Employment Wage Subsidy Scheme (EWSS)
by Dave O'Brien

This week will see the new Employment Wage Subsidy Scheme (EWSS) go live with Revenue. This replaces the TWSS which will end on 31 August 2020. The TWSS was difficult to understand, difficult to manage and for the first few months nearly impossible to implement 100% correctly. However to the governments credit it pretty much allowed thousands of businesses to stay in afloat.


The new EWSS will be effective from 1 September. There is a look back period for July and August for certain employees who didn’t qualify for the TWSS (mostly seasonal workers and new hires). We will explain this later in the piece. The new scheme is a lot more straight forward to manage for employers and the Revenue have learned from the many mistakes of the previous incarnation of the scheme.


The basics:

  • Employers will receive a flat rate subsidy based on the number of employees on the payroll
  • The rate of subsidy is based on the gross weekly wage of the employee and is as per the following table:


Employee Gross Wage

Subsidy Payable

Less than €151.5


From €151.5 to €202.99


From €203 to €1,462


More than €1,462



  • Employers PRSI will be 0.5% on the wages paid to each eligible employee
  • The subsidy will be paid to the employer on the 14th day after the payroll month. So the first payment will be 14 October for the September payroll.

Employer Eligibility


In the main its quite simple. If your business expects to experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020 compared to the same period in 2019 then you qualify. The 6 month period is looked at as whole rather than month by month. Revenue state that you need review the position each month to see if the 6 month projections still merits your inclusion in the scheme. Be careful here though. You can apply for the scheme based on expected turnover being reduced by 30% and you are encouraged to deregister for the scheme if projections change and you are doing better than expected. However if your new projections end up being too optimistic you cannot back date the re-registration into the scheme. Hence you lose the subsidy for the period where you de-registered from.


Our advice here is simple. If you believe you may qualify for the scheme based on a projected 30% decline in turnover or customer orders then apply for it. On a month to month basis review your projections. If at any given period you realise you will not be 30% down over the 6 months then come off the scheme – but only come off the scheme when you are 100% positive you will not meet the 30% reduction.


Revenue in their guidance also have suggested that some companies will still qualify even if they don’t meet the 30% reduction in turnover or customer orders. Revenue say that some companies can still qualify if they have a “reasonable basis”. They haven’t given much more information on this. On a recent Webinar the Revenue said that while they have included this piece of guidance they have yet to see it applied in all the previous TWSS submissions to date and hence couldn’t give us an example of how one would qualify under a “reasonable basis”. I find this hard to believe. My own view is that this reasonable basis might apply to start ups or R&D type companies with zero turnover and have yet to instigate customer orders.


Finally on this point we can confirm that employer cash reserves are ignored for the purposes of qualifying for this scheme.


Other Important Points


Tax Clearance


The main item that employers need to be concerned about is in relation to tax clearance. All employers will be required to have tax clearance when applying for the scheme and also all the way through the scheme they will be required to retain tax clearance. Employers straight away need to resolve any tax clearance issues they have. Also tax clearance will only be issued where the employer and their connected parties have their tax affairs in order. For instance a company who runs a pub and that company’s tax affairs are up to date will still be refused tax clearance if the shareholder was involved in a previous business or partnership and that business or partnerships tax affairs are not up to date. Getting tax affairs up to date can take days but sometimes it can take weeks so any business contemplating applying for this will need to look at their tax clearance straight away. If the company has outstanding liabilities that arose pre Covid 19 then a payment plan will have to be entered into with Revenue before the company will qualify for the EWSS.


Proprietary Directors


The Minister for Finance thankfully back tracked and is now allowing proprietary directors claim the EWSS. However Revenue are not entirely happy with this. They are stating that it will only apply to “certain” proprietary directors. They have stated that additional guidance will issue in due course. I suspect that what they are trying to avoid is paying out the subsidy to proprietary directors who do not actually work in the business, however this will be hard to legislate for. We will update you in due course on this.


Connected Parties


Connected parties who were not on the payroll at any time between 1 July 2019 and 30 June 2020 will not qualify for the scheme. Connected parties generally means family members. 


Domestic Employees


Domestic employees will not qualify for the scheme. For instance housekeepers, child minders, gardeners, etc.


Payroll Submissions


Employers will be processing payroll pretty much ignoring the fact that they will receive a subsidy. All salaries will be taxed as normal, with the only difference being employers PRSI. Therefore we won’t have the issue of employees facing an additional tax bill at the end of the year as a result of the EWSS (they will still have a potential liability based on the TWSS payments). Gross pay will include notional pay and will be before pension deductions. Employers PRSI will be calculated as per normal on the payroll software but the employer will indicate in the payroll system that the subsidy is being claimed and Revenue will then generate an Employer PRSI credit to ensure that the overall employer PRSI due will be at 0.5% for each eligible employee. Note that any employee who was on the TWSS will continue to be taxed on a Week 1 basis for the remainder of the year.


July/August look back period


Certain employers can back date the claim for EWSS for employees who were not eligible for the TWSS in July and August. For instance if you had a new hire or only hired seasonal employees then they could now qualify. Revenue guidance on timing here is vital. You will need to provide a list of employees to Revenue before the 5th of September. Revenue will only issue the template for providing the list in late August. No additional submissions or amendments will be processed after 14 September. This essentially means if your application hasn’t been processed by 14 September then you will lose out. Employers need to get this list together now and then input this into the Revenue template when provided. Also it is not clear but it is suggested that if you don’t have tax clearance sorted by 14 September then you will lose out on this potential refund.


Other income to be included in the 30% projections for reduction of turnover


The EWSS is taxable in the hands of the employer but is not to be included in the projections for turnover. However any grant aid or state funding will need to be included as turnover when looking at your projections. Revenue confirmed that the restart grant should be included as turnover in your projections.




This is relatively straight forward and mirrors the TWSS registration. You just apply on ROS via MyEnquiries. Note though that applications cannot be back dated and registrations will only be processed if the company has a tax clearance certificate.


Anti- avoidance measures


Revenue have made it clear that they will come down hard on any companies who manipulate their payroll to ensure employees qualify. For instance laying off one member of staff and replacing them with 2 lower paid staff members who would both qualify. Another example would be where an employer defers an employees portion of salary to ensure qualification for the scheme.


Final points


This scheme would appear to work a lot more smoothly than the TWSS. It should be relatively straight forward. There will be concerns if actual turnover is more than the projected but Revenue have said they will not seek refunds where the employer comes off the scheme once they realise they will not meet the turnover thresholds. The lower rate is also a concern compared to the TWSS rate, as is the delay in Revenue paying the subsidy and the fact that tax clearance is necessary. The scheme though is aimed at viable business’s and the fact that tax clearance is required is understandable albeit a little annoying.


If you have any questions on the above, please do not hesitate to contact us here in Quintas and we will be happy to help.




Dave O’Brien

Tax Partner