JobKeeper 2.0 – Determining Tier 1 or 2

JobKeeper 2.0 will see the introduction of two tiers of payment in both extension 1 & 2. The higher of the two payments, tier 1, will be for employees who worked 80 hours or more in the 4 weeks of pay periods before 1 March 2020 or 1 July 2020. Employees working less than 80 hours in the above periods, will receive the lower payment i.e. tier 2.

What is included in tier 1 payments?

Tier 1 fortnightly payments of $1,200 (extension 1) and $1,000 (extension 2) include the following aspects:

  • For employees who performed 80 hours or more of work in the above periods (one or the other).
  • Calculating the hours can include actual hours worked, hours for paid leave (annual, long service, sick, carers and other paid leave) and hours paid for public holidays.
  • The calculation of hours relates to the end of the last pay cycle in the period, not the pay date. For example if the pay cycle ends on 28th June 2020 but payment was not processed until 7th July 2020, then you would include the pay cycle to 28th June and look backwards for 28 days.

What is included in tier 2 payments?

Tier 2 fortnightly payments of $750 (extension 1) and $650 (extension 2) include the following aspects:

  • The same reference periods as for tier 1 but less than 80 hours worked per employee.
  • The same calculation of hours as for tier 1.

What about eligible business participants (EBPs)?

  • The reference period for EBPs will be all of February 2020 i.e. the entire 29 days (being a leap year).
  • The two-payment tiers apply.
  • Eligibility will be based on an assessment of hours spent actively engaged in the business during Feb 2020. A declaration will need to be submitted but is not yet available at the date of this blog – it may end up being a written and signed statement. Records that may substantiate the hours worked by the EBP can include: diaries, appointment books, log books, hours billed or invoiced, invoices issued, time sheets and/or records prepared for other business or statutory purposes.

What else do we need to know?

  • Employers will need to nominate which tier their employees are on in order to qualify for payments. This will be done via STP in the accounting software during a payrun, prior to the start of JobKeeper 2.0 i.e. 28 September 2020. Eligible business participants can notify their tier choice via the business portal or ask their tax professional to do this for them.
  • Employers will need to advise their employees which tier they qualify for within 7 days of the STP submission.
  • There are alternative tests available regarding the reference period as above to help employers work out which tier applies to their staff. Alternative tests are also be available for EBPs.
  • The ATO has extended the wage condition date for October to October 31 2020. This means that employers will have until 31 October to ensure they have paid their staff correctly depending on which payment tier applies.
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JobKeeper 2.0

The JobKeeper program will be extended to 28 March 2021 for eligible businesses. JobKeeper 2.0 will be split into 2 extension periods being quarter 2 and quarter 3 of the 2020-21 financial year. Businesses will need to prove their decline in turnover again, even if they are currently receiving the payments as part of JobKeeper 1.0. The reference date for assessing employee eligibility has moved to 1 July 2020. The payment amount for each extension will be reduced and will reference two tiers depending on the number of hours employees worked in 2 relevant periods. Read on to learn about the specific details of each extension period.

JobKeeper 2.0 Extension 1

Extension period 1 will be from 28 September 2020 to 3 January 2021. Businesses and not-for-profits seeking to claim JobKeeper will need to establish that they endured a decline in turnover for the July to September 2020 period as compared to the same period last year (basic test). The decline calculation will be based on actual GST turnover* and will be the same method used for BAS lodgement i.e. cash or accruals (non-GST registered businesses can choose cash or accruals reporting). The percentages used for turnover will remain the same as per JobKeeper 1.0. There are alternative tests available to assist you in determining turnover decline should you fail the basic test. You can test for a:

Working through the alternative tests is quite an onerous task and is not for the faint-hearted! We have found a great test calculator via MCA Accountants’ website and we thank them for their contribution in assisting small business to navigate their way around the JobKeeper maze!

If you are receiving JobKeeper payments from JobKeeper 1.0, you will not need to re-enrol or ask employees to provide a new nomination declaration (but new employees will need to provide one). Furthermore, the ATO will allow you to satisfy the wage condition for October 2020 as late as 31 October 2020, given the time constraints for businesses needing to assess their eligibility post the end of the September 2020 quarter.

