IS MY BUSINESS ELIGIBLE?
Employers (including not-for-profits) will be eligible for the subsidy if:
For charities registered with the Australian Charities and Not-for-profits Commission (ACNC), they will be eligible for the subsidy if they estimate their turnover has fallen or will likely fall by 15 per cent or more relative to a comparable period.
JobKeeper Payments are paid in respect of each eligible employee who was employed at 1 March 2020 and is currently employed by the business (including those who are stood down or re-hired.
WHAT TYPE OF ENTITIES ARE ELIGIBLE?
All business types, including not-for-profits, will be eligible with the exception of those listed below.
The following entities will not be eligible:
Additionally, a company that is in liquidation, or a partnership, trust or sole trader in bankruptcy, will not be eligible.
Some sectors may not be eligible if they are separately provided with support from the Government that explicitly requires them to forgo access to the JobKeeper Payment.
WHAT DO I NEED TO DO IF I WANT TO PARTICIPATE?
Eligible employers need to determine if they want to participate in this program by electing into it. More details will be provided about how to do that.
The JobKeeper Payment will be administered by the ATO.
If you want to participate, you can register your interest on the ATO website to keep updated on information about the JobKeeper payment.
If you register you will receive updates and information from the ATO about how and when to claim the JobKeeper payment.
If you are a BAS or Tax agent you do not need to register each client separately, unless you are registering each client to receive the information directly.
HOW DO I WORK OUT WHICH OF MY EMPLOYEES ARE ELIGIBLE EMPLOYEES?
You will only be able to claim the JobKeeper payment for eligible employees that were in your employment on 1 March 2020, and continue to be employed while you are claiming the JobKeeper payment.
An eligible employee is an employee who:
You can only claim JobKeeper payment for eligible employees if you pay the $1,500 per fortnight (before tax) to each eligible employee.
These payments should be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available.
If you do not report through Single Touch Payroll, you can still claim the JobKeeper payment; however there will be a manual claim process.
You will be required to advise your employees whether you have nominated them as an eligible employee for the purposes of the payment.
WHEN WILL I RECEIVE THE FIRST PAYMENT?
The first payments by the ATO will be received by employers in the first week of May.
HOW OFTEN WILL THESE PAYMENTS BE MADE?
The payments will be made by the ATO monthly in arrears.
WHAT ARE THE ELIGIBLE PAYMENT PERIODS FOR REIMBURSEMENT FOR A JOBKEEPER SUBSIDY?
Employers will need to satisfy payment requirements for their eligible employees in respect of each 14 day period covered by the scheme. The first period starts on Monday 30 March 2020 and ends on Sunday 12 April 2020.
The payment requirement is that they pay their eligible employees a minimum of $1,500 per fortnight in the scheme payment periods. Where an employer pays their staff monthly, the ATO will be able to reallocate payments between periods. However, overall an employee must have received the equivalent of $1,500 per fortnight.
The final period will start on Monday 14 September 2020 and end on Sunday 27 September 2020.
IF I HAVE STOOD DOWN MY EMPLOYEES AFTER 1 MARCH 2020, AND ARE NO LONGER PAYING THEM, DO I NEED TO PAY THEM, FOR WHAT PERIOD AND BY WHEN?
Yes. You can claim JobKeeper for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them a minimum of $1,500 per fortnight (before tax) for the payment periods of the JobKeeper Scheme.
The first payment period under the scheme is from 30 March 2020 to 12 April 2020. Where an employer pays their staff monthly the monthly payment must be equivalent to the required fortnightly payment.
For all following payment periods you will need to continue to pay your employees a minimum of $1,500 per fortnight (before tax), before the end of the payment period.
WHAT IS THE DEFINITION OF TURNOVER?
Turnover will be defined according to the current calculation for GST purposes and is reported on Business Activity Statements. It includes all taxable supplies and all GST free supplies but not input taxed supplies.
There are some modifications for businesses that are part of a GST group.
Further information on GST turnover, and how to calculate it, is available at the ATO website.
IS THIS TURNOVER TEST RELATED TO ONLY TURNOVER IN AUSTRALIA, OR DOES IT INCLUDE OVERSEAS OPERATIONS AS WELL?
