Business goals


25th August, 2021

New wage subsidy: Is my business eligible?

With the Delta strain causing a new wave of lockdown restrictions in New Zealand, the government is once again offering business support in the form of a wage subsidy.

The country is once again in lockdown as of 17 August, and that means massive disruption for many businesses reliant on the regular trade that comes with freedom of movement.

To make up for the loss, the Ardern government has again announced a wage subsidy to help businesses make ends meet and ensure their staff get paid.

If your business has been impacted by the Alert Level 4 restrictions, you may be eligible for the wage subsidy. However, to determine this, you’ll need to be able to demonstrate a decline in revenue. That means having a clear picture of your cash flow on a week-by-week basis.

Calculating revenue decline for eligibility

If you’ve had at least a 40 percent decline in revenue between the 17 and 30 August inclusive (known as the revenue test period), compared to a typical two-week period in the six weeks prior to 17 August, you may be eligible for the wage subsidy.

Alternatively, if your business receives seasonable revenue (tourism businesses are a prime example), you have the option of demonstrating a decline of at least 40 percent over the revenue test period compared to the same two-week period in 2020, or 2019.

But be warned, calculations for eligibility must not include any payments made to you from this or other COVID-19 related government schemes, such as the Leave Support Scheme or the Small Business Cashflow Scheme.

Paying staff with the wage subsidy

While the wage subsidy is also available to the self-employed, Work and Income NZ (WINZ), stipulates several rules for how employers should use the support to maintain their obligations to staff. This includes paying at least 80 percent of each named employee’s ordinary wages or salary and paying out at least the full amount of the subsidy to each employee.

Where your named employee’s ordinary wages or salary as at 16 August 2021 are below the amount of the subsidy, employers pay the lower amount.

Evidencing your claims for the wage subsidy

In order to secure the subsidy, business owners must prepare evidence to support their claims. This amounts to having your business’s financial records in order.

If you have your ducks in a row, you will be able to demonstrate:

  • How your decline in revenue can be attributed to the move to Alert Level 4
  • Whether you have highly seasonal revenue which makes it difficult to use the standard comparison period

If you’re using an MYOB product for your accounting and payroll needs, you’re advised to use the reports function to access your Profit and Loss statements. However, to get the level of detail required, you may also need to contact your accountant to make sure you’ve got everything right.

The good news, if you’ve successfully applied for the wage subsidy, these payments will be clearly marked in your MYOB payroll solution. You can find details on how that works for the following products:

To find out more about the current wage subsidy scheme and how to apply, be sure to visit the WINZ website today.