Over the Easter weekend, the finishing touches were released for the government’s JobKeeper payment scheme. The COVID-19 pandemic has wreaked havoc on the Australian economy so this $130 billion relief package can’t come soon enough.
Through the JobKeeper payment scheme, the government will make fortnightly payments of $1,500 to employers, to be passed on to eligible employees. These payments will apply from 30 March and will run through to 27 September 2020 (a period of 26 weeks).
Will My Business be Eligible for JobKeeper Payments?
All employers will be eligible for the subsidy if, at the time of submitting their application, their business has:
- an aggregated turnover of less than $1 billion (for income tax purposes) and they estimate their GST turnover has fallen or will likely fall by 30 per cent or more
- an aggregated turnover of $1 billion or more (for income tax purposes) and they estimate their GST turnover has fallen or will likely fall by 50 per cent or more
- is not subject to the Major Bank Levy.
To be eligible, employees must have been engaged at the business as at 1 March 2020. Furthermore, a business must confirm ongoing employment with each eligible employee.
Self-employed individuals will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test outlined above and are not a permanent employee of another employer.
Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) will be eligible to receive the JobKeeper payments if they estimate their GST turnover has fallen, or will likely fall, by 15 per cent or more relative to a comparable period.
How Will Reduced Business Turnover be Determined?
In order to prove eligibility, an employer will have to prove that their business has suffered a decline in its projected turnover in comparison to a corresponding period a year earlier. The periods used for assessment are:
- A calendar month (any of April to September 2020
- In a quarter (starting 1 April to 1 July 2020)
Turnover is measured based on GST turnover which is reported in the Business Activity Statement. As such, this includes all taxable supplies and GST-free supplies (but not input taxed supplies).
Businesses who are not registered for GST (e.g. due to GST turnover being less than $75,000) do not lodge a BAS. Although they may lodge an instalment activity statement (IAS), there is no disclosure of turnover. The Commissioner may state that the turnover test is to be satisfied in some other way.
How Do I Get the JobSeeker Payment and How Often Will Payments be Made?
Once your business has been deemed eligible, payments will be made directly into employer’s bank accounts. The ATO is issuing the first payments in May. The government is backdating these payments to 30 March.
Employers will receive payments, in arrears, on a monthly basis.
Which of My Employees are Eligible to Receive JobKeeper Payments?
Employees in your employment on 1 March 2020 and continue to be employed by you while you’re claiming JobKeeper, are eligible for the scheme.
An eligible employee is an employee who is/was:
- currently employed by the eligible employer (including those stood down or re-hired)
- a full-time or part-time employee, or a casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020
- a permanent employee of the employer, or if a casual employee, not a permanent employee of any other employer
- aged 16 years or older at 1 March 2020
- an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020
- a resident for Australian tax purposes on 1 March 2020
- is not in receipt of a JobKeeper Payment from another employer.
In order to receive the JobKeeper payment, you must pay $1,500 per fortnight (before tax) to each eligible employee. Using your existing payroll system, pay employees as normal. Single Touch Payroll will then report to the ATO. Even if you don’t use Single Touch Payroll to report, you can still claim the JobKeeper payment, there is be a manual claim process in place.
How Do I Pay My Employees?
There are three scenarios consider when making JobKeeper payments to your eligible employees:
Scenario A: Eligible Employee Earnings are more than $1,500 per Fortnight Before Tax
If an eligible employee is paid more than $1,500 a fortnight before tax, you will be required to pay them the full amount. Businesses are reimbursed $1,500 per fortnight for each employee.
Scenario B: Eligible Employee Earnings are less than $1,500 Per Fortnight Before Tax
To be able to claim the JobKeeper payment for an eligible employee, that employee must be paid a minimum of $1,500 income per fortnight. Employers must make a ‘Top-Up’ payment to any eligible employee o has not received the full $1,500 per fortnight. Employers are obligated to make and report this payment. You will be reimbursed $1,500 per fortnight for each eligible employee once this has been reported. Employers cannot pay their employees less than $1,500 per fortnight and remain entitled to a payment for that employee.
Scenario C: Eligible Employee is Not Working Due to a Stand Down Period
If an employee has been stood down, they will be entitled to the full JobKeeper Payment amount of $1,500 per fortnight (as they are not being paid during stand down).
My Employee Has Left my Business
If an employee ceases employment with your business, the ATO must be notified as soon as possible to cease payments for that employee. You may need to refund money to the ATO if overpaid.
Will I Need to Report Anything to the ATO?
The ATO is requiring that all businesses eligible for the JobKeeper scheme report on a monthly basis. This is to reconfirm the eligibility of your business and your reported eligible employees.
Each month you must:
- Ensure you have paid your eligible employees at least $1,500 per eligible employee per fortnight.
- Log in to the Business Portal to:
- review the number of eligible employees for each JobKeeper fortnight
- update your eligible employees if any of your eligible employees change or leave your employment
- provide your current and projected GST turnover
- re-confirm your contact and bank details for payment.
You or your registered tax or BAS agent can make the business monthly declaration.
ATO JobKeeper Informaton and Resources
- Enrol for the JobKeeper Payments
- Sole Traders and Other Entities
- Treasury JobKeeper – FAQ