Depending on your circumstances you may be eligible to apply for a wage subsidy paid by the Ministry of Social Development (MSD).
Employers, including sole traders and the self-employed, may be eligible for a wage subsidy paid by the MSD if they have been affected by COVID-19. More information on this subsidy, including information on how to apply if you are eligible, is available on the Work and Income website.
Wage subsidies should be passed onto the employee by the employer and processed as part of the employee's normal wages. All deductions (such as PAYE, KiwiSaver and child support) should be made as normal.
If the total wage (the subsidy plus the employer-funded pay) amounts to the same wages as previously, the pay and deductions on their payslip should be the same. You may choose to top up the subsidy with cash payments or annual leave, but this should be arranged between the employee and employer.
The subsidy doesn't need to be accounted for separately when filing your Employment Information each payday. Include the subsidy and any employer-funded pay as 'total wages paid' for each employee.
Some software packages may require you to identify the subsidy. If you are not sure what to do, check with your software provider.
The employer is not liable for income tax or GST on the subsidy received from MSD and is not entitled to an income tax deduction for wages paid out of the wage subsidy.