Over a million full-time workers who were on the Temporary Wage Subsidy Scheme or received the Pandemic Unemployment Payment may be hit with tax bills of up to €3,000 at Christmas.
The warning comes as recent figures revealed that 57% of people were unaware of the potential future tax liability.
The hefty end of the year tax bill is likely to come as a “major shock”, experts at Taxback.com have said, Dublin Live reports.
They could face tax bills of between €150 and almost €3,000 at year end.
Over one million people availed of the Irish Covid-19 wage schemes including over 551,800 employees who were paid by the TWSS, and 517,600 workers who received the PUP since their introduction in March.
Experts warned that employees earning above €20,000 with no income top-up will see their net incomes drop during the 23 weeks by €1,000 up to €22,000 or more.
Meanwhile employees with an income top-up from their employers won’t suffer a net income drop in 2020 unless their income is over €44,000 but will face a tax bill of between €300 and €2,829 at year end depending on their income.
As for those who availed of the pandemic payment, workers that had been on incomes over €20,000 will generally suffer significant net income drops in 2020 and will also face tax bill of up to €2,494 at year end.
Marian Ryan, Consumer Tax Manager with Taxback.com: “When assessing the impact, we were mindful of the immediacy with which the Government had to roll out the scheme, so anomalies were to be expected.
#”The issue, however, is that thousands of employees appear to be completely unaware of what is coming down the tracks.
“The scheme was rolled out in good faith to see employers through the instability of COVID-19 – and to ensure they emerge from the downturn – but a byproduct of its expediency could see less money in the pockets of employees in 2021 and possibly 2022 depending on how the tax burden is spread.”
