The ATO has released a large amount of information and further detail relating to the JobKeeper Payment on their website. The three areas that we will focus on are:
- Employer Eligibility Criteria
- Employee Eligibility Criteria
- Enrolling in the JobKeeper Payment (from 20 April)
Most of the information below is taken directly from the ATO website and is accurate at the time of this article being published. For further information please visit the ATO JobKeeper web page.
Before we go into the three points above, below are some key points on the JobKeeper payments:
- If you are a business expecting a JobKeeper payment for the month of April you should already be paying your employees $1,500 per fortnight. You must ensure that your business is eligible first.
- For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by you 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
- 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 if you are using one.
- Ensure your payroll system has the appropriate pay codes and descriptions setup to make the payments. You will need to contact your Software provider to clarify this.
- Determine your businesses eligibility and ensure you have adequate documentation to prove that you are eligible and your fall in turnover is due to COVID-19.
- Pay your employees the correct amount and in accordance with the JobKeeper fortnights. Please contact us if you require further information about how and when to pay.
- Sole Traders and Business Owners who are not employees but actively involved in their business are also eligible. We will provide further information soon about the eligibility.
Employer Eligibility Criteria
Employers will be eligible for the JobKeeper payment if all of the following apply:
- On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
- You employed at least one eligible employee on 1 March 2020.
- Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
- Your business has faced a
- 30% fall in turnover (for an aggregated turnover of $1 billion or less)
- 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
- 15% fall in turnover (for ACNC-registered charities other than universities and schools).
- Your business is not in one of the ineligible categories.
Most Businesses will be subject to the 30% decline in turnover test to be eligible for the JobKeeper Payment.
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.
If your business does not qualify now, it may qualify in the future so it is important to monitor your trading and projections regularly.
If your business does not have a comparable period, for example because your business is newly established, the Commissioner of Taxation will have discretion to set “Alternative Tests”. Further information on the alternative tests is not yet available and will be released by the ATO in due course.
Please note that the ATO have advised that they will be expecting you to have strong records to prove that your business meets the eligibility criteria. If you are audited in the future and can not prove your eligibility, penalties will apply and there may be a requirement to repay the JobKeeper payments back to the ATO.
Employee Eligibility Criteria
You are an eligible employee if you:
- are currently employed by the eligible employer (including if you were stood down or re-hired).
- were for the eligible employer (or another entity in their wholly owned group), either a
- permanent full-time or part-time employee at 1 March 2020
- long-term casual employee (employed 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.
- were aged 16 years or older at 1 March 2020.
- were either
- an Australian resident (within the meaning of the Social Security Act 1991) – visit the Services Australia website and read residence descriptions for more details
- an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
- were not in receipt of any of these payments during the JobKeeper fortnight
- government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010
- a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.
If you started work with your current employer after 1 March 2020, your employer will not be eligible to claim the JobKeeper payment on your behalf.
Enrolling in the JobKeeper Payment (from 20 April 2020)
You or a registered tax professional can enrol for the JobKeeper payment:
- Step 1 – Register your interest and subscribe for JobKeeper payment updates.
- Step 2 – Check you and your employees meet the eligibility requirements.
- Step 3 – 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).
- Step 4 – 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.
- Step 5 – 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 if you are using one.
- Step 6 – 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.
- Step 7 – 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.
- Step 8 – 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).
If you prefer to engage our office to administer the JobKeeper program on your behalf with the ATO please click here and opt-in. We will then contact you with further information.