JobKeeper Payment Update:
Think of this payment as a subsidy to the employer from the Government to continue paying their employees.
Each eligible employee receives at least $1,500 per fortnight (before tax). If they were already being paid this amount from the employer then their income will not change. If they were receiving less than this amount, the employer will top up the amount paid to them to the $1,500 (before tax).
Effective from 30 March 2020 and is for a maximum period of 6 months but the payments backdated to 1 march 2020.
To be eligible employers, businesses must:
– Have turnover of less than $1 billion
– Have experience a drop in income of 30 per cent; and
– Must have had eligible employees as at 1 March 2020; and
– Confirm that each eligible employee is still engaged by the business.
Eligible Employees are employees who:
– Are currently employed, stood down or re-hired by the eligible employer; and
– Were employed as at 1 March 2020; and
– Are full-time, part time or long-term casuals (longer than 12 months); and
– Are an Australian citizen or a holder of a permanent visa or certain other specific visa holders; and
Who are not eligible?
Casuals who have worked for an employer for less than 12 months and temporary visa holders who are not New Zealanders (visa holders 444) are not eligible for the JobKeeper scheme.
How the 30% drop in income will be calculated?
For most businesses, they will be required to show a 30% decline in ‘projected GST Turnover’ to be an eligible employer. Turnover will be defined according to the current calculation for GST purposes and is reported on Business Activity Statements ie. relevant quarter starting on 1 April 2020 or 1 July 2020 versus the same quarter last year or relevant calendar month ending after 30 March 2020 and before 1 October 2020 versus the same month last year;
It is useful to understand the data the ATO will be using to measure this test. We expect this will be code G1 on the BAS which is where you disclose your total sales for the period but we also note the requirement for employers to report monthly [within 7 days] their actual turnover. The ATO has also been given the authority to use alternative tests or apply their discretion when the tests are not appropriate. This is important for new businesses, businesses that grew significantly during the year, businesses acquired during the year or those that have been restructured during the year.
My turnover has not decreased by 30% this month, but I believe it will in the coming month. Am I eligible?
You can apply for the payment if you reasonably expect that your turnover will fall by 30 per cent or more relative to your turnover in a corresponding period a year earlier.
What are the eligible payment periods for reimbursement for a Jobkeeper subsidy?
Employers will need to satisfy payment requirements for their eligible employees in respect of each 14 day period covered by the scheme. The first period starts on Monday 30 March 2020 and ends on Sunday 12 April 2020. The final period will start on Monday 14 September 2020 and end on Sunday 27 September 2020.
When will I receive the first payment?
The first payments by the ATO will be received by employers in the first week of May. The payments will be made by the ATO monthly in arrears.
If I stood down my employees after 1 MARCH 2020, and are no longer paying them, do I need to pay them, for what period and when?
Yes. You can claim JobKeeper for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them a minimum of $1,500 per fortnight (before tax) for the payment periods of the JobKeeper Scheme. The first payment period under the scheme is from 30 March 2020 to 12 April 2020.
If I have stood down my employees without pay after 1 March 2020 can I “Back Pay” them to 30 March 2020?
Yes. If you want to claim the JobKeeper Payment for your employees you will need to confirm your eligible employees want to be part of the scheme and arrange for them to be paid a minimum of $1,500 per fortnight before tax from 30 March 2020.
I hired a NEW employee after 1 March 2020. Can I receive the Jobkeeper payment for them?
No. The employee must have been engaged as of 1 March 2020.
Payment and pay cycle process:
You should pay eligible employees in line with your existing pay amounts and pay cycle and meet these requirements:
• You should 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.
• You will be able to keep the same pay cycle (as it is in XERO/MYOB/QB).
• For the first two fortnights (30 March – 12 April and 13 April – 26 April), ATO will accept 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 for each fortnight to claim the JobKeeper payment. This ‘top up’ of their salary or wages will ensure you remain eligible.
• You’ll not be eligible for the JobKeeper payment if you pay their nominated employee less than $1,500 before tax per fortnight.
• If your eligible employees earn more than $1,500 per fortnight, you’ll only receive $1,500 for each eligible employee and you should pay any additional balance themselves.
• If an employee has been stood down after 1 March, and if you re-engage them, you must pay their eligible employee at least $1,500 per fortnight before tax. You will only be eligible to claim for the fortnights after you’ve re-engaged your employee within the pay period.
• You cannot claim the reimbursement for the JobKeeper payment for employees who were not paid the full amount during each JobKeeper payment period.
• You need to continue to pay employees for either every subsequent fortnight until 27 September 2020 or until your employees stop being eligible or your client opts out.
• The JobKeeper payment is a reimbursement from the ATO to you and cannot be paid in advance.