ATO has recently released the initial JobKeeper Payment guidance. We have prepared the following to help you understand and navigate the scheme.
Is the JobKeeper Payment Scheme compulsory?
No. Employers can choose to participate in the scheme and then nominate the employees they are entitled to claim for. An employer can choose not to participate the JobKeeper payment.
Who is eligible?
Employers will be eligible if all of the following apply:
- On 1 March 2020, you carried on a business or were a non-for-profit organisation
- Employed at least one eligible employee
- Has faced at least 30% fall in turnover(turnover under $1billion)
What about Sole Traders?
Sole traders can be eligible for the JobKeeper payment if their business has experienced a downturn. ATO will provide more information soon.
What about other form of businesses, i.e trust or partnership?
Company, trust or partnership can also qualify for JobKeeper payments where a business owner, shareholder, beneficiary or partner is activity engaged in the business, and business has experienced a downturn.
It’s limited one entitlement for each entity even if there are multiple business owners or participants. ATO will provide more information soon.
Do employers need to pay their staff before getting pay for JobKeeper payment?
Employers will need to pay eligible employees a minimum $1,500 (before tax) per fortnight.
JobKeeper payment will be paid to employer in arrears each month. The first payments will commence in first week of May 2020.
How to calculate a fall in turnover?
To work out your fall in turnover, you can compare either:
- Turnover for March 2020 with March 2019
- Projected turnover for April 2020 with April 2019
- Projected turnover for the quarter starting April 2020 with the quarter starting April 2019.
Who are eligible employees?
Your employee is eligible under the JobKeeper Payment scheme if they:
- Are employed by you (including those stood down or rehired)
- Are permanent full time, part time or long term casual employee at 1 March 2020
- Were Australian resident as at 1 March 2020
- Agreed to be nominated by you
Do I need to inform my employees?
You must tell those employees that you have nominated them as an eligible employee to claim the JobKeeper payment. They must agree to be nominated by you by completing the JobKeeper employee nomination notice and returning it to you for your records.
Can I nominate my employees who were stood down or on long term leave?
Yes, employee who have been stood down from work without pay may still be eligible employees as they were in your employment on 1 March 2020. You will need to have paid them at least the minimum amount of $1500 for each fortnight you claim for, to receive the JobKeeper payment.
What about employees who have been terminated?
If you terminated an employee after 1 March 2020, you can re-engage them and they will be eligible if they met the eligibility criteria on 1 March 2020. You will need to have paid them at least the minimum amount of $1500 for each fortnight you claim for, to receive the JobKeeper payment.
What if employees normally earn less than $1,500 per fortnight?
If your eligible employees earn less than $1,500 per fortnight before tax, you must pay them at least $1,500 for each fortnight to claim the JobKeeper payment. This is a ‘top up’ of their wages and will ensure they remain eligible.
You CANNOT pay your employees less than $1,500 per fortnight and keep the difference.
What if employees normally earn more than $1,500 per fortnight?
If your eligible employees earn more than $1,500 per fortnight, you should continue to pay them their regular wages. However, you will only receive $1,500 for each eligible employee. Any amount you pay above $1,500 per fortnight is not subsidised by the JobKeeper Payment.
What actions do I need to take right now?
- Register your interest to JobKeeper Payment if you haven’t done so.
- Check if you and your employee meet the eligibility requirements.
- Continue to pay at least $1,500 per eligible employee per fortnight
- Notify your eligible employee and ask them to fill out the JobKeeper nomination notice.
- Most importantly, You or registered tax professional need to ENROL the JobKeeper Payment via business portal, by filling up online application form, with your bank details, estimated number of employees, and other details. The enrolment starts next Monday 20 April. You need to complete the enrolment by end of April.
We understand we are playing an important role in helping businesses affected by COVID-19. We want to help businesses to be able to access the JobKeeper payment to continue to pay their employees.
Here’s how we can assist you:
- Workout if you are eligible
- Identify your eligible employees
- Ensure you correctly pay your eligible employees to remain eligible
- Establish cashflow forecast for coming months
- Enrol JobKeeper Payment on your behalf
- Apply JobKeeper Payment on your behalf
Feel free to reach out if you need any assistance.