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Wage subsidy is not part of sales 01 May 2020

If you’ve received a wage subsidy, don’t treat it as being part of sales. 

It’s not taxable income and not subject to GST. You are required to forward the money on to the employee and deduct PAYE when you pay it.

When you pay wages to your staff the subsidy portion will not be tax deductible. We will adjust for this.

Although the wages subsidy received for employees is not taxable, it becomes taxable income for the self employed and will need to be included in their tax returns.

Similarly, a shareholder-employee not receiving a PAYE salary needs to treat the subsidy as taxable income.

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