Amount a business must pay an employee
The amount the business (including self-employed people) must pay an employee, depends on whether the employee's ordinary or average wages or salary are under, or over the COVID-19 Leave Support Scheme rate applied for them, and any obligations they have under employment law.
To meet the obligations of the COVID-19 Leave Support Scheme, a business must pay at least the subsidy rate, when the employee's ordinary or agreed average wages or salary is more than the rate of subsidy paid to the business for them.
An employee who earns less than the subsidy paid to the business for them must be paid their ordinary or average wages or salary.
Note this does not affect the obligations a business has under employment law.
Calculating employees' pay
Step 1 - Calculate pay based on actual hours
Calculate the employee's pay based on the actual number of hours in their employment agreement.
Actual hours x hourly rate | Amount A = $ |
Step 2 - Calculate pay based on average hours
Calculate the employee's pay based on the agreed average number of hours the employee has worked each week.
Average hours x hourly rate | Amount B = $ |
Step 3 - Compare actual and average pay
Compare the employee's pay based on the number of hours in their employment agreement (Amount A) against their pay based on the agreed average hours (Amount B) to identify the higher amount.
Actual hours x hourly rate | Average hours x hourly rate |
Amount A = $ | Amount B = $ |
Step 4 - Compare actual or average pay against subsidy rate
The higher amount from Step 3, either Amount A or Amount B, is compared against the amount of the COVID-19 Leave Support Scheme paid to the business for the employee to identify the lower amount.
Step 5 - Calculate the amount of subsidy to be paid
If the employee's pay based on either actual or agreed hours (whichever is applicable) is lower than the subsidy rate paid to the business for them, this is the amount the business must pay their employee.
The business must use the remaining subsidy amount to pay other employees' wages or the business must repay this amount to the Ministry of Social Development if they have no other employees.
If the employee's pay is equal to or higher than the subsidy rate paid to the business for them, the business must pay the full amount of the subsidy to their employee.
