What Countries are going for payroll in Europe

Governments in mainland Europe have deployed a mixture of tax moratoriums, payment extensions on social charges, loan guarantees and wage subsidies for workers who cannot work or move to part-time roles. In global payroll some cases mechanisms are still in the process of being worked out.

Sweden has said it will heavily subsidise workers’ salaries so that they will still receive 90% of their pay while working reduced hours. Alongside this businesses have been allowed to defer tax payments for up to a year at a cost of €27.5bn to the country’s treasury, equivalent to 6% of gross domestic product. 

Denmark has announced similar measures; it is subsidising 75% of salaries for firms promising not to lay-off staff.

The European Commission set up a €37bn regional funding scheme to combat the epidemic. Importantly it has said it will grant EU countries full flexibility to diverge from its fiscal rules to pump state money to where it is needed.

In terms of income subsidies for affected workers, so far Germany, France, Italy and Spain are setting up schemes, although details of the mechanisms of many programmes are still to be decided.

In Germany a Kurzarbeitergeld compensation scheme has been established as it was in 2008 when the wages of about 1.5 million Germans were subsidised, successfully preventing a surge in unemployment – at a cost to the taxpayer of €8bn, according to Deutsche Bank.

In France, president Emmanuel Macron has promised unlimited budgetary support for companies and workers that will cost about €45bn. He promised an “exceptional and massive” mechanism to pay workers temporarily laid-off during the crisis and sick leave payments to parents who were not ill but had to stay at home to look after their children because of school closures.

In Spain, prime minister Pedro Sánchez has announced a moratorium on mortgage repayments and utility bills for people whose income has been hit. He also issued a decree making it easier for firms to temporarily suspend, as opposed to lay-off workers while their benefits would be retained.

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