
  • Payroll submissions for all previous months were submitted to Revenue before 15 March 2020

The notice from Revenue states that “any employers that were previously unable to access the TWSS and who meet the revised criteria are now included in the Scheme. Where they wish to avail of TWSS payments they should ensure eligible employees are set to J9 PRSI class on future payroll submissions.” 

Compliance programme

Revenue announced they will be conducting a programme of compliance checks on all employers availing of the TWSS on Tuesday, 23 June. As detailed in Revenue’s eBrief, letters will issue to employers, and their agents, through the ROS Inbox.

Maternity and adoptive leave employees

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD announced plans on 29 May, to make the TWSS available to employees returning to work following maternity or adoptive leave.  

Revenue implemented changes to the TWSS on 8 June. As detailed in Revenue’s eBrief, the TWSS for employees returning to work, following a period of maternity leave etc., can be availed of through completion of a form, available to download through myEnquiries. The form can be accessed as follows:

  • log into ROS myEnquiries
  • click Add ‘A New Enquiry’
  • select Category ‘Covid-19: Temporary Wage Subsidy’
  • select Subcategory ‘TWSS – Maternity or other benefits’.

Paragraph 3.15.1 of Revenue’s TWSS FAQs, provides further detail on claiming TWSS for employee returning to work, following a period of maternity leave etc. A list of information required to complete the relevant form is included in the same paragraph.

Employers will receive appropriate subsidy payments from 12 June 2020. The subsidy will be backdated to the later of; the date employment recommenced, or 26 March 2020.

For employees who were ceased from payroll and in receipt of the Pandemic Unemployment Payment (PUP), no retrospection will apply as the individual was already in receipt of income support payments. However, employers may rehire these employees and apply the TWSS for these cases once their PUP claim has been ceased with the Department of Employment Affairs and Social Protection.

Revenue guidance for employers

Revenue published guidance on Employer Eligibility and Supporting Proofs for the scheme (20 April).  Revenue’s TWSS FAQs are updated regularly. 

Revenue guidance for employees

Revenue published Frequently Asked Questions (version 5) for employees whose employers have been affected by the COVID-19 Pandemic and are availing of the Temporary Wage Subsidy Scheme (TWSS) and cover a range of common questions from the employee's perspective. 

COVID-19:  Parliamentary questions responses

The Department of Finance publishes COVID-19 PQ responses.  The information included in the responses may be helpful as you deal with the many complexities and issues arising from the impacts of COVID-19.  

Minister for Finance, Paschal Donohoe confirmed in a response to Parliamentary questions, on Tuesday 17 June, that TWSS payments will not be clawed back where an employee is subsequently laid off. Further details of COVID-19 parliamentary questions have been summarised in this RTÉ article.


Publication of employers

There has been some commentary regarding the publishing of the names of employers availing of the scheme. We understand that some businesses may have reservations about this. However, almost every business in the country is affected by the COVID-19 crisis, the list will be published after (and not during) the scheme, and there is precedent for companies which benefit from tax administered schemes such as the EIIS to feature on lists of beneficiaries.

Treatment of employer top-up-payments

Under the terms of the TWSS, an employer can make an additional payment or ‘top-up-payment’ to their employee to fully or partially make up the difference between the amount provided by the subsidy scheme and the employee’s Average Net Weekly Pay. The additional payment cannot be re-grossed and the payment is treated as gross pay and liable to Income Tax and USC based on the employee’s tax credits and rate bands. 

The Emergency Measures in the Public Interest (Covid-19) Act 2020 (Part 7) is silent on the calculation of the ‘top-up-payment’ and the treatment of such payment, so much depends on Revenue’s operation of the scheme and their guidance. 

Revenue provided examples in its FAQ document showing how to calculate the Average Revenue Net Weekly Pay, the impact of the ‘top-up-payment- on the amount of the subsidy the employer will receive and the PRSI class (FAQ 4.4.2).  It is worth reviewing the examples to better understand how Revenue are operating the scheme.   

Please also bear in mind that the Temporary Wage Subsidy Scheme is a government measure to provide financial assistance to employers and support their efforts to retain employees.  Any TWSS payments or repayments made by Revenue under the scheme are to/from employers, not to/from employees.  

Employers ceasing to operate the scheme

Steps for the employer in ceasing to operate the scheme:

  1. Stop making any further J9 payroll submissions to Revenue – (employer circumstances have changed, and eligibility criteria no longer met).
  2. Ensure the PRSI class on all of employees is returned to the correct PRSI class and used for all future payroll submissions.
  3. Retain all records on the operation of the scheme, including all subsidy payments made to employees.

Further details on ceasing to operate the scheme are included in Revenue’s TWSS FAQ.

Dealing with Revenue  

Revenue can be contacted on the National Employer Helpline (01 7383638). This telephone service from Revenue as well as the ROS Technical Helpdesk, is open. All other telephone services from Revenue are closed for the crisis period.   

COVID-19 Wage Subsidy Scheme Webinar

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. The webinar focused on the recent changes to the scheme, the Operational Phase from 4 May, practical calculations of the subsidy amount and answers to members’ common queries.

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An earlier webinar was recorded on 8 April (see below). 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)

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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.

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