To help employers retain and/or re-engage their staff during the COVID-19 pandemic, the government has introduced a new payment known now as JobKeeper. The fortnightly payments will be made directly to employers and will be for $1,500 before tax for each eligible employee for up to 6 months. Below is a summary of facts about this new payment. For those wanting further, more detailed information, it is recommended that you go to the Government Treasury website where you can also download several fact sheets. The ATO also have a good reference page to visit.
WHICH EMPLOYERS ARE ELIGIBLE?
- Employers in a business with an aggregated turnover of less than $1B and who can demonstrate a reduction in turnover of more than 30% this year compared to last year*
- Employers in a business with an aggregated turnover of $1B or more and who can demonstrate a reduction in turnover of of more than 50% this year compared to last year*
- Employers in most business structures including companies, trusts, partnerships, sole traders and not-for-profits and charities
- Self-employed individuals (except those subject to bankruptcy)
- Employers whose businesses are not subject to a Major Bank Levy or are in liquidation
- One partner in a partnership can be nominated
- One individual trust beneficiary can be nominated (in a group of beneficiaries)
- One director of a company can be nominated
*Proving reduction of turnover will be this year in the month you apply compared to last year, or this year in the quarter you apply compared to last year. This will be based on whether your BAS is lodged monthly or quarterly. The ATO will be able to look at specific circumstances where your situation does not fit into the above criteria and apply their discretion. In this case, they offer alternative tests to apply. The turnover test is based on GST turnover but you don’t have to be registered for GST to apply the test.
WHICH EMPLOYEES ARE ELIGIBLE?
Employees who were on the books as at 1 March 2020 including those who are/were:
- Full time
- Part time
- Long-term casuals (must have been with their employer for at least 12 months as at 1 March 2020)
- Stood down prior to the beginning of this measure
- Stood down and then re-engaged by their employer
- Not receiving JobKeeper payment from any other employer
- Aged 18 and above as at 1 March 2020 (if you were 16 or 17 you can also qualify for fortnights before 11 May 2020 and continue to qualify after that if you are independent or not undertaking full time study)
- Australian Citizens, holders of a permanent visa or a special category (subclass 444) Visa holder at 1 March 2020
- Residents for Australian tax purposes on 1 March 2020
- Note, those on full worker compensation payments ARE NOT eligible
WHEN WILL THE PAYMENTS BEGIN?
This measure begins on 30 March 2020 and the first payments will be sent in the first week of May 2020. They will be made monthly in arrears, backdated from 30 March 2020 for a maximum of 6 months, ending on 27th September 2020.
HOW WILL JOBKEEPER PAYMENTS AFFECT MY PAYROLL?
- You must advise your employees that they will receive JobKeeper payments and also advise those who may have applied to Services Australia (Centrelink) for income support to contact Centrelink and let them know about the changed arrangements
- You must request each employee complete a nomination form. This form is for your records only and does not need to be returned to ATO
- Payments to employees must be made in the first full payrun after 30 March 2020 – this may be weekly, fortnightly or monthly
- Stood down employees can be back paid from 30 March 2020
- Each employee must receive a minimum of $1,500 before tax per fortnight regardless if their wage prior to the JobKeeper scheme was less than $1,500. This must be done in order to receive the payments.
- Employees who were receiving more than $1,500 gross per fortnight will continue to receive the same wages
- JobKeeper payments are paid via your normal payroll systems and you may need to set up extra pay items to include these payments (ask your bookkeeper or tax professional to assist you here if necessary)
- Set up for Xero Payroll
- Set up for QBO Payroll
- Set up for MYOB Payroll
- Set up for Saasu Payroll
- As these payments are made via your payroll system, you will also report them to the ATO via STP
- JobKeeper payments are included on End of Year Income Statements
- JobKeeper payments are not ordinary time earnings for superannuation purposes so do not apply the super guarantee to them
- If employees are on paid leave, you can receive JobKeeper payments for them
- Employees on unpaid leave will be eligible once they return to work
- Leave entitlements only accrue on hours worked. The JobKeeper top up component of a wage to $1,500 does not accrue leave. Employees who have been stood down but are in receipt of JobKeeper payments, will accrue leave entitlements on those payments
- You will need to report to the ATO on a monthly basis about your continued eligibility and that of your employees. You will report the number of eligible employees, provide your current and projected GST turnover and re-confirm your contact and bank details for payment
HOW DO I APPLY?
To enrol for JobKeeper payments log into your Business Portal via your myGov account. Select “manage employees” then the link you see for JobKeeper payment. Complete the form. See more details here. Your Tax or BAS Agent can also enrol your business for you on your behalf.