THE JOBKEEPER PAYMENT
The JobKeeper Payment is a wage subsidy that will be paid to eligible businesses impacted by COVID-19.
Eligible employers will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee and/or for one eligible business participant (e.g. sole trader, partner, company director, shareholder, trust beneficiary).
The subsidy will be paid for a maximum of six months from 30 March 2020 to 27 September 2020 and the ATO will make these payments to employers in arrears each month with the first payment commencing in the first week of May 2020. JobKeeper payments can be backdated to the fortnight beginning 30 March 2020.
Employers must pay a minimum of $1,500 (before tax) to employees per fortnight to be able to claim the JobKeeper payment. If the employee has been receiving less than $1,500 (before tax), the employer must pay the employee a “top-up” payment to ensure the employee has been paid at least $1,500 per fortnight to be eligible to receive the JobKeeper Payment. The ATO has already exercised its discretion to allow employers to make the minimum payment for the first two fortnights by the end of April 2020. Going forward, the minimum payment will need to be strictly made by the end of the relevant fortnight.
Eligibility Criteria – Employers
An employer with an annual turnover is $1 billion or less, will be eligible if their projected GST turnover is estimated to fall by 30% or more.
It is up to businesses to self-assess the fall in turnover against three criteria:
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.
Please contact TSP for assistance in calculating your projected GST turnover.
Eligibility Criteria – Employees
An eligible employee is one who satisfies the following:
Currently employed by the employer (including those that have been stood down or re-hired) as at 1 March 2020
Employed on a full-time or part-time basis or is a long-term casual (more than 12 months as at 1 March 2020).
At least 16 years of age at 1 March 2020.
A resident of Australia for social security purposes or for tax purposes on 1 March 2020.
Not nominating to accept JobKeeper payment from another employer.
Not in receipt of government-funded parental leave or dad and partner pay nor are they fully supported by a workers compensation scheme.
Eligibility Criteria – Business Participant
Certain participants in a business who are not employees (such as a sole trader, partner in a partnership, director or shareholder of a company and beneficiary of a trust) may be eligible to receive the JobKeeper Payment.
The JobKeeper Payment is limited to only one Business Participant per business. For example, only one partner in a partnership of three can receive the JobKeeper Payment.
Further, a JobKeeper Payment can only be claimed by an eligible business in respect of the nominated eligible business participant where all of the relevant conditions are satisfied, some of which include:
The business meets the decline in turnover test
The business had an ABN on or before 12 March 2020
The relevant business participant was actively engaged in the business as at 1 March 2020
The participant is not entitled to another JobKeeper Payment
Enrol in the JobKeeper Payment Scheme
Employers must elect to participate in the JobKeeper Scheme via an application to the ATO and will be required to provide information to the ATO on all eligible employees. Employers will also be required to provide information to the ATO on a regular basis on the number of eligible employees and details of its turnover. We suggest that employers enrol before 26 April 2020 to ensure they are eligible for payments from the fortnight beginning 30 March 2020.
The ATO has announced that tax agents will be able to enrol for the JobKeeper Scheme on behalf of clients from 20 April 2020. If you would like us to enrol on behalf of your business or would like more information on the JobKeeper Payment, please contact TSP.
1. Determine if you meet the decline in turnover test. Has your income decreased by 30% or more and from when?
2. Determine who your eligible employees are. Send them a JobKeeper employee nomination form to advise them you intend to participate in the Scheme. Have the employee complete their part of the form to either agree or choose not to be part of the Scheme. Keep this form for five years.
3. Register for the JobKeeper Scheme from 20 April 2020 on either the Business Portal or have TSP register for you via their Tax Agent Portal. The ATO will use pre-populated information on employees via Single Touch Payroll. You will need to enter your business’s bank account details.
4. Pay the $1,500 to each eligible employee before the end of the fortnight to which the payment relates. Note the first two fortnights being 30 March to 12 April and 13 April to 26 April needs to be paid to employees by 30 April 2020.
Frequently Asked Questions
Do I have to meet the decline in turnover test on an ongoing basis?
No. Once it has been satisfied there is no requirement to retest.
Is the JobKeeper Payment from the ATO assessable income?
Yes it is and the payment to the employee is tax deductible.
Do I need to withhold PAYG withholding from the JobKeeper payment?
Do I need to pay superannuation guarantee on the JobKeeper payment?
Only on the hours the employee actually worked.
If an employee did not work then no superannuation guarantee needs to be paid.