Under the GST law, only Australian based sales are included and therefore, only Australian based turnover is relevant. A decline in overseas operations will not be counted in the turnover test.
WHAT IS A “JOBKEEPER ENABLING DIRECTION”?
The Fair Work Act has been amended as a result of the JobKeeper scheme. As part of this, employers receiving JobKeeper payments can give eligible employees “JobKeeper enabling directions” to vary certain terms of the employee’s employment, such as reducing their hours of work, duties and location of work, without the employee’s consent. Certain conditions must be met, including:
MY BUSINESS HAS ONLY JUST STARTED OR MY BUSINESS HAS “LUMPY” INCOME. HOW CAN I SELF-ASSESS THAT MY TURNOVER HAS FALLEN 30 PER CENT?
To establish that a business has faced or is likely to face a 30 per cent or more or 50 per cent or more fall in turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or quarter (depending on the Business Activity Statement reporting period of that business) relative to their turnover in a corresponding period a year earlier.
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established, were scaling up, or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of the Coronavirus.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business ceases or significantly curtails its operations). There will be some tolerance where employers, in good faith, estimate a 30 per cent or more or 50 per cent or more fall in turnover but actually experience a slightly smaller fall.
DO BUSINESSES HAVE TO MEET THE DECLINE IN TURNOVER TEST ON AN ONGOING BASIS?
No. Whilst a business must satisfy the decline in turnover test in order to be entitled to a JobKeeper Payment, once it is satisfied, there is no requirement to retest in later JobKeeper Payment fortnights.
That is, the decline in turnover test only needs to be satisfied once. As a result, if a business can demonstrate that its turnover has been adversely impacted by at least 30% (or 50%, as the case may be), then it will continue to meet this requirement even if its turnover subsequently recovers in later JobKeeper fortnights.
DO BUSINESSES HAVE TO MEET THE DECLINE IN TURNOVER TEST ON AN ONGOING BASIS?
Businesses will be required to provide information to the ATO on a monthly basis in the form of a Jobkeeper Declaration which will include information in relation to the number of your eligible employees and details of your turnover.
WHAT DO I NEED TO DO REGISTER FOR JOBKEEPER, APPLY FOR AND RECEIVE PAYMENTS FROM THE ATO?
Refer to our detailed guide on Jobkeeper: Registration, Application and Reporting
HOW DO WE ENSURE WE HAVE THE RIGHT PAYROLL SET-UP TO CLAIM JOBKEEPER PAYMENTS?
For employers reporting through STP, it is important that payroll set up is done correctly in the software to avoid delays in Jobkeeper reimbursement. Refer to our guide on Jobkeeper: Setup in MYOB & Xero
I AM AN EMPLOYER NOT REPORTING THROUGH STP, HOW DO I IDENTIFY AND MAINTAIN THE ELIGIBLE EMPLOYEES?
Employers will log in to the business portal to update information about each eligible employee for each Jobkeeper fortnight by entering their TFN and date of birth
MY TURNOVER HAS NOT DECREASED BY 30 PER CENT THIS MONTH, BUT I BELIEVE IT WILL IN THE COMING MONTH. AM I ELIGIBLE?
You can apply for the payment if you reasonably expect that your turnover will fall by 30 per cent or more (or 50 per cent or more for businesses with a turnover of $1 billion or more) relative to your turnover in a corresponding period a year earlier. The ATO will provide guidance about self-assessment of actual and anticipated falls in turnover.
IT IS UNLIKELY THAT MY TURNOVER WILL DECREASE BY 30 PER CENT IN THE COMING MONTH, BUT CAN I APPLY LATER IF MY TURNOVER DECREASES IN ONE OF THE SUBSEQUENT MONTHS?
If a business does not meet the turnover test at the start of the JobKeeper scheme on 30 March 2020, the business can start receiving the JobKeeper Payment at a later time once the turnover test has been met. In this case, the JobKeeper Payment is not backdated to the commencement of the scheme. Businesses can receive JobKeeper Payments up to 27 September 2020.
MY BUSINESS IS STILL OPERATING AND MY EMPLOYEES ARE STILL WORKING. HOW WILL MY PAYMENTS TO THEM BE AFFECTED?
