The JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by COVID-19. Eligible businesses that elect to participate will receive a payment of $1,500 per fortnight per eligible employee.
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).
Payments will be made to the employer monthly in arrears by the Australian Taxation Office (ATO) and can only be paid once per person.
Dates to know
- Payments will begin – First week of May
- First Pay Period 30th March – 12th April 2020 (based on eligible employees at 1st March)
- Last Pay Period 14th September – 27th September 2020
- Satisfy payment requirements each 14 day period
- Business turnover is less than $1 billion
- Estimate of turnover has fallen or will likely to fall by 30 per cent or more
- Legal obligation on employers to ensure they passed the full wage subsidy onto employees
- Payments will start from first week of May, backdated to March 1
- The employer must have been in an employment relationship with eligible employees as at 1 March 2020
- Payments will be for Full-time workers, part-time workers, sole traders & casuals who have been with their employer for 12months or more
- Currently employed by the eligible employer (including those stood down or re-hired)
- Were employed at 1 March 2020
- Full-time, part-time or long-term casuals (casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020)
- At least 16 years of age
- Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
- A resident for Australian tax purposes on 1 March 2020
- Is not in receipt of a JobKeeper Payment from another employer
- Turnover – businesses’s GST turnover, with some modifications for groups
- Turnover test period – a calendar month that ends after 30 March 2020 and before 1 October 2020 or a quarter that starts on 1 April 2020 or 1 July 2020 and the relevant comparison period must be the period in 2019 that corresponds to the turnover test period
- 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.
- Only Australian based turnover is relevant
- As the application will require employers to make an estimate about expected fall in turnover, Treasury has advised there will be some tolerance if the actual fall is slightly smaller than that estimated by the employer.
- The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances
Superannuation Guarantee (SG) & Withholding Tax
- Employees earning more than $1,500 per fortnight (before tax) – Withholding tax & Superannuation Guarantee are required to be paid as normal
- Employees earning less than $1,500 per fortnight (before tax) – Withholding tax to be paid as normal on the $1,500. Superannuation Guarantee is required to be paid as normal on the normal amount of their earnings. The additional wages paid by the JobKeeper payment, employers have the option to pay Superannuation Guarantee
What to do to receive JobKeeper
MORE INFORMATION IS TO BE PROVIDED BY TAX OFFICE SHORTLY
- Apply to the ATO (the ATO is working on this)
- Self assess the required turnover decline
- ATO will use Single Touch Payroll data to pre-populate eligible employees
- Ensure each elibilbe employee receives at least $1,500 per fortnight (before tax)
- Notify all eligible employees that you nominated them as eligible employee for JobKeeper payment
- Continue to provide information to the ATO
- Keep all records to substantiate eligibility and payment claims
- Payments will be made via your payroll system and reported to the ATO via Single Touch Payroll (STP). If you are not setup for STP there will be a manual process (the ATO is working on this)
Self-employed and other eligible businesses
- Had an ABN on or before 12 March & engaged in a business
- Included this income in the 2019 tax return (lodged before 12 March or may be later as allowed by the Commissioner) OR lodged an Activity Statement (lodged before 12 March or may be later as allowed by the Commissioner)
- Beneficiaries of a trust who only receive distributions, rather than being paid salary and wages for work done
- ONE individual beneficiary (not a corporate beneficiary) can be nominated to receive the payment
- Directors who are not being paid salary and wages for work done
- Eligible business can nominate only ONE director to receive the payment
- Only ONE partner can be nominated to receive the payment
Information still to come…
- The link to apply to participate in the scheme (it will be located on ato.gov.au)
- Alternative tests to establish eligibility in specific circumstances
- Single Touch Payroll & software requirements
Links to more information
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All opinions expressed are those of the author Julie Cohen.
This information is intended to provide general information only and has been prepared without taking into account any particular person’s objectives, financial situation or needs. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs.
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