JobKeeper - What employers need to know and do to access the Jobkeeper Payment

1. Meet the Eligibility requirements:

  • You carried on a business in Australia or were a not-for-profit organisation that operated in Australia on 1 March, 2020.

  • Your business has faced a:

    • 30% fall in turnover (if your aggregated turnover is $1 billion or less).

    • 50% fall in turnover (if your aggregated turnover is more than $1 billion), or

    • 15% fall in turnover including donations and gifts (if you are an ACNC-registered charity and not a university or school).

  • You employed at least one eligible employee on 1 March, 2020.

  • Your eligible employees are currently employed by your business for the fortnights you start to claim for, and continue to claim for (including those who are stood down or re-hired).   

  • You pay your eligible employees at least $1,500 before tax for the fortnights you start to claim for, and continue to claim for.

  • You successfully enrol for the JobKeeper scheme and apply for JobKeeper payments.

How to calculate a fall in turnover for the first fortnight starting 30 March 2020
To work out your fall in turnover, 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.

How you choose to project your fall in turnover is not dependent on whether you report on a quarterly or monthly BAS, though you can do that if it is easier. The turnover calculation is based on GST turnover, but there are some modifications, including disregarding GST grouping (where two or more associated business entities operate as a single GST group). The ATO will provide more information soon about applying the turnover test.
If you work out that you qualify for the JobKeeper payment for the first fortnight because your turnover has declined by the relevant amount, you remain eligible and do not need to keep testing turnover in following months. However, you will have ongoing monthly reporting requirements. More information will be provided by the ATO soon.
The Commissioner of Taxation also has the discretion to set out alternative tests that can establish your eligibility when turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year). We will provide more information about alternative tests as soon as this information is available.
 
Who is an eligible employee: 

  • They are currently employed by your business (including those stood down or re-hired.

  • They are either:

    • Permanent full-time or part-time employees (or another entity in your wholly owned group) who were employees as at 1 March, 2020.

    • Casually employed by your business (or another entity in your wholly owned group) on a regular and systematic basis for at least 12 months as at 1 March, 2020 and not a permanent employee of any other employer.

  • They were at least 16 years of age as at 1 March, 2020.

  • They were an Australian resident as at 1 March, 2020 within the meaning of the Social Security Act 1991, which requires that they reside in Australia, and are one of an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder:

    • More information about these requirements can be found on the Services Australia website under residence descriptionsExternal Link.

    • The employee can also be an Australian tax resident who is a Special Category (Subclass 444) Visa Holder.

  • They were not in receipt of any of these payments during the JobKeeper fortnight:

    • government parental leave or Dad and partner pay.

    • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

  • They have not agreed with any other employer to be nominated as an eligible employee for the JobKeeper payment.

  • They complete the JobKeeper employee nomination notice.

 
2. How you successfully enrol for the JobKeeper scheme and apply for JobKeeper payments: 
From 20 April,2020 onwards

  • Register your interest and subscribe for JobKeeper payment updates.

  • Check you and your employees meet the eligibility requirements.

  • Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).

  • Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.

  • Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent.

  • From 20 April, 2020, you can enrol with us 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.

  • In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.

  • Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

Confirmation of eligible employees you will claim JobKeeper Payment for - available from 4 May, 2020 onwards)

  • Apply to claim the JobKeeper payment by logging in to the ATO Business PortalExternal Link

  • Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.

  • Identify your eligible employees in the application form by:

    • selecting employee details that are prefilled from your STP (single Touch Payroll) pay reports if you report payroll information through an STP enabled payroll solution, or

    • manually entering employee details in ATO online services or the Business Portal if you do not use an STP enabled payroll solution, or

    • using a registered tax agent who will submit a report on your behalf through Online services for agents.

  • Submit the confirmation of your eligible employees online and wait for your confirmation email or SMS showing it has been received.

  • Notify your eligible employees you have nominated them.

  • The ATO will pay you the JobKeeper payment for all eligible employees after receiving your application.

  • Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via your registered tax agent. This will ensure you will continue to receive the JobKeeper payments from us. You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.

  • If your eligible employees change or leave your employment, you will need to notify us through your monthly JobKeeper Declaration report.

If you need assistance with enrolling, please get in contact with us.
 
How the flow of funds work:

  • You should pay your eligible employees in line with their existing pay amounts and pay cycle and meet the following requirements:

  • Pay the minimum $1,500 before tax to each eligible employee each fortnight (starting with the fortnight 30 March – 12 April) to claim the JobKeeper payment for that fortnight.

