UPDATE - Legislation published for the new Employee Wage Subsidy Scheme

29 July 2020

The necessary legislation has now been published for the introduction of the new Employee Wage Subsidy Scheme which will operate from 1 July 2020 to 30 March 2021.  The EWSS is a much-simplified scheme in comparison to the Temporary Wage Subsidy Scheme (TWSS) which it replaces and will operate as a flat rate subsidy paid to the employer in respect of each qualifying employee.

Qualifying Employers

The qualifying condition for the EWSS is that the employer must demonstrate that they are operating at no more than 70% turnover for the period July to December 2020, compared to the same period last year. There is no requirement for t the employer to prove that they are unable to pay normal wages (which was a condition of the TWSS). Employers will be required to self-assess their eligibility at the outset, and on an ongoing basis at the end of each month of the qualifying period, to confirm that they continue to meet the conditions and must de-register if they do not expect to meet the qualifying conditions.

Qualifying Employees

The scheme applies to employees who were deemed ‘qualifying employees’ under the TWSS, as well as any employee who is on payroll of an eligible employer during the qualifying period (1 July 2020 to 30 March 2021). The EWSS therefore covers new hires and seasonal workers who were not eligible under the previous scheme.

Subsidy Rates

  • €151.50 per employee per week - where the employer pays the employee gross wages of at least €151.50 and not more than €202.99 per week
  • €203 per employee per week - where the employer pays the employee gross wages of not less than €203 per week and not more than €1,462 per week
  • If the wages paid are less than the floor amount of €151.50 per week or more than the ceiling of €1,462 per week, no subsidy is payable.

The subsidy will be paid to the employer – not the employee. It does not feature in payroll calculations and employees will be subject to PAYE on their wages in the ordinary way. 

PRSI Treatment

Qualified employers will be eligible for a reduced PRSI rate of 0.5% on wages paid to qualifying employees during the lifetime of the scheme. The employee contribution rate will be the normal 4% rate that would be applicable to employment earnings.

Commencement and transition from the TWSS

The commencement date for the EWSS is 1 July 2020. The two schemes will run in parallel until the TWSS expires on 31 August. Employers can avail of the EWSS for new hires from 1 July, however an employee who is already in the TWSS will not be eligible for the EWSS during that period and must remain on the TWSS.


The extension of the wage subsidy scheme to 31 March 2021, together with the inclusion of new hires and seasonal workers, is a welcome announcement which will provide a degree of certainty and clarity to businesses, especially in the hospitality, tourism and retail sectors. However, the qualifying requirement to have at least a 30% drop in turnover to the end of this year may be a barrier to entry for a number of businesses which may not meet this threshold, but which nonetheless are in need to assistance. The simplification of the scheme in comparison to its predecessor is also welcome and hopefully the excellent work done by the Revenue Commissioners in the roll out of the TWSS will ensure that claims for the new subsidy are processed and paid as promptly as before.