JOBKEEPER SCHEME OVERVIEW
The Federal Government has introduced a subsidy intended to assist businesses affected by the Coronavirus to continue to pay eligible employees and eligible business owners during the current economic downturn. Employers and business owners who qualify for the JobKeeper scheme can claim a payment of $1,500 per fortnight for each “eligible employee” or “eligible business participant” for a six month period, consisting of 13 fortnights, from 30th March 2020 to 27th September 2020. While eligible businesses will receive the subsidy, it is paid monthly in arrears. This means you will receive the subsidy in May for wages paid in April.
Employers must be carrying on a business and show a 30% decline in turnover against a comparable period in the previous year of at least a month. The comparative periods can be turnover in :
- March 2019 compared to turnover in March 2020,
- April 2019 compared to turnover in April 2020, or
- April – June quarter 2019 compared to turnover in the April – June quarter 2020 (4th Quarter), or
- July – September quarter 2019 compared to turnover in July – September quarter 2020 (1st Quarter), or
- Alternative tests may be available if you have operated in unusual circumstances such as drought, but please contact us if you would like to discuss further
Turnover can be on a cash or accruals basis and projected turnover may be used.
There is no need to re-qualify once you have entered the scheme.
At this stage, the tax office is relying on self-assessment. However, there are integrity measures in place so the tax office could request supporting documentation at a later date. If you are later found to be ineligible, you would need to repay part or all of the JobKeeper payments. For this reason, you should document and retain all records showing how you have made this assessment, particularly if you are working on projected figures.
If you pass this turnover test, you can then apply for the JobKeeper subsidy for :
- Employees, and/or
- Business participants (ie Business owners).
Eligible employees are employees who:
- Were employed at 1 March 2020, are current employees of a qualifying employer, including employees that have been stood down and re-hired
- Were as at 1 March 2020 employed on a full time or part time basis, or had been employed on a regular and systematic basis for 12 months or more at 1 March 2020
- Are at least 16 years of age at 1 March 2020
- Complete the ATO’s JobKeeper Employee Nomination Notice form, agreeing to receive JobKeeper payments from you and confirming they are not receiving a JobKeeper payment from another employer or that they do not have a second job.
- Were an Australian resident for tax purposes on 1 March 2020, or an Australian citizen, or the holder of a permanent visa, or a special category visa holder at 1 March 2020.
- Are not entitled to parental leave pay or dad and partner pay
- Are not currently totally incapacitated for work and receiving payments under an Australian workers’ compensation law in respect of your total incapacity to work
Obligations of Employer
- If an employer elects to participate in the JobKeeper Scheme all eligible employees must be included. This means you cannot nominate some eligible employees to receive the payment and others not to receive the payment.
- Employers should make their own assessment of the employee’s eligibility to receive the JobKeeper payment because there are provisions in place to make business owners jointly and severally liable for any overpayment.
- Employers need to ensure that all eligible employees are paid a minimum of $1,500.00 gross per fortnight in each of the fortnightly pay periods ending 13 April to 26 April. A “top up” in the pay period ending 26 April 2020 may need to occur for low paid employees. To be eligible for the JobKeeper for April, you would need to pay this top-up amount by 8 May (recently extended from 30 April). For fortnightly pay periods after 26 April eligible employees need to be paid a minimum of $1,500.00 per fortnight. However before paying any top-up amounts, you should ensure you are entitled to receive the JobKeeper payments. We would suggest you enrol before making these top-up payments. If employees are earning more than $1,500 per fortnight, you must continue to pay them their actual wages earned even if it exceeds $1,500 per fortnight.
- Deduct PAYG Withholding tax from all amounts paid to employees (normal wages and the Jobseeker payments) and include in your Business Activity Statements as normal
- Continue to make compulsory super contributions of 9.5% for all employees based on their actual hours worked. If employees have earned more than $1,500 per fortnight you pay super as normal at 9.5% of their gross wages. If they have earned less than $1,500 (eg $1,000 for the fortnight), while you are paying the employee $1,500, you only need to pay super on the lower amount (ie 9.5% of $1,000 of $95)
Even if you don’t have eligible employees, if your business passes the turnover test outlined above, you may be eligible to receive a JobKeeper payment if you are a :
- Sole trader, or
- Partner in a partnership, or
- Director or shareholder of a company, or
- Beneficiary of a trust
To be entitled, as at 1 March, 2020 you :
- must be actively involved in the business
- cannot be on the payroll of the business (if you are on the payroll of the business you would usually be an eligible employee as above)
- must be 16 years of age or over
- be an Australian resident
- must not be currently employed by another entity (unless on a casual basis)
- cannot be on paid parental leave or receiving dad or partner payments
- are not currently totally incapacitated for work and receiving payments under an Australian workers’ compensation law in respect of your total incapacity to work
Only one “business participant” can apply for each business entity and each business participant can only nominate in relation to one entity (either as employee or business participant).