  • Continue to pay employees you are claiming for either

    • every subsequent fortnight until 27 September 2020

    • until your employees stop being eligible or you opt out.

  • Please note for the first two fortnights (30 March – 12 April and 13 April – 26 April), the ATO will accept that the minimum $1,500 payment before tax has been paid for each fortnight even if it has been paid late, provided it is paid by the end of April. This means that you can make two fortnightly payments of at least $1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April.

  • If your eligible employees earn less than $1,500 per fortnight before tax, you must pay them $1,500 each fortnight to claim the JobKeeper payment. This ‘top up’ of their salary or wages will ensure you remain eligible.

  • You cannot pay your employees less than $1,500 before tax per fortnight and keep the difference.

  • You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 before tax per fortnight.

  • If your eligible employees earn more than $1,500 per fortnight, you will only receive $1,500 for each eligible employee and you should pay any additional balance yourself.

  • If an employee has been stood down after 1 March, 2020 and you re-engage them, you must pay your eligible employee at least $1,500 per fortnight before tax. You will only be eligible to claim for the fortnights after you have re-engaged your employee within the pay period.

  • If an employee was employed on 1 March, 2020, subsequently ceased employment with you, and has since been re-engaged by you, the employee must receive, at a minimum, $1,500 per fortnight, before tax.

  • You cannot claim the reimbursement for the JobKeeper payment for employees who were not paid the full amount during each JobKeeper payment period.

  • If your ordinary arrangement is to pay your employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if your ordinary arrangement is to pay an employee every four weeks, it will be reasonable if the employee is paid at least $3,000 for every four-week period.

  • The JobKeeper payment is a reimbursement from the ATO to you and cannot be paid in advance.

  • All JobKeeper payments are assessable income to your business when received. A deduction is claimed for the payments made to your employees.

  • The JobKeeper payment is not subject to GST.

  
3. What do you need to do for your employees

  • You need to identify which employees you intend to claim the JobKeeper payment for and tell them you intend to claim the JobKeeper payment for them.

  • You need to provide these employees with the JobKeeper employee nomination notice and ask them to return it to you by the end of April if you want to claim JobKeeper payment for April.

  • If your employees have multiple employers, they can usually choose which employer they want to nominate through. However, if your employees are long-term casuals and have other permanent employment, they cannot nominate you. They cannot receive the JobKeeper payment from more than one employer.

  • If an employee is currently receiving an income support payment, they must notify Services AustraliaExternal Link of their new income to avoid incurring a debt that they will have to repay.

 
Other facts clarified regarding the JobKeeper Payment

  • Once you meet the decline in turnover test you are not required to retest to remain eligible.

  • If your business has not met the decline in turnover test, but does in a future period you can start receiving the JobKeeper payment once you become eligible through to 27th September, 2020 (no backdated JobKeeper payments will be received).

  • If you stop paying your eligible employees you will stop being eligible for the JobKeeper Payment.

  • All eligible employees must be paid the JobKeeper payment even if they have been stood down.

  • Tax is to be withheld on the JobKeeper payment.

  • The JobKeeper payment will not increase a businesses superannuation guarantee obligation.

    • You will still need to pay superannuation on an employee’s ordinary wages.

    • If your employee has an increase in wages due to the JobKeeper payment (including in the case of stood down workers) the increase due to the JobKeeper payment will not require superannuation to be paid.

    • The employer can choose to pay superannuation on this additional amount.

  • Workers engaged through a labour hire firm and not employed directly by your business are not eligible employees.

  • Although the ATO will not be performing integrity checks prior to making initial payments, data matching and integrity checks will be going on behind the scenes.

  • It is important to self-evaluate your eligibility carefully as it is possible for an ineligible business to receive the initial JobKeeper payments before integrity checks are performed.

  • If payments are made to an ineligible business they will need to be paid back to the ATO.

  • When you work out your fall in turnover we strongly recommend that you keep these documented calculations on file. This could be required should the ATO question your eligibility after attending to any integrity checks. It is important to note that the any projections must be calculated on a fair and reasonable basis.

The ATO will provide further information on some special rules for self-employed soon and we will update you on this once it is available.

Please contact our office on 8523 0999 if you need to discuss any of these items in further detail.

We would like to remind you all that we are here to help you and will continue to be throughout this challenging time.

Stay safe and look after each other.

Sources:
       https://www.ato.gov.au/General/JobKeeper-Payment/
       NTAA - JobKeeper Payment Scheme

Regards,
The Team at Milanese & Co Accountants

Milanese & Co Accountants