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Covid-19 wage supplement: SSC and FSS

The Office of the CfR has published guidance on the implications of the wage supplement on Payroll and SSC reporting.


In summary, the guidance clarifies that:

  • The wage supplement (€800 or less according to eligibility) will replace the normal wages of the employee and is therefore taxable in the hands of the employee.
  • For Payroll purposes the amount of the supplement will be added to any income received by the employee during the pay period.
  • Tax and social security contributions (including Maternity Contribution) will be calculated according to the standard method.
  • The employer must record receiving the wage supplement and paying this gross to employee so payroll requires no changes.

The wage supplement paid to employers will not be treated as income of the employer for Income Tax purposes, hence is not taxable nor tax deductible in the hands of the employer.


Social Security Contributions

In summary, the guidance clarifies that:

  • Upon transfer of the wage supplement to the employer, the Government will retain 10% SSC which will in effect constitute a ‘prepayment’ of the employee’s share of SSC;
  • The employer will then calculate what is due in totality to CFR i.e. the employer’s and employee’s share (Maternity Contribution and taxes) and deduct from that total amount the amount of SSC retained by CFR as a prepayment.
  • The total due to CFR less the SSC retained when the wage supplement was paid, will be shown in box D5 on the Form FS5.

FS3/FS7 Reporting

  • Employers will report the wages supplement paid to employees in the normal FS3 forms.
  • FS7 will be modified to show the amounts paid to employers and the SSC withheld from the wage supplement.