COVID-19 Wage Subsidy

A practical guide to Wage Subsidy support for New Zealand businesses

Eligibility checklist

  • Available to New Zealand employers (including limited liability companies, registered charities, incorporated societies etc.), contractors / sole traders / the self-employed / partnerships etc. 

  • Your business must be registered and operating in New Zealand.

  • Where claiming for employees, they must be legally working in New Zealand.

  • Due to COVID-19, your business must have experienced, or predict to experience, a minimum 30% decline in revenue.   

  • Your business must have taken active steps to mitigate the impact of COVID-19.

  • You must commit to making your best efforts to both retain employees and pay them a minimum of 80% of their normal income for the subsidised period.

Practical steps

Calculate decline in revenue of 30% - do a comparison of current month vs. prior year (or current year for new businesses) - save this calculation.

Predicted revenue - what is this based on and are the assumptions reasonable ie. cancelled bookings, cancelled orders, being forced to close for 4 weeks. 

Does the revenue decline directly relate to COVID-19? Document this

Can you make "best efforts" to retain staff over a 12 week period? Prepare a cashflow forecast - for the 12 week subsidy period at a minimum. Consider dropping wages to 80%.

Take active steps to mitigate the impact of COVID-19: Call or email your bank, advisor, industry association - Document this

The size of your workforce

What level of wages can your business afford to maintain. Can you maintain the 80%? 

Communicate to employees that you will apply for the wages subsidy. Whilst employee consent is no longer required since the national emergency was declared, it is recommended that you notify employees. 

Taking active steps to mitigate the risk of COVID-19 doesn’t stop here - continue to document the steps as you work through them

Consider legal requirements 

You don’t need evidence to apply online, but be aware you might be audited. We recommend documenting all the evidence before applying. 

When making decisions and renegotiating wages are you acting in good-faith?

Logon & apply online 

What you need to apply: 

Business IRD Number

IR Customer Name

Business Address

Contact Name

Contact Email

Contact Mobile

Bank Account number

Employee details: First & Last name, date of birth, IRD number, employment status fulltime/parttime

Before you click submit, print a copy. 

For large employers, file upload is available.  Alternatively consider using the PwC BOT service.

The government is aiming to have the funds to you in 5 days

You will get a text and email once the payment is made

You will receive the payment in one lump sum 

You need to continue to pay your payroll to the employees you applied for the subsidy for. You should have recalculated wages already (if you are dropping to 80%), on-pay this new amount to employees. 

Continue to update your cashflow on a weekly basis at a minimum. Cashflow is key!

Ensure you have documented your approach to claiming the subsidy.

You need to continue to file your PAYE returns as normal.  However, there are options for tax payment flexibility if discussed with Inland Revenue.

You may be audited, and if you provide false or misleading information, you may be investigated for fraud

You need to notify the government  if circumstances change that affect your eligibility.

You will have to repay any amount to which you are not entitled.

Consider whether an independent sign off by PwC on the validity of your claim would be of value.

Guiding principles and how we can help

Wage Subsidy support was introduced rapidly in response to the Covid-19 Alert Levels 3 and 4. With no legislative framework underpinning the scheme it is important that employers understand the core principles to guide their decision making. 

Those guiding principles are that claimants:

  • Apply their “best efforts” to ensure employees retain their employment.

  • Provide accurate information to support a valid claim.

  • Ensure that if circumstances change and they cease to be eligible in full or in part, that this is communicated with MSD

  • Apply their "best efforts" to pay employees at least 80% of their normal salary and wages where possible.

  • Act in good faith with their employees.

The key rationale for this initiative is that the Government wants to support businesses and provide job security to employees through this unprecedented time.

We can assist with:

  • Your wage subsidy application

  • Employee communication protocols

  • Providing an independent sign-off for your claim

  • Planning for the future

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Scott McLiver

Partner, Auckland, PwC New Zealand

+64 21 820 945

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Jan Gatley

Partner, Waikato, PwC New Zealand

+64 21 190 7011

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Partner, Wellington, PwC New Zealand

+64 21 494 117

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Phil Fisher

Partner, Wellington, PwC New Zealand

+64 27 462 7505

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Geof Nightingale

Partner, Auckland, PwC New Zealand

+64 21 940 346

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