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Calculate Underpayment of PAYE & USC on Covid-19 Temporary Wage Subsidy

The simple instructions given here will enable anyone in receipt of the Covid-19 Temporary Wage Subsidy to use the gross pay to net pay calculator to accurately determine the amount of their PAYE and USC underpayment:

1.  Go to the 1st pay-slip you received that includes the Temporary Wage Subsidy

2.  Enter the pay frequency, annual tax credit and cut off point, tax basis and period

3.  Select J9 as the PRSI class as this is the class as directed by Revenue

4.  In the “Taxable pay to the last pay-date”, enter the taxable pay to date as notified on your previous period’s pay-slip

5.  Enter your taxable pay as the sum of Temporary Wage Subsidy and any top up received from your employer for "the this period"

6.  Non-taxable deductions are PRSA’s and approved pension schemes etc.


The grey boxes contain the amounts of PAYE and USC you should have paid if PAYE Income Tax and USC rates applied to the Temporary Wage Subsidy payments through the payroll. The amount owed at the end of the year for this pay period is the difference between the amounts calculated by the Gross Pay to Net Pay Calculator in respect of PAYE and USC and the amounts deducted by your employer.

Repeat the process for your next period:


1.  Go to the 2nd pay-slip you received that includes the Temporary Wage Subsidy

2.  Enter the pay frequency, annual tax credit and cut off point, tax basis and period

3.  ……………
4.  ……………



Gross Pay to Net Pay Calculator Notes

 

The sum of the differences between what you paid and should have paid for the number of weeks you received the Temporary Wage Subsidy payments will be what you owe to Revenue at the end of the year assuming you remain in employment up to the end of the year and you income for the full year is above the PAYE threshold and you remain within the same tax band. Some people will owe less or nothing if their income is significantly reduced for the rest of the year and some people will owe more if their income is significantly increased for the remainder of the year.

Alternatively if you do not have the appetite for repeating the above for every time you receive the Temporary Wage Subsidy payment you can simply enter in the data as requested and note the difference between what you actually paid in Tax and USC as to what you should have paid as per the gross pay to net pay calculator when you get back to work after the Covid 19 pandemic. For any period after you return back to work and not receiving Temporary Wage Subsidy simply add the total amount of Temporary Wage Subsidy received to the Taxable pay for that period and note the difference between what you paid in PAYE and USC and what you should have paid.


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