In many cases, your payments and obligations to eligible employees will not change. Your business, if eligible, will receive a $1,500 per fortnight subsidy to support their continued employment. However, if any eligible employee currently earns less than $1,500 before tax per fortnight, you will need to pay them $1,500 per fortnight before tax to receive the JobKeeper payment.
WHAT IF I PAY MY EMPLOYEES LESS THAN $1,500 PER FORTNIGHT BEFORE TAX?
To be able to claim the JobKeeper payment for an eligible employee, that employee must be paid a minimum of $1,500 income per fortnight, before tax is withheld.
If you want to claim the subsidy for an eligible employee and they have not been paid $1,500 per fortnight since 30 March 2020, employers must pay a ‘top-up’ payment to employees so that they are eligible. The ATO will provide further guidance on how this will work.
The employer will be reimbursed $1,500 per fortnight for each eligible employee.
Employers cannot pay their employees less than $1,500 per fortnight and be entitled to a payment for that employee.
WHAT IF I PAY MY EMPLOYEES MORE THAN $1,500 PER FORTNIGHT BEFORE TAX?
If the eligible employee is paid more than $1,500 a fortnight before tax, the employer will only be reimbursed $1,500 per fortnight.
IF I HAVE STOOD DOWN MY EMPLOYEES WITHOUT PAY AFTER 1 MARCH 2020 CAN I ‘BACK PAY’ THEM TO 30 MARCH 2020?
Yes. If you want to claim the JobKeeper Payment for your employees you will need to confirm your eligible employees want to be part of the scheme and arrange for them to be paid a minimum of $1,500 per fortnight before tax from 30 March 2020.
I LET MY EMPLOYEES GO AFTER 1 MARCH 2020. IF I RE-HIRE THEM, AM I ELIGIBLE TO RECEIVE THE PAYMENT?
Yes. You can receive the payment if you re-hire any eligible employees you had at 1 March 2020. You can receive the payment even if you then need to immediately stand them down, so long as they remain employed.
WHAT HAPPENS IF I DON’T HAVE THE MONEY TO CONTINUE PAYING MY ELIGIBLE EMPLOYEES UNTIL THE PAYMENTS ARE MADE?
The JobKeeper Payment is a reimbursement scheme that will be paid by the ATO monthly in arrears.
In cases where this may present cash flow difficulties, those businesses may want to speak to their bank to discuss their options. The banks have said businesses may be able to use the upcoming JobKeeper payment as a basis to seek credit in order to pay their employees until the scheme is making its first payments.
AM I REQUIRED TO PAY PAYGW AND SUPERANNUATION ON THE JOBKEEPER PAYMENT?
You must pay a minimum of $1,500 per fortnight to your eligible employees, withholding income tax as appropriate. The $1,500 per fortnight per employee is a before tax amount. Where an employee is paid more than $1,500 per fortnight, the employer’s superannuation obligations will not change. Where an employee is having their wages topped up to $1,500 per fortnight by the JobKeeper Payment, it will be up to the employer if they want to pay superannuation on any additional wages paid by the JobKeeper Payment.
WHAT HAPPENS IF MY EMPLOYEE RESIGNS?
If an employee for whom you are receiving the JobKeeper Payment resigns, you must notify the ATO. You may need to refund some money to the ATO.
I HIRED AN EMPLOYEE AFTER 1 MARCH 2020. CAN I RECEIVE THE JOBKEEPER PAYMENT FOR THEM?
No. The employee must have been engaged as of 1 March 2020.
I PURCHASED A BUSINESS IN THE LAST 12 MONTHS AND RETAINED SOME CASUAL EMPLOYEES WHO WORKED FOR THE PREVIOUS BUSINESS OWNER. ARE THE CASUAL EMPLOYEES ELIGIBLE?
Employers must assess whether their casual employees satisfy the test of working for 12 months on a regular and systemic basis. A casual may still meet this condition even if the entity operating the business has changed recently.
WILL THE ATO USE THE JOBKEEPER PAYMENTS TO OFFSET A BAS DEBT?
The payment will generally be paid directly to the employer and not used to offset tax liabilities, as the intent is that it is a payment that facilitates employers to pay their employees.
SOME OF MY EMPLOYEES ARE NOT ELIGIBLE EMPLOYEES FOR THE JOBKEEPER SCHEME. WHAT SUPPORT IS AVAILABLE FOR MY BUSINESS SO I CAN TRY AND RETAIN ALL OF MY EMPLOYEES?
