Updated: 26 June 2020
JobKeeper payment is a subsidy of $1,500 per fortnight per eligible employee paid to employers and self-employed persons who have experienced a reduction in turnover due to COVID-19.
Affected employers can claim the payments from 30 March 2020 for up to 6 months. The first payment will be received by employers in the first week of May. Payments will be made monthly in arrears (by 14th day of following month). The payment to employers is taxable.
Who is eligible?
Eligible businesses must have been carrying on a business in Australia or were a not-for-profit organisation in Australia on 1 March 2020 and are:
- Businesses with an aggregated turnover of less than $1 billion who experience a decrease in turnover of more than 30 per cent relative to a comparable period a year ago (of at least a month).
- Businesses with an aggregated turnover of $1 billion or more who experience a decrease in turnover of more than 50 per cent relative to a comparable period a year ago (of at least a month).
- Not-for-profit entities (including charities) who experience a decrease in turnover of more than 15 per cent relative to a comparable period a year ago (of at least a month).
Government bodies, individuals in bankruptcy, companies in liquidation and businesses subject to the Major Bank Levy are not eligible for the subsidy.
Where a business was not operating a year earlier or where their turnover a year earlier was not representative of their usual turnover, the Tax Commissioner has released a series of alternative tests. Please contact our office to determine if these tests are suitable for your situation.
The decrease in turnover is based on GST turnover which excludes input taxed supplies, payments for no supply, capital asset sales and sales not connected with Australia. GST grouping is disregarded. The decline in turnover only needs to be met once to be eligible although later months' turnover figures will still need to be reported.
The test period can be either a month from March to September 2020 or a quarter from April to September 2020 and does not need to be the same as your BAS lodgement period. You can use a projected estimate where the period has not yet ended. The test will generally be on the same basis (cash or accruals) as your BAS. If you are not registered for GST it will be on the same basis as you lodge your tax return. Where an estimate has been used, there will be some tolerance where employers estimate a greater than 30 per cent fall in turnover but actually experience a slightly smaller fall.
A sole trader, partnership, trust or company may be eligible in respect of one eligible individual. The following additional conditions apply:
- On 12 March 2020, the entity must have held an active ABN, and must have either:
a. Already lodged the entity's 2019 tax return and disclosed business income therein; or
b. Lodged a BAS for any period declaring a GST taxable sale that was made after 1 July 2018.
Note: A discretion to give further time after 12 March 2020 may apply in limited circumstances.
- The eligible business participant must not be an employee (other than a casual employee) of another entity.
- The eligible business participant must be actively engaged in the business carried on by your entity at 1 March 2020 and for the fortnight you are claiming.
Eligible employees are:
- those employed by the eligible employer at 1 March 2020;
- currently employed by the eligible employer (including those stood down or re-hired);
- full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- at least 18 years of age, or 16 years of age and not a financially dependent fulltime student;
- Australian citizens, holders of a permanent visa, holders of a Protected Special Category Visa, holders of a non-protected Special Category Visa who has been residing continually in Australia for 10 years or more, or holders of a Special Category (Subclass 444) Visa;
- not in receipt of a JobKeeper Payment from another employer; and
- not in receipt of Dad and partner pay, government parental leave pay or workers compensation payments for incapacity to work.
How do I get it?
- From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
- Obtain a notification from each employee, confirming the employee's consent to being included in the employer's JobKeeper application. Click the link to download form: https://www.ato.gov.au/Forms/JobKeeper-payment---employee-nomination-notice/
- Businesses can notify the ATO by 26 April 2020 if it wants to participate from the commencement of the scheme on 30 March 2020. Otherwise businesses must notify its participation before the end of the first JobKeeper fortnight for which it wants to participate.
- Provide details of eligible employees for each fortnight to the ATO in the approved form. The ATO will use Single Touch Payroll data where available.
- Notify eligible employees within 7 days of each fortnightly claim for the subsidy.
- Report monthly to the ATO by the 7th of each month on its GST turnover for the previous month, and its projected GST turnover for the coming month
Note: We can lodge the forms on your behalf or assist you with this process.
Payments are expected to be as follows:
- If the employer enrols, the JobKeeper scheme must be claimed for all eligible employees. Employers are not allowed to pick and choose between their eligible employees.
- The employer must pass on the full $1,500 to each employee after withholding tax as usual.
- If employees are paid monthly, the payments can be apportioned across the fortnights.
- The $1,500 payment can include salary sacrificed amounts.
- The Commissioner has the discretion to treat a particular event as having happened in a different fortnight to the extent if it is reasonable to do so. For example, an employee may be accidently underpaid one fortnight resulting in their payment being less than $1,500 and then they receive back pay in the next fortnight to correct this. If this occurs the Commissioner may decide that it is reasonable to treat the employee as having received at least $1,500 in each fortnight.
- Employers will not be obliged to pay superannuation on any additional wage paid under a JobKeeper payment but will need to pay superannuation on their usual wages. For example, an employee receiving $3,000 per fortnight would still be entitled to superannuation on the full amount but an employee who is usually only paid $1,000 per fortnight would not receive superannuation on the additional $500.
- Employees receiving JobKeeper payment will not be eligible for JobSeeker payments from Services Australia (formerly Centrelink).
- JobKeeper payments are subject to income tax but not GST.
- Employers need to be aware of their obligations even where workers are stood down. For example, to continue to accrue leave. Some changes have been made to the Fair Work Act to support the JobKeeper scheme.
- JobKeeper payments to employees are exempt from South Australian payroll tax. Other states and territories are expected to follow suit but please check with our office.
- The rules contain integrity measures which allows the ATO to clawback the payments where the entity entered into or carried out the scheme for the sole or dominant purpose of obtaining or increasing the amount of the JobKeeper payment.
- Software providers are updating their reporting and providing advice about how to process JobKeeper payments in their payroll system. Please contact our office if you require assistance with managing your payroll.
- It's excluded in ReturnToWork SA remuneration calculation.
The Government is moving quickly and things are changing daily with regards to the response to COVID-19.
Should you have any queries regarding this measure or any Government measure announced in relation to COVID-19, please contact our office for more information.
If you would like to print this information please click here for PDF format.
The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.