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, and other applicable deductions, 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 wage subsidy received for employees is not taxable to the business, it is taxable income for the self-employed and will need to be included in your tax returns as applicable.
Similarly, a shareholder-employee not receiving a PAYE salary needs to treat the subsidy as taxable income.
We’ve put together a guide on how to treat wage subsidy payments. Learn more here.