Timeline of the Jobkeeper Scheme to receive maximum benefits
- 1 March 2020 – Employee must be employed by the employer
- 30 March 2020 – 27 September 2020 – Scheme Period
- 20 April – Commencement date for employer to enrol in JobKeeper Scheme
- 30 April 2020 – To receive JobKeeper payments in May, ATO needs to have been notified of enrolment in scheme and been provided with details of eligible employees or eligible business participants (ATO has recently announced an extension until 31 May to enrol and provide further details, however, this will delay the payments. We also note that there may be difficulties lodging Single Touch Payroll (STP) reports with the tax office if you have made top-up payments to employees but are not yet registered for JobKeeper.)
- 4 May 2020 – 8 May 2020 ATO commences payment of the JobKeeper Payment for first 2 fortnightly pay periods ending 26 April 2020
- 8 May 2020 (previously 30 April) – Employees need to have been paid a minimum of $1,500.00 per pay period for periods ending 13 April 2020 and 26 April 2020. If you are making top-up payments, you need to ensure you are entitled to receive JobKeeper payments. We would suggest you enrol before making top-up payments.
- 31 May 2020 - ATO needs to have been notified of enrolment in scheme and been provided with details of eligible employees or eligible business participants
Forsyths can assist you to apply for the JobKeeper payment, but we still need some information from you and you may need to lodge some information through your Single Touch Payroll (STP) software. An overview of the process is provided below:
Step 1 – Check your turnover has decreased (as above) and ensure you retain the records to document your eligibility.
Step 2 -Check you have either eligible employees or are an eligible business participant
If employees are eligible, please arrange for them to sign and return the Nomination form. You can only apply for employees who sign and return the forms.
There are very specific rules applying to casual employees, so if you have casual employees, please contact us so we can assist in assessing their eligibility.
If you have any concerns that an employee may have nominated themselves, without being eligible, you may be liable to repay their JobKeeper payments, so you should ensure the employee nominations are reasonable.
You should advise employees you are claiming the JobKeeper payment for them.
If you are registering as an eligible business participant you should also complete the nomination form.
Neither the employee nor business participant forms need to be lodged with the tax office, however, you should ensure you have them on file if the tax office later requests them. You will also need the details from these forms at Step 4 below.
Step 3 – Ensure wages paid for all eligible employees
As above, ensure that gross wages of at least $1,500 per fortnight are paid to all eligible employees. PAYG Withholding tax should be deducted from all wages paid (including the JobKeeper payment) and compulsory super contributions should continue to be paid based on actual hours worked. To be eligible for the JobKeeper subsidy for April, the minimum of $1,500 per fortnight must be paid by 8 May (recently extended from 30 April). However, before paying additional wages, you should ensure you are eligible for the JobKeeper payments and we would suggest you enrol for the scheme before making any top-up payments.
Step 4 – Enrol
Steps 4 and 5 should be done by the 31 May, 2020 to ensure you receive your maximum JobKeeper payments. However, if possible, we would recommend both steps be done by 30 April, 2020 to ensure you receive the subsidy as soon as you are entitled. This can be done through the Business Portal using your myGovID. You login, then:
- Select Manage Employees, then the link for JobKeeper payment
- Complete the form by providing your:
Alternatively Forsyths can enrol on your behalf, but we require your agreement to do this.
You can still enrol after this date when you meet the eligibility criteria, but will not receive JobKeeper payments for April.
Step 5 – Advise the tax office details of all eligible employees or eligible business participants
This is done either through your :
- Single touch Payroll (STP) software, or
- If you don’t have STP software, through your business portal or our tax agent portal
Step 6 – Lodge monthly updates of actual and projected turnover and employees
This is done either through the Business Portal or the Tax Agent Portal on an ongoing basis. This is not to re-assess your eligibility, but to demonstrate the effect the JobKeeper subsidy has had on your business.
Forsyths can assist with applications for the JobKeeper and the ongoing documentation required throughout its six-month duration.
Any advice contained in this material is General Advice and does not take into account any persons individual investment objectives, financial situation or needs. Any representations, opinions or statements are based on our understanding of the relevant legislation as at the date of issue. Although every effort has been made to verify the accuracy of the information contained in this material, Forsyths Business Services, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information. Accounting & Business Services are provided by Forsyths Business Services Pty Ltd ABN 66 182 781 401, liability is limited under a scheme approved under Professional Standards Legislation.