The JobKeeper Payment is a temporary scheme open to businesses impacted by the coronavirus. The JobKeeper Payment will also be available to the self-employed.
The Government will provide $1,500 per fortnight per employee for up to 6 months.
- Employers will be eligible for the subsidy if:
- their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month), or
- their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month), and
- the business is not subject to the Major Bank Levy. The Major Bank Levy is a tax of 0.06 per cent is applied to the liabilities of banks meeting certain size criteria, initially, it will apply to the five largest banks (ANZ, Commonwealth, NAB, Macquarie and Westpac).
- The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
- Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
- What periods can you use to measure turnover drop? Calendar months, monthly periods, longer?
At least a month or longer period can be used to measure turnover drop. For example, January 2020 turnover is compared against January 2019, OR February 2020 turnover is compared against February 2019 OR March 2020 turnover is compared against March 2019.
- Eligible employees
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are 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)
- are at least 16 years of age
- are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and are not in receipt of a JobKeeper Payment from another employer.
- Payment process. What must employers pay employees?
Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
Where employers participate in the scheme, their employees will receive this payment as follows:
- If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
- If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
- No superannuation is payable on JobKeeper scheme payment. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
- Timing of payments
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the payment from 30 March 2020 on the ATO website (see point 9 – How to apply).
- How is the subsidy payable? Single touch payroll system
For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
The Government will provide $1,500 per fortnight per employee for up to 6 months.
Payments will be made to the employer monthly in arrears by the ATO.
- Tax status of subsidy
If employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
- Businesses without employees or Sole Traders
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020.
Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
- How to Apply
Initially, employers can register their interest in applying for the JobKeeper Payment via The ATO from 30 March at: https://www.ato.gov.au/Job-keeper-payment/
Subsequently, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May.
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.
Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.
Need Help?
If you have any queries about the JobKeeper scheme, please feel free to contact our team of experienced accountants by clicking here to submit an online enquiry form, calling us on 1300 QUINNS or alternatively, +61 2 9223 9166 to arrange a teleconference or appointment.
