Paying your staff the COVID-19 Resurgence Wage Subsidy

This subsidy has ended, but there's other support you can apply for.


The Resurgence Wage Subsidy was available from 21 August 2020 to 3 September 2020. It was for employers and self-employed people who would otherwise have had to lay off staff or reduce their hours due to COVID-19.

This payment is no longer available. Find out what other support we offer for businesses.

The Resurgence Wage Subsidy is to support you to pay 2 weeks of wages for your employees from the date you submitted your application.

You should pay your employee in accordance with their employment agreement.

If you can't pay their usual wages, you should try your hardest to pay them at least 80% of their usual wages. If that isn't possible, you should pay them at least the subsidy rate (ie, full-time or part-time).

In either case, their hours of work and hourly rate can only be changed with their agreement.

  • Usual wages are less than Resurgence Wage Subsidy

    If your employee's usual wages are less than the Resurgence Wage Subsidy, you must pay them their usual wages.

    Any difference should be used for the wages of other affected staff - the Resurgence Wage Subsidy is designed to keep your employees connected to you.

    If there are no other employees to use the subsidy for, then the remaining Resurgence Wage Subsidy must be paid back.

  • GST and tax


    Information about GST, PAYE/PAYG and income tax if you're a business.


    You don't have to pay GST on the Resurgence Subsidy Extension.


    Your employee will need to pay tax on their Resurgence Wage Subsidy payment as it's paid to them as part of their normal wages. This means it's subject to the usual employer deductions, eg, PAYE/PAYG, Student Loan, KiwiSaver, Child Support etc.

    When calculating PAYE/PAYG deductions, do not gross up the Resurgence Wage Subsidy component. PAYE/PAYG is deducted from the subsidy (i.e. $585.80 less PAYE/PAYG, etc).

    You can agree with your employee the frequency at which the Resurgence Wage Subsidy is paid. However, if it's being paid outside of their usual pay cycle this might have adverse tax implications for your employees such as:

    • they may be taxed at the wrong rate
    • it may impact Working for Families entitlements.

    Income tax

    For most businesses, the Resurgence Wage Subsidy is classified as "excluded income" for income tax purposes. This means that as a business you don't pay income tax on the Resurgence Wage Subsidy you receive from MSD. You don't get an income tax deduction for the wages you pay using the Resurgence Wage Subsidy. You still need to make the usual PAYE/PAYG deductions when you pass it onto your employee.


    If you're self-employed, you need to pay income tax on the COVID-19 Resurgence Wage Subsidy you receive, as it's a payment to replace a loss of earnings.

    More information

    For further information on tax queries, visit the Inland Revenue website.

    For information on your obligations under employment law, contact Employment NZ on 0800 20 90 20 or visit their website.

    For example, you might have questions about:

    • employer contributions to KiwiSaver
    • holiday pay
    • annual leave.
  • Employee receives ACC

    If you apply for the Resurgence Wage Subsidy, you can't include any employees in your application who are on ACC earnings related compensation.

    If you're receiving the Resurgence Wage Subsidy for an employee and they get injured and start to receive ACC, the employee will continue to get paid as normal (including any Resurgence Wage Subsidy). The employees' wages will need to be declared to ACC and be deducted off their ACC payment.

    If an employee was on ACC and then returns to work during the Resurgence Wage Subsidy period (and they're now no longer receiving ACC), you can apply for the Resurgence Wage Subsidy for them, as long as they meet the criteria.