The government has introduced the JobKeeper Payment scheme to support businesses significantly affected by the Coronavirus. This will be administered by the ATO.
The JobKeeper payment is open to eligible employers to enable them to pay their eligible employee’s salary or wages of at least $1,500 (before tax) per fortnight. It is also open to business owners and the self-employed that have an ABN (one person per business). All JobKeeper payments are assessable income of a business, and the payments are not subject to GST. The ATO says it intends to change some aspects of the super guarantee rules to that there is no SG on additional payments to result from the scheme.
• now – Determine your eligibility for JobKeeper
• now – Employers complete Employee nomination notice for each employee
• 20 April – Enrol using the online form or via a Tax Agent
• by 30 April – Pay employees for two fortnights commencing 30 March and 12 April
• 4 May – Confirm eligible employees using the business portal or via a tax agent
Eligible employers will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee. Employers will need to pay eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper payment.
This will be paid to the employer in arrears each month by the ATO. The first payments to eligible employers will commence in the first week of May 2020. JobKeeper payments can be made for the period beginning 30 March 2020. If you pay employees monthly, then they must receive the monthly equivalent of $1,500 per fortnight.
• Businesses should ensure they meet the eligibility requirements for JobKeeper before they begin to pay employees.
• Entitled businesses must ensure that each eligible employee receives at least $1,500 per fortnight (before tax). • Employees that have been stood down must be paid a minimum of $1,500 per fortnight. • Employees receiving less than this amount will need a top up payment to $1,500 per fortnight. • Employees already receiving this amount from the employer will continue to receive their regular income according to their prevailing workplace arrangements. • For employees earning more than this amount, the employer does not have to pay them more but is able to provide them with a top-up at their discretion.
Self employed / Business owners
Sole traders, partners in partnerships, beneficiaries in trusts, shareholders of companies and directors of companies who are not employed in the business can participate in the JobKeeper scheme – but only one nominated person per entity. This applies whether or not the business has other employees, but a further qualifying factor is that the entity must have held an ABN at 12 March.
Eligibility The central measure on gaining access to the JobKeeper payments is a fall in turnover. Most businesses will qualify if facing a 30% or greater fall in turnover (the trigger is 50% for larger aggregated turnover businesses, and 15% for registered charities).
How to calculate your fall in turnover – compare:
• 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.
You only need to satisfy this requirement once – you don’t need to retest turnover each month. It is worth clarifying how GST turnover is calculated, as it doesn’t necessarily equate to what is reported on a Business Activity Statement. You will also have ongoing monthly reporting requirements.
Also the Commissioner has discretion to use another measure if the above is inappropriate (if for example the business has been operating for less than a year). Employees can be permanent full or part time, or casual if employed on a regular or systematic basis for at least 12 months at 1 March. They must also be Australian residents aged 16 or over, not receiving parental leave or workers compensation. They cannot receive payments from more than one employer. The ATO has indicated that there is more detail to come on the specifics of the JobKeeper payment.
We expect that software providers like Xero will incorporate registration into their existing Single Touch Payroll solutions – once the detail is provided we can assist.
Please call or email us to discuss how these changes will affect you.