A wage subsidy is a contribution through which a public source reimburses the employer for part of the total labour cost of a specific employee over a defined period. It is provided mainly for creating a new job, employing a disadvantaged jobseeker, maintaining employment during a fall in revenue, or for a job within a project funded from the funds. The amount depends on a percentage of the labour cost and on a cap linked to the average wage in the economy. A key condition is maintaining the job after the support ends, usually for the same length of time as the support period – early termination of the employment relationship means repaying a proportional part of the contribution. The subsidy must not be combined with another contribution for the same wage, which is the most common reason for reductions.
See also: Employment contribution from the Labour Office, Double Financing, Wage costs and timesheets.
