While wage subsidy material available online is directed to businesses of all sizes and shapes, they're especially relevant for startups during this uncertain time. It’s designed to support businesses across NZ so that they have the best chance possible to survive.
To be eligible, you need to be able to show a 30% drop in revenue. This fall in revenue must be attributable to Covid-19, and can be showcased as an actual drop to the previous month or even as a predicted drop based on a budget approved by a startup board.
How can you prove this?
You don’t have to actually have to prove your eligibility when applying for the wage subsidy. Although, you do want to ensure that you can have ample proof when an audit is conducted.
Right now, the government is operating on a high trust model. Their primary focus is getting money out to businesses and employees to protect New Zealand’s economy. An appropriate audit process will follow, so transparency is key. It’s important to remember this is not free money and trying to work around the system will hurt everyone in the long run, you most of all.
For transparency’s sake, once you have applied for the wage subsidy, set that money aside in a separate bank account so that you can account for it and trace its use.
The best resource we have found online for startups is one that was prepared for startups by the Angel Association of New Zealand and AVID Legal. They have extensive comments and advice on how the COVID-19 package applies to startups. It covers wage subsidies, leave and self-isolation payments, how to apply, tax implications, and governance considerations. Check it out here.