The wage subsidy and minimum wage.

Here are some helpful links for yourself and your business in this uncertain time:

See the Covid website

https://covid19.govt.nz/

https://covid19.govt.nz/help-and-advice/for-businesses-and-organisations/

See the Work & Income website for Employer Support

https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html

Don't forget if you are a Xero Subscriber you have free and conditional access to help for yourself or your staff

https://www.xero.com/nz/xap-faq/

The wage subsidy for NZ employers and sole traders

The Government's wage subsidy is available for all employers that are significantly impacted by COVID-19 and are struggling to retain employees as a result.

The main details of the wage subsidy are as follows but there are still details being worked out. We will keep you updated.

Wage subsidy

The 12 week wage subsidy applies to NZ businesses that are significantly affected by COVID-19, and the recent measures to control it. This includes:

Existing businesses
sole traders
self-employed
registered charities
non-government organisations
incorporated societies
New businesses less than a year old.

Are all employers eligible to apply?

Businesses must be registered and operating in New Zealand.
Employees must be legally working in New Zealand.
Your business must show a 30% decline in revenue over a month compared to the same period last year. For new businesses this would be a ‘similar period’.
The wage subsidy applies to employees who can no longer work, it is not for staff who can work from home.
You must make best efforts to retain employees and pay them a minimum of 80% of their normal income for the subsidised period.

How much is the subsidy?

Full Time employee (20 hours of more) - $585.80 per week
Part time employee (less than 20 hrs) - $350.00 per week

The payment will be made as a lump sum for a period covering 12 weeks per employee. Which equates to $7,029.60 for a full time employee and $4,200 for a part time employee.

The Government now has removed the cap of $150,000 per business. (If you have already applied you do not need to reapply).

The payment is exempt from GST exclusive for employers. However it is subject to the usual PAYE, Student Loan, KiwiSaver deductions for employees.

The subsidy is for wages only, to help keep staff employed and also aims to help ensure your business viability.

To apply you’ll need your IRD number, business number, name and address, the names of your employees, and your employer IRD numbers, contact details for your employees and your business.

These are tough times for businesses. Don’t do it on your own. We are here to help you navigate the coming months.

The adult minimum wage will increase $1.20 from $17.70 to $18.90 per hour on 1 April 2020.

The new rate equates to an extra $48 per week before tax for employees on a 40-hour working week.

The starting-out and training minimum wage rates will increase 96 cents from $14.16 to $15.12, and will remain at 80% of the adult rate.

All employees and employers should take note of the minimum wage changes, as it sets a new relative benchmark for pay negotiations.

Overall, the increase is estimated to boost wages paid in the New Zealand economy by $306 million a year. More than 240,000 workers will have a lift in their income. Key industries with significant numbers of affected employees include accommodation, food services and retail. Affected occupations include service, clerical and sales workers, plus machinery operators, drivers and labourers.