Payment rates for extension period 1 will be reduced from that of JobKeeper 1.0. For employees who worked 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, the payment will be $1,200 per employee, per fortnight. For those working less than 80 hours during the periods as above, the payment will be $750 per fortnight. This will also apply to sole traders and other eligible business participants (EBPs), however, it should be noted that EBPs will only need to prove the working hours test for the period of February, so not June as well. EPBs will need to provide a declaration stating the hours they worked during February 2020. This declaration is not yet available via the ATO. There are also alternative tests available to prove employee working hours.

JobKeeper 2.0 Extension 2

Extension period 2 will be from 4 January 2021 to 28 March 2021. To be eligible for this extension period, you must prove that your business or not-for-profit suffered an actual decline in GST turnover* for the period October to December 2020 as compared to the same period last year.

Payment rates for extension period 2 will be reduced from that of extension period 1. For employees who worked 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, the payment will be $1,000 per employee, per fortnight. For those working less than 80 hours during the periods as above, the payment will be $650 per fortnight. This also applies to sole traders and other business participants.

Employers and EBPs will need to nominate which payment tier applies to their employees or themselves prior to the start of JobKeeper 2.0. At the time of writing this blog, it is believed that this action will occur via STP in your accounting software.

The JobKeeper 2.0 program will continue to require the lodgement of a monthly report to the ATO to ensure and trigger receipt of payments. The report will require that you advise of your quarterly turnover and it is expected that the 2019 figures will be prefilled into the report. That being the case, if you haven’t yet lodged your 2019 Sept or Dec BAS’s, you should get your skates on and do this immediately to avoid payment delays. It should be noted that the ATO will review the figure you input into the monthly report for the September 2020 quarter against that of your actual lodged BAS – they will be watching and checking! Your previous monthly turnover figures will also need to be reported. It is unknown at the time of writing this blog whether you will need to provide a projected figure for the following month as you do currently.

*Note, the sale of business assets is included in the current GST turnover for the purposes of JobKeeper 2.0. This has changed from JobKeeper 1.0.

Employee Eligibility

For JobKeeper 2.0, the following eligiblity criteria apply:

  • must be employed by an eligible employer (even if stood down or re-hired)
  • be full or part time or if casual, be employed on a regular and systematic basis for at least 12 months as at 1 July 2020.
  • be 18 years old at 1 July 2020 (if 16 or 17, may qualify if dependent or not undertaking full time study)
  • is an Australian resident
  • is not receiving parental leave or Dad and Partner pay
  • is not receiving Australian worker compensation payments due to being incapable of working.
  • is in receipt of JobKeeper from only one employer
  • if self-employed, meets the turnover test for the relevant period and is not employed by another employer.

Download the fact sheet from the Treasury website for more details about JobKeeper 2.0 or view the details on the ATO website.

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JobKeeper 1.1

On 21 July 2020, the Government announced changes to the JobKeeper program. It will be extended until 28 March 2021. Information about the extended program can be found here. Those receiving JobKeeper payments under the current program, will continue to do so until 27 September 2020. While the current program remains essentially the same, there have been some minor changes as described below.

Changes to JobKeeper 1.0

The following aspects of the current JobKeeper program have changed:

  • The relevant date of employment to determine employee eligibility has moved from 1 March 2020 to 1 July 2020. This has been done to increase the number of eligible employees for JobKeeper and to further support businesses.
  • The actionable date for assessing employee eligibility was 3 August 2020. This means that employees under the 1 July test can be included in your JobKeeper claim for fortnights beginning 3 and 17 of August 2020.
  • If an employee’s employment ended with one employer prior to 1 July 2020, they may now be eligible to be nominated by a new employer.
  • Long term casuals will be eligible as long as you can show that they were employed on a regular and systematic basis for 12 months between 1 July 2019 and July 2020 and were not a permanent employee of any other employer.

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JobKeeper Payment

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.


  • 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.


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


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.


  • 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


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.

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