Paying tax on wage subsidy income

Question

The wage subsidy is not taxable, will staff wages be deductible, or have to be proportioned to remove the non deductible part? Eg, staff weekly wage = $2,000 wages subsidy =585, so deductible = $2,000 - 585 ? How does this work? Please help.

Answer

From Work and Income: Your employee will need to pay tax on their wage subsidy payment as it’s paid to them as part of their normal wages. This means it's subject to the usual deductions, eg, PAYE, Student Loan, KiwiSaver, ACC, etc.

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