Workers on Wage Subsidy Scheme will have to pay tax back on it
Hundreds of thousands of workers being paid through the Wage Subsidy Scheme will face tax bills at the end of the year.
The scheme enables employers impacted by Covid-19 to continue paying staff.
More than 40,000 employers are availing of the Wage Subsidy Scheme which refunds them 70% of their employees' wage up to €410 per week.
The money paid to employees in this way is subject to tax, but it is not being taxed right now.
Neither Revenue or employers are deducting tax on behalf of employees being paid in this way,
This means workers whose employers have availed of the scheme are likely to owe Revenue money at the end of the tax year.
Senior Government Official Elizabeth Canavan is advising people to ensure they claim any tax credits to which they are entitled. Ms Canavan said: "If an individual has any additional tax credits to claim, for example health expenses, they can then do so by submitting an Income Tax Return. "The amount of income tax that an individual would have to pay depends on the amount of the income that they earn and on their personal circumstances. "It’s not possible to give general advice but guidance on how to calculate your income tax can be found on Revenue’s website."
However, tax credits are unlikely to completely cancel out what an individual will owe. Employees will be able to choose to pay the bill in a lump sum, or spread it out over next year's pay packets.
Source: Irish Examiner