Job Keeper Payment. Help for Business and sole-traders.
Good news is that The JobKeeper payments will be available from 4 May, back-dated to start from 30 March 2020. The new scheme forms part of the government’s third economic assistance package which totals $130 billion.
How does it work?
Eligible employers will receive a fortnightly payment of $1,500 to pay each eligible employee that was in their employment on 1 March 2020 and is retained or continues to be engaged by the employer. Every eligible employee must receive at least $1,500 per fortnight before tax, for a maximum period of 6 months.
The ATO will administer the payment. Businesses can enrol and apply for the JobKeeper payment on the ATO website.
Treasurer Josh Frydenberg said: “This $1,500 payment is a flat payment and is the equivalent of around 70% of the median wage and represents about 100% of the median wage in those sectors most heavily impacted by the coronavirus like retail, hospitality and tourism.”
Who is eligible?
Eligible employers are businesses (including companies, partnerships, trusts, sole traders), not for profits and charities:
• with a turnover of less than $1 billion whose turnover has fallen by more than 30% (of at least one month); OR
• with a turnover of $1 billion or more whose turnover has fallen by more than 50% (of at least one month).
• Big banks subject to the Major Bank Levy are not eligible.
Eligible employees include full-time, and part-time employees, including stood down employees. Where a casual employee has been with their employer for at least the previous 12 months, they will also be eligible for the payment.
The subsidy will include not for profit employees and New Zealanders who work in Australia but are typically unable to access welfare support.
Self-employed individuals are also eligible to receive the JobKeeper Payment.
The subsidy is aimed at preventing workers from being stood down.
How does an employer establish a 30% (or 50%) fall in turnover?
Most businesses need to establish that their turnover has fallen in the relevant month or three months relative to their turnover a year earlier in 2019. (This also depends on the natural activity statement reporting period of that business)
However, where a business’s turnover a year earlier is not representative of their usual or average turnover, (e.g. because there was a large interim acquisition or their turnover is typically highly variable) the Tax Commissioner will have discretion to consider additional information. The business will need to provide information to establish that they have been significantly affected by the impacts of COVID-19.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business has ceased or significantly curtailed its operations).
There will also be some tolerance where employers, in good faith, estimate a greater than 30 % (or 50%) fall in turnover but actually experience a slightly smaller fall.
What if my business has been trading for less than 12 months?
If a business has not been in operation for a year and therefore cannot show that turnover has fallen relative to a year earlier, the Tax Commissioner can consider additional information from the business to establish that they have been significantly affected by the impacts of COVID-19.
WHAT IS JOBKEEPER APPLICATION PROCESS?
From 20 April 2020 employers (or your 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).
How to claim payments for your eligible employees
From 4 May onwards you (or your registered tax agent) will be able to apply for the JobKeeper payment for your eligible employees.
Step 1 – Apply to claim the JobKeeper payment by logging in to the ATO Business Portal
Step 2 – Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.
Step 3 – Identify your eligible employees in the application form by:
- selecting employee details that are prefilled from your STP 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.
Step 4 – Submit the confirmation of your eligible employees online and wait for the confirmation screen.
Step 5 – Notify your eligible employees you have nominated them.
Step 6 – We will pay you the JobKeeper payment for all eligible employees after receiving your application.
Step 7 – 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. 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.
Step 8 – If your eligible employees change or leave your employment, you will need to notify us through your monthly JobKeeper Declaration report.
If you use the ATO Business Portal, you will need a myGovID linked to your ABN in relationship Authorisation Manager (RAM). You can find out how to set this up at ato.gov.au/mygovid
For more information on the payment, read the Australian Government’s fact sheet.
MORE INFORMATION FOR BUSINESSES
Businesses with employees
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO. An employer that elects to participate is required to include all eligible employees in the scheme.
Participating employers will be required to ensure eligible employees receive, at a minimum, $1,500 per fortnight before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
Businesses without employees
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment at ato.gov.au.
Businesses without employees will need to:
- provide an ABN for their business
- nominate an employee to receive the payment and provide that employee’s Tax File Number
- provide a declaration as to recent business activity.
The payment will be made monthly to that person’s bank account. Further details for the self-employed are in the Support for Sole Traders factsheet.
There are a number of obligations employers must comply with before they can receive the JobKeeper payment. Read the Australian Government’s fact sheet dedicated to employers for a breakdown of these obligations.
For businesses with apprentices and trainees, visit our FAQs page to learn more about how this impacts your business.
MORE INFORMATION FOR EMPLOYEES
There are a number of obligations employees must comply with before they receive the JobKeeper payment. Read the Australian Government’s fact sheet dedicated to employees for a breakdown of these obligations.
Apprentices and trainees may also be eligible for the JobKeeper Payment. Visit our FAQs page to learn more.
Australian Tax Office –JobKeeper Payment
I hope this information is useful for you and is able to help with some much-needed relief.
If you’d like to have a chat about organising your finances so that you can stay on track towards your financial goals as much as possible during and beyond this crisis then please get in touch. Apply for a discovery session using the enquiry form on this page.