Employers now have more incentive to employ workers under 35! The JobMaker Hiring credit legislation has now been passed into law! This credit was part of the 2020-21 Budget, which will operate until 6 October 2022. It is designed to improve the prospects of young individuals getting employment following the devastating impact of COVID-19 on the labour market.
The scheme will be backdated to commence on 7 October 2020 and provide eligible employers with the following payments for up to 12 months for new jobs created for which they hire the following young workers:
• $200 a week for hiring a worker aged 16 to 29 for at least 20 hours a week and
• $100 a week for those aged 30 to 35.
Although the scheme is slated to run for just 12 months, that period is the hiring period – not the payment period. Eligible employers who hire an eligible employee as late as the last day of the scheme (6 October 2021), may be eligible for hiring credits for the subsequent 12 months until 6 October 2022.
As an employer, you will be deemed eligible for JobMaker if the following criteria are met:
- for the first 6 months of JobMaker, you have hired additional eligible employees (minimum of one additional employee). This is determined by a headcount as at 30 September 2020 and the payroll of the business for the reporting period, as compared to the three-months to 30 September 2020.
- have an ABN,
- are registered for PAYG withholding,
- are up-to-date with lodgement obligations for the previous 2 years (including BAS and income tax returns) and
- are reporting payroll through STP
You will not be deemed eligible if any of the following apply:
- you are claiming JobKeeper for your business,
- you have entities in liquidation or who have entered bankruptcy
- your entity is a commonwealth, state, and local government agency (and entities wholly owned by these agencies)
- you are subject to the major bank levy
- your business is a sovereign entity (except those who are resident Australian entities owned by a sovereign entity.
Employees will be eligible if they:
- commenced employment between 7 October 2020 and 6 October 2021
- were aged between 16 and 35 years at the time they commenced employment
- have worked an average of 20-hours a week for each whole week the individual was employed by the qualifying entity during the JobMaker period.
Additionally, the worker must have met the pre-employment condition which requires that for at least 28 of the 84 days (i.e. for 4 out of 12 weeks) immediately BEFORE the commencement of employment of the individual, the individual was receiving one of the following payments:
- parenting payment
- youth allowance (except if the individual was receiving this payment on the basis that they were undertaking full time study or was a new apprentice) or
- JobSeeker payment.
We note that the new worker must be in a genuine employment relationship. For example, ‘non-arms length’ employees will not be considered eligible employees. This includes family members of a family business, directors of a company and shareholders of a company.
A summary of the above can be downloaded here – this a nifty fact sheet from the ATO. Also from the ATO, is this useful JHC payment calculator. Further fact sheets and information can be found here on this ATO page.
If you have hired new employees from October 2020 or are planning to do so in the next 12 months and are interested in the JobMaker Hiring Credit program, please get in touch with us for further information and assistance.