Following the latest Covid-19 outbreak in Auckland, and the Government’s rapid response, today we received the following information from IRD about this wage subsidy.
On 8 February 2020 the Government announced a new COVID-19 Short-Term Absence Payment (STAP) to support employers and self-employed workers.
The STAP is available from 9 February 2020, through Work and Income, to employers for employees, and self-employed workers, who:
• need to miss work to stay at home while waiting on a COVID-19 test result, and
• cannot work from home.
The STAP is a one-off payment of $350.
GST is not payable on the STAP.
For self-employed workers the STAP is considered income, so must be included on their Individual income tax return – IR3.
For employers, any amount passed on to the employee is “excluded income”, so is not included as income or claimable as a deduction on their income tax return. The employee pays tax on the amount they receive. Any excess amount not passed on to an employee is taxable and must be included on the employer’s income tax return.
The STAP is paid on top of an employee’s normal salary or wage for the pay period it is received in, with PAYE and their other normal deductions (such as student loans and KiwiSaver) being made from the total payment.