With the ATO issuing a warning to get moving on JobKeeper payment applications, it’s time to check your eligibility and talk to your employees. But what exactly is the JobKeeper Payment Scheme and how does help you and your business?
Let’s do a quick rundown:
What is the JobKeeper Payment Scheme?
JobKeeper is a government payment scheme set up to support businesses significantly affected by the COVID-19 outbreak. The intention of the $130 billion initiative is to help employers pay their staff during a time of shut down or reduced capacity.
Eligible employers will receive a fortnightly payment to help pay the salaries and wages of each eligible employee.
Employer eligibility
As expected, not all businesses are eligible for JobKeeper payments. As an employer you must meet certain criteria.
All the following must apply:
- Your business objective is primarily focused within Australia
- Your business hired at least one eligible employee at March 1 2020
- Those employees are still in your employ
- Your business has experienced:
- a 30% fall in turnover for businesses with a $1 billion turnover or less.
- a 50% fall in turnover for businesses with more than a $1 billion turnover.
- Or a 15% fall in turnover for ACNC registered charities (excluding universities and schools).
- Your business is not in one of the ineligible categories.
How to calculate a fall in turnover
To work out your fall in turnover percentage to establish eligibility for JobKeeper payments, compare one of the following:
- GST turnover March 2020 to March 2019.
- Projected GST turnover for April 2020 against April 2019.
- Or the projected quarter of April 2020 to April 2019 quarter.
Note: You only need to satisfy this requirement once not every month.
How do employers participate in the JobKeeper Payment Scheme?
To participate in the scheme, apply to the Australian Taxation Office (ATO) with supporting information demonstrating the downturn in your business. In addition, employers must report the number of eligible employees employed by the business on a monthly basis. Online applications opened on April 20 2020 so you should enroll and subscribe to JobKeeper Payment Updates as soon as possible.
Both employers and employees also need to complete the JobKeeper employee nomination notice. Although it is not necessary to send this form to the ATO, you should keep the document as a record that your employee(s) have agreed to you claiming the payment for them.
Note: The Commissioner has recently extended the deadline for enrollment for April payments to 31 May 2020.
- Provided you meet all the eligibility requirements, if you enrol by 31 May you will still be able to claim for April and May fortnightly payments you made.
Employers must pay a minimum of $1,500 (before tax) per fortnight to each eligible employee. The government will repay that amount to eligible employers monthly, in arrears. Although payments are backdated to 30 March 2020, payments won’t start until the first week of May.
Sole Traders
Some Sole Traders may be also be eligible for payments but the details are still a little sketchy. Consequently, Sole Traders are encouraged to enroll and subscribe to JobKeeper Payment Updates to stay across updates and eligibility.
How does the scheme work for employees?
Registered employers, with eligible employees, receive $1,500 per fortnight, for up to six months, from the ATO. You must pay this full amount as a minimum to each employee.
Employee eligibility
Your employees must be eligible for you to be able to claim JobKeeper payments.
Employees are eligible if they are:
- Currently employed by you as a permanent full time employee at 1 March 2020
- Or a long term casual employee (employed regularly for a minimum 12 months) NOT employed as a permanent employee elsewhere.
- 16+ years old
- An Australian resident (read more here)
- Not receiving government parental leave or Dad and partner pay or an incapacity payment.
JobKeeper Payment Scheme Summary
- The Jobkeeper payment scheme will support businesses affected by COVID-19 by supplementing staff wages with a $1500 a fortnight payment.
- Employers should act quickly to:
- Establish whether or not they are eligible to receive the payments
- Discuss the payment scheme with employees and complete the JobKeeper employee nomination notice.
- Enroll and subscribe to JobKeeper Payment Updates with the ATO
Need some help?
Understandably, though this is a good opportunity for any struggling business to grasp right now, it may all seem a little confusing. Life and business is complicated enough at the moment, so give our team a call or contact us online. Our accountants are more than happy to establish your employer and employee eligibility, go through your obligations and help you apply for the JobKeeper payment scheme.
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