Are you aware of the new Government JobKeeper Payments and how they affect you and your business, or you as an employee?
What is the JobKeeper Payment?
- Businesses impacted by COVID-19 may be eligible to access a subsidy to assist with paying employees. The Government will provide a fortnightly payment of $1,500 per eligible employee, commencing 30 March 2020 until 27 September 2020, with first payments being made in May 2020.
- For employees, this means they can keep their job and earn an income – even if their hours have been cut.
- Self-employed individuals will be eligible to receive the JobKeeper Payment where they meet the relevant requirements and are not a permanent employee of another employer.
Am I eligible for the JobKeeper Payment?
Employers will be eligible for the JobKeeper payment if the following applies:
- On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
- You employed at least one eligible employee on 1 March 2020.
- Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
- Your business in a relevant period has had, or is likely to have, a:
- 30% fall in turnover (for an aggregated turnover of $1 billion or less)
- 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
- 15% fall in turnover (for ACNC-registered charities other than universities and schools).
Sole traders are eligible for the JobKeeper payment if their business has experienced a downturn according to the eligibility criteria. Further information will soon become available.
Business Owners actively engaged in their business
Other businesses in the form of a company, trust or partnership can also qualify for JobKeeper payments where a business owner (a shareholder, adult beneficiary or partner) is actively engaged in the business, or a director is actively engaged in the business. This is limited to one entitlement for each entity even if there are multiple business owners or participants. Further information will soon become available.
Your employer will notify you if they intend to claim the JobKeeper fortnightly payment of $1,500 on your behalf.
How to calculate a fall in turnover for the first fortnight starting 30 March 2020
To work out your fall in turnover, you can compare either:
- GST turnover for March 2020 with GST turnover for March 2019.
- projected GST turnover for April 2020 with GST turnover for April 2019.
- projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.
How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, though you can do that if it is easier. The turnover calculation is based on GST turnover, but there are some modifications, including disregarding GST grouping (where two or more associated business entities operate as a single GST group). The ATO will provide further information regarding the turnover test soon.
If you qualify for JobKeeper Payments because your turnover for the first fortnight has declined by the relevant amount, you remain eligible and do not need to keep testing turnover in following months. However, you will have ongoing monthly reporting requirements.
When turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year), the ATO is in the process of developing an “alternative income test” to assist those businesses.
Testing the decline in turnover is done on an individual employer entity basis.
How do I work out which of my Employees are eligible?
You will only be able to claim the JobKeeper payment for eligible employees that were in your employment on 1 March 2020 and continue to be employed while you are claiming the JobKeeper payment.
An eligible employee is an employee who:
- is employed by you (including those stood down or re-hired)
- is either a:
- permanent full-time or part-time employee at 1 March 2020
- long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer
- agrees to be nominated by you
- is at least 16 years of age on 1 March 2020
- is an Australian resident as at 1 March 2020 within the meaning of the Social Security Act 1991, which requires that they reside in Australia and are an Australian citizen, the holder of a permanent visa, or a Protected Special Category Visa Holder. Your employee can also be an Australian tax resident who is a Special Category (Subclass 444) Visa Holder. Employees who are not permanent residents of Australia must notify you of their visa status to allow you to determine if they are eligible.
- Is not in receipt of any of these payments during the JobKeeper fortnight:
- government parental leave or Dad and partner pay
- a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work
Casual employees are not eligible unless they were employed by you on a regular and systematic basis for at least 12 months as at 1 March 2020.
How do I make payments to employees?
- You must pay your eligible employees a minimum of $1,500 before tax per fortnight in line with your existing pay cycle through your existing payroll system and report to the ATO via Single Touch Payroll – this will support the online claim process when it is available.
- If you do not report through Single Touch Payroll, you can still claim the JobKeeper payment; however, there will be a manual claim process, so registering and using Single Touch Payroll will speed up the process.
- You should pay your employees for each JobKeeper fortnight you plan to claim for. The first fortnight is from 30 March to 12 April and each JobKeeper fortnight follows that.
