TAX

If, as an employer I am receiving the wage subsidy on behalf of an employee, do I have to pay GST on the subsidy?
  • No – it will be treated as exempt from GST.


As an employer, do I have to pay tax on the wage subsidy I receive for an employee?

  • No, you don’t have to pay tax on a wage subsidy as it’s classified as excluded income.

 

Does an employee need to pay tax on a wage subsidy payment?
  • Yes, they will as the subsidy is paid to the employer as part of their normal wages. This means it is subject to the usual PAYE, Student Loan, KiwiSaver deductions, etc.

 

If, as an employer I am receiving the leave payment on behalf of an employee because they are in self-isolation, do I have to pay GST?
  • No – it will be treated as exempt from GST.

If I’m self-employed do I have to pay tax if I receive a leave payment because I am in self-isolation?
  • This payment will be treated as income for tax purposes.


If I’m an employee do I need to pay tax if I receive a leave payment because I am in self-isolation?

  • The leave payment will be paid to your employer, and you will receive it like normal wages. This means it’s subject to the usual PAYE, Student Loan, KiwiSaver deductions, etc.
LEAVE PAYMENT

If your employee is diagnosed with COVID-19, do they have to use their accrued sick leave before they are eligible for the COVID-19 leave payment?

  • Employees do not need to use their sick or annual leave entitlement before you can apply for the COVID-19 leave payment – it can be applied for right away. You can have a conversation with your employee about whether they would prefer to use any accrued sick or annual leave first, rather than the COVID-19 leave payment as there may be cases where the employee would receive more through their own sick leave than the COVID-19 payment.
CONTRACTORS

If I am a contractor, am I entitled to apply for the wage subsidy?

  • Yes. Contractors can apply for the wage subsidy using the ‘self-employed’ application, provided you meet the criteria.


How do I calculate whether I qualify for the part time or full-time subsidy if my income fluctuates?

  • Use an average of hours you worked per week over the last 12 months. If you have been contracting for less than twelve months then use the average for the period you have been contracting.
  • If this average is 20 hours or more, you can apply for the full-time rate, and if it’s under 20 hours you can apply for the part-time rate.
CASUAL EMPLOYEES

As an employer, can I apply for the wage subsidy on behalf of my casual employee(s)?

  • Yes. You can apply for the wage subsidy for any casual employee(s) that are employed by you at the time you apply and who would have been expected to work during the time you will receive the wage subsidy.

 

How do I assess whether my casual employee(s) qualifies for the full-time or part-time wage subsidy rate?

  • Casual employees may have variable hours, so to assess their subsidy rate, the employer should average their hours over the last year. If this average is 20 hours or more, they can apply for the full-time rate, and if it’s under 20 hours they can apply for the part-time rate.
  • If they have worked for less than a year, the employer should average the hours worked during their total employment period.
Hudson Taylor Chartered Accountants