The Government is providing a range of support to businesses to address the significant economic consequences of the Coronavirus. The Government is boosting cash flow for employers by providing up to $100,000 to eligible small and medium-sized businesses, and not-for-profits, that employ people, with a minimum payment of $20,000. These payments will help businesses with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Other measures to support businesses include temporary relief for financially distressed businesses, increasing the instant asset write-off and backing business investment.
CAN I CLAIM THE JOBKEEPER PAYMENT AND SUPPORTING APPRENTICES AND TRAINEES AT THE SAME TIME?
No. An employer will not be eligible to claim Supporting Apprentices and Trainees for any period where they choose to claim the JobKeeper Payment for the same Australian Apprentice. An employer or Group Training Organisation will NOT be eligible for the JobKeeper Payment where the employer is in receipt of an Australian Government wage subsidy for the same Australian Apprentice.
CAN AN EMPLOYER ELECT WHETHER THEY WANT TO CLAIM SUPPORTING APPRENTICES AND TRAINEES OR THE JOBKEEPER PAYMENT?
Yes. Where an employer is eligible for both Supporting Apprentices and Trainees AND the JobKeeper Payment for an Australian Apprentice, the employer will need to choose which payment best supports their circumstances.
IF I AM NOT USING SINGLE TOUCH PAYROLL (STP) BECAUSE I HAVE AN EXEMPTION TO 30 JUNE, 2020 HOW WILL I PROVIDE DATA TO THE ATO TO ENABLE MY BUSINESS TO RECEIVE THE JOBKEEPER PAYMENT?
The JobKeeper payments should be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available. If you do not report through Single Touch Payroll, you can still claim the JobKeeper payment, however there will be a manual claim process.
DO EMPLOYERS HAVE TO APPLY FOR ALL ELIGIBLE EMPLOYEES?
The Treasury guidelines confirm that if you elect to participate in the JobKeeper scheme, you must include all eligible employees in the scheme. However, in practice, this will be difficult for the ATO to regulate. We recommend proceeding with caution on applying for the scheme until there is further guidance from Treasury, which we expect will be in the next few days.
DO I HAVE TO TELL MY EMPLOYEES THAT WE ARE PARTICIPATING IN THE JOBKEEPER SCHEME?
Yes. It is a requirement that you notify all eligible employees that you are receiving the JobKeeper payment.
We recommend that you notify your eligible employees by way of a memo, which you can access here.
You are not required to notify employees who are not eligible, but can do so if you wish by way of memo, which you can access here.
HOW WILL I PROVE THAT MY ACTUAL OR ESTIMATED BUSINESS TURNOVER HAS DECLINED?
Ultimately, it is up to each business to self-assess whether it satisfies this test. In most cases, businesses will be required to make a reasonable estimate of their turnover for a month or a quarter. To assist with this process, the ATO (according to Treasury) will be providing guidance in this regard shortly. In the meantime, it would be prudent for businesses to start collating relevant information (e.g.interim accounts, monthly sales reports and prior year BASs) to be able to show comparison calculations in the event registration is questioned by the ATO
I AM A SOLE TRADER, OR OPERATE MY BUSINESS THROUGH A PARTNERSHIP, COMPANY OR TRUST AND DO NOT TAKE WAGES. IS MY BUSINESS ELIGIBLE TO RECEIVE JOBKEEPER PAYMENTS?
The JobKeeper Scheme also recognises that certain participants in a business (such as a soletrader) have also been affected by the economic downturn caused by the Coronavirus.
Accordingly, in order to provide a benefit to such business participants, payments can also be made to an entity in respect of what is referred to as an eligible business participant (i.e., generally controlling individuals who are not employees of their business).
A ‘business participant’ is an individual who is actively engaged in the business carried on by the entity (i.e., in the operations and activities of the entity) and is either:
• a sole trader;
• an individual partner of a partnership;
• a director or individual shareholder of a company; or
• an adult beneficiary of a trust.
Importantly, however, while a business may have more than one business participant, it can only nominate one of these individuals (who becomes the ‘eligible business participant’) in respect of whom it can receive a JobKeeper Payment.
Further information on the economic response to the Coronavirus is available on the Treasury website
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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