The Jobkeeper Scheme reimbursements have begun to
be paid for the month of April 2020. This equates to Fortnight 01 and
Fortnight 02 (see Jobkeeper Rules page). Monthly Declarations for the
reimbursement of these fortnights are open until the 31st May 2020.
There will be 13 fortnights for the duration of the Jobkeeper
Scheme. Single Touch Payroll is recommended to be utilised using the
correct Jobkeeper Codes. This will help mitigate any audits that the ATO
will conduct up to 5 years into the future. Yes, if you get it wrong and
were not eligible, you will be required to repay this money.
BACKGROUND ON JOBKEEPER PAYMENT
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020 to the 27th September 2020. This will incorporate 13 fortnights. Regardless of the wages payment period, the PAYMENT DATE is all that matters with respect to the JobKeeper Calendar.
Employers will be eligible for the subsidy if:
- their business has a turnover of less than $1 billion and their turnover has fallen by more than 30 per cent; or
- their business has a turnover of $1 billion or more and their turnover has fallen by more than 50 per cent; or
- you are a registered charity and your turnover has fallen by more than 15%; and
- the business is not subject to the Major Bank Levy.
To establish that a business has faced either a 15, 30 (or 50) per cent fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier. More detailed information on the 'TURNOVER TEST' is available on our JobKeeper Rules page.
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established or their turnover is typically highly variable) the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of the Coronavirus. More detailed information on the 'ALTERNATIVE TEST' is available on our JobKeeper Rules page.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business has ceased or significantly curtailed its operations). There will be some tolerance where employers, in good faith, estimate a greater than 30 (or 50) per cent fall in turnover but actually experience a slightly smaller fall. More detailed information on the 'ALTERNATIVE TEST' is available on our JobKeeper Rules page.
The employer must have been in an employment relationship with eligible employees as at 1 March 2020 (this essentially means that your employee MUST have been an employee on the 1st March 2020), and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments. Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments. You are also eligible as a Business Participant.
A Business Participant is a business without employees and will be eligible to receive one JobKeeper Payment, and businesses with employees can receive one payment in addition to the payments for their eligible employees. This means that:
- where the business operates through a sole trader structure – one owner can be nominated to receive the JobKeeper Payment;
- where the business operates through a partnership – one partner can be nominated to receive the JobKeeper Payment;
- where the business operates through a company – one director can be nominated to receive the JobKeeper Payment;
- where the business has shareholders who provide labour to the company and receive dividends in lieu of wages – one such shareholder can be nominated to receive the JobKeeper Payment; and
- where the business operates through a trust – one individual beneficiary (that is, not a corporate beneficiary) can be nominated to receive the JobKeeper Payment.
The nominated individual must be at least 16 years of age and an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) visa holder and a resident for Australian tax purposes on 1 March 2020. Payments will be made to the nominated individual monthly in arrears by the ATO.
OBLIGATIONS ON EMPLOYERS
To receive the JobKeeper Payment, employers must:
More information on the employer obligations are available on our JobKeeper Rules page.
- Enrol into the JobKeeper Scheme from the 20th April 2020. Enrolment will be done through the Business Portal, BAS Agent Portal or Tax Agent Portal only. Registering your interest does not mean you have registered to enrol.
- Let the ATO know about eligible employees. This means you don’t have to receive this for ALL of your employees. It will include information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
- For eligible employees earning over the $1,500 (before tax) amount, everything will remain the same.
- For eligible employees earning under the $1,500 (before tax) amount, you will need to ensure they receive at least $1,500 per fortnight (before tax). However, you only NEED to pay superannuation on the normal wage amount. You do not need to pay superannuation on the increased amount. You will need to make sure that your payroll software is set up correctly for this.
- Notify all eligible employees that they are receiving the JobKeeper Payment.
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
Eligible employees are employees who:
Adam is eligible to receive the JobKeeper Payment for each employee, which would have the following benefits for the business and its employees:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- are at least 16 years of age;
- are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder; and
- are not in receipt of a JobKeeper Payment from another employer. If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
Businesses with employees
Initially, employers can register their interest in applying for the JobKeeper Payment here
Subsequently, eligible employers will be able to apply for the scheme by means of an online application. This can be done from the 20th April 2020, via the Business, BAS Agent or Tax Agent Portals.
The first payment will be received by employers from the ATO in the first week of May.
Businesses without employees
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment here
Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments.
Payment will be made monthly to the individual’s bank account.
Employees will receive a notification from their employer that they are receiving the JobKeeper Payment.
The majority of employees will need to do nothing further. Employees in the following circumstances will have additional obligations.
- Employees that have multiple employers must notify the employer that is their primary employer. An employee cannot be registered for JobKeeper Payment by more than one employer.
- Employees that are not Australian citizens must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee.
- Employees that are currently in receipt of, or have applied for, an income support payment should advise Services Australia of their change in circumstances.
Okay, so let’s now look at three examples:
Employer with employees on different wages
Adam owns a real estate business with two employees. The business is still operating at this stage but Adam expects that turnover will decline by more than 30 per cent in in the coming months.
The employees are:
- Anne, who is a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues working for the business; and
- Nick, who is a permanent part-time employee on a salary of $1,000 per fortnight before tax and who continues working for the business.