It is important to note that once you become eligible for JobKeeper and enrol then you will continue to receive payments right up until October regardless of your income between now and then. The below information is also subject to change regularly so we encourage to use the links below to keep up to date with any ongoing changes.
- Turnover of less than $1Billion and a 30% reduction in turnover (of at least a month) – with exceptions (If > $1Billion must be a 50% drop).
- 30% drop compared to the same period in 2019
- Where the business did not trade a year earlier or the turnover from 12 months ago is not representative of the current position there are 7 alternate tests that you can consider
- Must be in an employment relationship with eligible employees as at 1 March 2020 and confirm that each eligible employee is currently engaged in order to receive Jobkeeper Payments. This means that you can re-hire staff that you may have terminated after 1 March 2020 to keep them engaged with the business.
- Currently employed by the employer (including those stood down or re-hired)
- Be employed by the employer on 1 March 2020
- Are full time, part time or casuals (casuals need to have been employed more than 12 months)
- Are at least 18 years old or if they are 16 or 17 that must be financially independent
- Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
- Are not in receipt of a JobKeeper payment from another employer.
- Have received a minimum of $1,500 per fortnight (or equivalent if weekly or monthly pay cycle)
One in All in Approach
You must provide all eligible employees as per above with an employee nomination form within 7 days of your enrolment into the JobKeeper schceme.
The ATO have made it very clear that all eligible employees must be included. Therefore, if an employee on your books meets all the eligibility criteria they will need to be included unless they choose not to be nominated. They can only make this choice by marking “No” on the employee nomination form.
If the employee is eligible and elects to be nominated then you must pay them a minimum of $1,500 a fortnight.
The employee does not need to actually be working to receive the payment – they just need to be a registered employee. If the employee does work, then super is required to be paid on the amount related to the work performed and super on the excess payment to $1,500 is optional. For instance, if the employee earns $1,000 a fortnight normally, they will receive this amount with super paid on it and then they will also receive an additional amount of $500 where super is optional.
Please note that the Fair Work Act has been amended to make it illegal not to pass on the payment to all eligible employees – so if you exclude an employee who is on your books and eligible there are now substantial penalties involved anywhere from $12,600 to $126,000 per employee.
If you do not think that you can fund the payment of all employees upfront then you may need to consider whether the scheme is suitable for you or whether your employees should seek the JobSeeker payment themselves (depending on eligibility).
There have also been changes to the Fair Work Act in line with the JobKeeper scheme. If you intend to change an employee’s hours or job roles, amongst other things, you may need to consider contacting an employment lawyer as this area is quite complex. We have provided a link to some information below.
To be eligible for Jobkeeper payments in April you can compare any of the following to determine if you have had a 30% drop in income under the basic test:
- March 2020 v March 2019
- April 2020 v April 2019
- Projected June 2020 Quarter v June 2019 Quarter
However to be eligible for April’s payments there are some very important dates:
- All employees must have been paid the minimum of $1,500 per fortnight for April ($3,000 for the month) before the 8th of May.
- You must enrol in the JobKeeper scheme before 31st May
- Once enrolled you can lodge your first monthly report – payments will not start until the report is lodged – must be lodged by 31st May for April
- If you have processed a pay cycle already and did not pay an employee the minimum you are entitled to process a further pay for that same period as a backpay amount to take them up to the minimum of $1,500. This will need to be done before the 8th of May.
May Eligibility and ongoing
You can enrol in the JobKeeper scheme in any future month once you meet the criteria. From May onwards you will need to consider the following for your eligibility tests:
- The month in 2020 compared to the same month in 2019 – ie if the test month is May 2020 then you look at May 2020 and May 2019
- The projected 2020 quarter that the month falls in compared to the same quarter in 2019 – i.e if the test month is May then you compare projected June 2020 quarter against June 2019 quarter
- Each eligible employee must be paid a minimum of $1,500 gross wages per fortnight on a date that falls within the ATO’s JobKeeper fortnights – ie the JobKeeper fortnights in May run from 27th April to 10th May and 11th of May to 24th May. There is no extension of time to pay the employees from May onwards – it must fall within these date ranges.
There are 6 scenarios where the ATO will allow an alternate test – as these tests can be complicated we encourage you to contact us to discuss them further if you believe that you are eligible:
- Entity is new to business and does not have a comparative month in the prior year as they were not trading
- The business has acquired or disposed of a part of their business in the last 12 months that has changed their turnover so the comparative month in the previous year does not give a fair comparison
- The business has undertaken an internal restructure in the last 12 months that has changed their turnover so the comparative month in the previous year does not give a fair comparison
- The business has experienced a substantial increase in turnover over the last 12 months so the comparative month in the previous year does not give a fair comparison
- 50% or more than 12 months ago
- 25% or more than 6 months ago
- 12.5% or more than 3 months ago
- Business was affected by drought or other natural disaster during the comparative period in 2019 so the comparative month in the previous year does not give a fair comparison
- Business has irregular turnover that is not cyclical or seasonal
Payroll Set Up – Critical to receiving the payment
The various software providers have now released the payroll set up requirements within their software packages in order to ensure that STP reports the payments correctly. Their advice has been that if the payroll is not set up as per their instructions then there is a high risk of the payments being delayed or worse case scenario not being eligible to receive them at all.
As most of you would have processed the pay runs in April already, there is a requirement to amend these pay runs to reflect the payments correctly – this must be done before the 8th of May. We have provided the links below for Xero, MYOB and Quickbooks that outline their instructions on how to set it up correctly and how to amend the April pay runs that have already been posted.
Self Employed – Sole Trader, Partnership, Trust or Company
This is only relevant for those individuals who do not get paid salary and wages from their business.
Only one person can be nominated to receive the payment if you are self-employed as a sole trader, partnership, trust or company. In order to be eligible there must be an individual as the director, shareholder or beneficiary.
The individual must also be actively working in the business and cannot be an employee (other than a casual) of any other businesses – i.e. you can’t hold a job (other than as a casual) and claim the JobKeeper payment for a business you run as a side project.
There is no need for the business to pay that nominated person the $1,500 prior to receiving the reimbursement. The payment will also be made to the business and can be used however the business chooses – ie you do not need to forward it onto the nominated individual.
Further Information – please note these links are updated daily
https://coronavirus.fairwork.gov.au/ – for Fair Work amendments