# IT article on Covid payment tax bill for individuals



## Mouldy (26 Jun 2020)

The IT have a story regarding possible tax bills of up to €2.8k for Covid payment recipients. Yikes.









						Coronavirus: Over 1m workers may face tax bills of up to €2,800 at end of the year
					

Those in receipt of Covid-19 payments will face substantial bills, says Taxback.com




					www.irishtimes.com


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## Sconeandjam (27 Jun 2020)

As of this week many have seen in their payslip change from tax calcuatuion of ‘cumulative‘basis to ‘week one’ basis. Big difference in payslips. The Government are getting their tax on the covid19 wage subsidy now and sum extra before the next budget.


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## Laughahalla (28 Jun 2020)

This is a bit confusing, apologies in advance.. I thought the Covid subsidy was a benefit to employers to help them through tough times.

If an employee ends up paying tax at the end of the year because they received a top up covid subsidy to bring them to their normal net pay, does this mean that the employee is actually subsidizing their employer.  Would the employee receiving the top up subsidy be better off leaving that employer and going to a new employer who can pay their salary without the need for a subsidy?


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## peemac (28 Jun 2020)

All income is taxable except for some social welfare payments.

Unemployment benefit is taxable. 

The normal person with standard tax free allowances will not pay any taxes on the covid payment. 

However, as dsp and revenue systems are not linked in real time the tax free allowance will have built up and many will find they will get a tax rebate upon their first pay period back and pay lower than normal paye in the next couple of pay periods. 

It's the combination immediate rebate along with the difference between the amount of standard tax that you'd be paying and actually paying over the coming pay periods that will have to be repaid.

Someone who works for me was off for 10 weeks as her particular position was retail which was closed, she got about €450 more than normal in her 1st Fortnight pay back, possibly she won't be paying paye in the next couple of pay periods where normally it would be about €150, thus calculated as about €750 she'll be due to pay back.

So there's no extra tax, just that it is taxable income and your tax free allowance was still accumulating without taking account of the covid payment. 

Should be easy enough for any payroll person to calculate it.


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## Sconeandjam (28 Jun 2020)

Laughahalla said:


> This is a bit confusing, apologies in advance.. I thought the Covid subsidy was a benefit to employers to help them through tough times.
> 
> If an employee ends up paying tax at the end of the year because they received a top up covid subsidy to bring them to their normal net pay, does this mean that the employee is actually subsidizing their employer.  Would the employee receiving the top up subsidy be better off leaving that employer and going to a new employer who can pay their salary without the need for a subsidy?


You also have to remember the companies were facilitating the government. If all those companies affected let their staff go, all would arrive at the dole office and there could be a delay of 12weeks or so to get funds. Many companies would not re open. The companies continuing to pay the subsidy to the employee and it reduced administration for the Government. The companies can only avail of the subsidy if their sales/turnover is way done from previous months. Companies are experiencing large losses at this time.


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