New Zealand only

The New Zealand Government has announced a wage subsidy to support businesses impacted by COVID-19. To see if you're eligible, check the NZ Government’s fact sheet on the wage subsidy.

This subsidy is taxable and functions in a similar way as Accident Compensation Corporation (ACC) payments. That means, employers are required to pay 80% of their employee’s wage during this time.

The government will pay a wage subsidy as a lump sum and covers 12 weeks per employee.

The amounts of the subsidy are:

• $585.80 (for employees who work 20+ hours), or
• $350.00 (for employees who work less than 20 hours)

This is a Gross amount and supplemented with the employee’s wages up to 80% of what they would normally earn.

To keep it clear for your employee’s and yourselves, we recommend setting up a new pay item for the subsidy payment.

For more information, see the NZ Government’s Employer COVID-19 wage subsidy and leave payment information sheet.

Example:

An employee normally earns $1000 for a 38-hour week.

Under the COVID-19 wage subsidy, the employer will now be required to pay their employee $800 per week, which is 80% of their normal wage.

Of the $800 payment, $585.80 will consist of the government subsidy.

Creating a COVID-19 pay item

'Pay items' are the additional earnings and deductions in an employee's pay, on top of their normal salary or wages, including the COVID-19 wage subsidy.

When you create a pay item for COVID-19, you can assign it to one or more employees—saving time with your payroll.

Then when you do a pay run, the pay item will be included in your employees' pays.

OK, let's step you through it.

What's next?

When you're done, don't forget to assign pay items to your employees to ensure they're included on their pays.

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