- For the first two fortnights (30 March to 12 April and 13 April to 26 April), the ATO will accept the minimum $1,500 payment for each fortnight paid by you, even if it has been paid late, provided it is paid by you by the end of April.
- This means that you can make two fortnightly payments of at least $1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April.
- If you pay your employees on an alternative pay cycle the payment can be allocated between fortnights, for example, if you pay your employees on a monthly pay cycle, your employees must have received the monthly equivalent of $1,500 per fortnight.
Do I have to pay my employees before claiming the subsidy?
- Yes – you should pay your employees for each JobKeeper fortnight you plan to claim for.
- To claim the JobKeeper Payment for April, you must pay eligible employees before the end of April.
How does the subsidy impact current employment agreements?
- Employees paid less than $1,500 per fortnight will be paid $1,500 (i.e. if they are paid $1,000, they will get a $500 top up).
- Employees paid greater than $1,500 per fortnight, should continue to be paid their regular salary or wages. Any amount paid above $1,500 per fortnight is not subsidised by the JobKeeper payment.
- The Fair Work Act has been updated to allow business to reduce employee’s hours, job role & responsibilities. Please note that while you can reduce their hours you cannot reduce their hourly rate.
- All entitlements and superannuation will be accrued on remuneration for actual work incurred. (i.e. if you work for $1,000 per fortnight then get a top up, you will accrue super and leave on the $1,000)
If I have stood down my employees without pay after 1 March 2020, can I ‘backpay’ them to 30 March 2020?
- Yes – Employees who have been stood down from work under the Fair Work Act 2009 without pay may still be eligible for the JobKeeper Payment, if they were in your employment and met the eligibility criteria on 1 March 2020.
- To receive the JobKeeper payment, you will need to have paid them at least the minimum amount of $1,500 for each fortnight you claim for.
If I terminated my employee after 1 March 2020, can I re-engage them and claim the JobKeeper Payment for that employee?
- Yes – so long as the employee and employer mutually agree for the employee to be re-hired and they wish to participate in the JobKeeper scheme.
- The employer will need to start paying the employee a minimum of $1,500 (before tax) for each fortnight they are employed and the employer claims for.
- You will only be paid a JobKeeper payment for employees from the fortnight they were re-engaged. You cannot claim retrospectively for employees you re-engage.
How do I apply for the JobKeeper scheme?
Eligible participants can enrol with the ATO for the JobKeeper payment from 20 April 2020.
We will provide further information once enrolment opens, however for now, please follow the below steps in preparation:
- Employers can register their interest on the ATO website here. Once registered, you will receive updates and information from the ATO about how and when to claim the JobKeeper payment.
- Check that you and your employees meet the eligibility requirements.
- Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).
- Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming the JobKeeper payment through another employer or have been nominated through another business.
- You must enrol with the ATO for the JobKeeper payment before the end of April 2020 to claim JobKeeper payments for April.
- Before you enrol for the JobKeeper Payment, you will need to complete the JobKeeper employee nomination notice here. The notice does not need to be submitted to the ATO, however; it should be kept as a record by you and/ or your registered tax agent.
Once enrolment becomes available on 20 April 2020, you or a registered tax agent can apply for the JobKeeper payment for your eligible employees.
JobKeeper – How Does it Work & Practical Applications
We will be hosting a Webinar at 12:00pm on 21 April 2020, explaining the practical applications of the JobKeeper Payment Program and how this affects you during this challenging time.
We will cover off:
- Application Process
- Meeting the Turnover Test
- Paying Employees
- Making Claims
If you would like to see if you are eligible, you can fill out our quick survey here.
We will provide further updates as we receive them from the ATO.
We thank everyone for their correspondence and patience whilst we await further updates from the ATO. Please do not hesitate to reach out if you need clarification regarding the JobKeeper Payment scheme or Government Stimulus Packages. We are always happy to assist by answering any questions you may have.
P: 1300 707 766