Update, Tuesday 28 April:
The Australian Taxation Office have extended the deadline for businesses to enrol for the initial JobKeeper periods.
Initially, employers were required to apply before 30 April 2020 however the extension will now see the deadline extended to 31 May 2020.
Businesses who enrol by 31 May will be able to claim both of the Jobkeeper fortnights in April and May, provided they have met all of the eligibility requirements for those fortnights. To be eligible you must have paid your employees by the appropriate date for each of the fortnights.
For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.
If you are yet to speak to an Accountant about enrolling for the JobKeeper payments we encourage you to do so.
UPDATE, Thursday 23 April: The Australian Taxation Office have registered an alternative test when it comes to being eligible for the JobKeeper payments.
The alternative test will only come into play if an entity cannot satisfy the basic decline in turnover test.
The explanatory statement notes that the alternative tests will only apply to the below circumstances:
- Circumstances where an entity commenced business after the relevant comparison period in 2019 or the business did not exist in the relevant comparison period
- Circumstances where an entity acquired or disposed of part of their business after the relevant comparison period in 2019; and where an entity has restructured part or all of their business after the relevant period in 2019
- Entities who had an increase in turnover by 50% or more in the 12 months immediately before the applicable turnover test period, or 25% or more in the 6 months immediately before the applicable turnover test period, or 12.5% or more in the 3 months immediately before the applicable turnover test period will be covered
- Entities who have been affected by a drought or other natural disaster in the relevant comparison period in 2019
- Entities who have an irregular turnover that is not cynical, such as can occur in the building and construction sector
- Sole traders or a small partnership where the sole trader or one of the partners did not work for all or part of the relevant comparison period because they were sick, injured or on leave during the relevant comparison period and those circumstances affects the turnover of the sole trader or partnership will also be covered
The recent JobKeeper scheme announced by Government will see $130 billion invested in keeping Australian’s in jobs. The scheme will provide support to businesses who have been affected by the significant economic impact caused by coronavirus.
The JobKeeper scheme will provide support to around 6 million employees.
The payments will be administered through the Australian Taxation Office. Employers must register to receive the payments, check they meet the eligibility criteria and must pay eligible employees a minimum of $1,500, before tax, per JobKeeper fortnight.
A step-by-step guide for applying is below.
“This $1,500 payment is a flat payment and is the equivalent of around 70% of the median wage and represents about 100% of the median wage in those sectors most heavily impacted by the coronavirus like retail, like hospitality and tourism.” – Treasurer, Josh Frydenberg
Who is eligible to receive the JobKeeper payments?
Employers are eligible through businesses, companies, partnerships, trusts and sole traders if they meet the below criteria:
- they have a turnover of less than $1 billion whose turnover has fallen by more than 30%.
- they have a turnover of $1 billion or more whose turnover has reduced by more than 50%.
- their business is not subject to the Major Bank Levy.
How do I calculate a reduction in turnover?
To determine whether you meet the fall in turnover criteria you can compare either:
- 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.
What is the process in getting the payments?
- It’s important to stay informed of the regular updates. Register your interest and register to receive ATO updates as they become available – https://www.ato.gov.au/Job-keeper-payment/
- Review the eligibility criteria and assess whether your employees meet the requirements.
- You need to pay your eligible employees $1,500 per JobKeeper fortnight and deduct the correct amount of PAYG withholding tax from the amount. The first JobKeeper payment period was March 30 – April 12.
- Communicate with your employees that you are applying for the JobKeeper payment. It’s important you let them know so they do not claim they payment through another employer.
- Your eligible employees must complete the JobKeeper employee nomination notice prior to the end of April. You must provide this completed form to your registered tax agent, if you use one.
- You will be able to enrol to receive the JobKeeper payments directly with the ATO online from 20 April 2020. You must do this by the end of April to claim the JobKeeper payments for the April period.
- You will be required to provide your bank details and indicate the number of employees who will be eligible for the April period JobKeeper payments.
What you need to know about the payment process
The fortnightly payments will be issued by the ATO from 1 May 2020. These payments will be backdated to 30 March 2020. It is important that you continue to pay your eligible employees the $1,500. Employees who have been stood down since 1 March 2020 are also eligible for these payments.
This is what employees are eligible for if their employer takes up the JobKeeper assistance:
- employees who ordinarily receive $1,500 or more in income (per fortnight) before tax will continue to receive their normal income. The JobKeeper payment will help subsidise part of the income payment.
- employees who ordinarily receive less than $1,500 (per fortnight) will now be paid a minimum of $1,500 per fortnight, before tax.
- if an employee has been stood down, their employer must pay, at a minimum $1,500 per fortnight, before tax.
- employees who were in an employment relationship with an employee as a 1 March 2020, have ceased employments, but have been re-engaged by their employer, will receive the $1,500 fortnightly (before tax) payment.
There is a process you must follow to ensure you continue to receive the JobKeeper payments. Strategem taff are available to assist you with this process.
- Apply to claim to JobKeeper payment through the ATO Business Portal.
- As mentioned above, you need to have been paying eligible employees a minimum of $1,500 per fortnight before tax.
- The application form will require you to identify your eligible employees.
- Submit your request and await your confirmation.
- After you receive your confirmation, the ATO will pay you the JobKeeper payments for the nominated eligible employees.
Each month you will be required to reconfirm that your nominated eligible employee circumstances have not changed. You can do this via the Business Portal or again, Strategem can assist you with this process.
What about sole-traders?
Businesses without employees will need to provide an ABN for their business and nominate an owner to receive the payment.The nominated person will be required to provide their TFN and providing they are not receiving the $1,500 from any other employer, the payment willbe made monthly into the nominated person’s account.
Apply for the support through the MyGovID app.
How do I, as an employee, know if I am eligible to receive support?
The below criteria outlines which affected employees are eligible to receive the JobKeeper payments:
- they are currently employed by an eligible employer.
- they have been stood down or re-engaged by an eligible employer.
- they were in an employment relationship as at 1 March 2020 either full-time, part-time or casual*.
- they are at least 16 years of age.
- they are not receiving the JobKeeper payment from any other employer.
*Casual employees must have had a regular employment relationship with the employee for at least 12 months before 1 March 2020.
Eligible employees must be an Australian Citizen, permanent Visa holder, Protected Special Category Visa holder, a non-protected Special Category Visa holder who has been residing in Australia continually for 10 or more years or a Special Category (Subclass 444) Visa holder.
What about not-for-profits and charity organisations?
Charities that are registered with the Australian Charities and not-for Profits Commissions (ACNC) are eligible to receive the JobKeeper payments if they have suffered a 15% or more decrease in turnover.
It is important to note that ACNC charities such as primary schools and secondary schools can apply the basic turnover test depending on their aggregate turnover (either 30% or 50%).
Where do I start?
There is so much information available relating to the recently announced JobKeeper payments. We would suggest your first step should be to contact your Accountant and walk through the process with them.
If you do not have an Accountant, Strategem can provide you with the support you need.
From April 20 – enrol for the JobKeeper payment
By April 30 – you must have enrolled and pay your employees to claim
May 4 onward – identify your employees
By May 31 – you have until the end of May to identify and enrol your employees
Monthly – you will be required to confirmed eligibility on a monthly basis
At Strategem, our Accountants are ready and available to support you throughout this process. If you have any questions or require any assistance, please reach out via phone on (03) 5445 4777 or via email at email@example.com