JobKeeper: Your business may be eligible for a maximum of $19,500 per eligible employee
During the week commencing today (Monday 20 April 2020), one of our team will be in contact with all business clients to discuss your possible eligibility for the JobKeeper payment.
We are already working with a number of clients to complete this application on your behalf. If we are working with you already on COVID-19 Action Plans (CAP) then we will be working on this also.
What steps do you need to take to receive the JobKeeper payment?
Many employers around Australia are asking this same question.
In this article we go through a practical step by step approach on how to tackle the application process for the JobKeeper Payment, including what you are required to provide and what your obligations will be as an eligible employer.
Step 1: Check You & Your Employees are Eligible
Unsure if you are an eligible employer or have eligible employees? There are numerous tests that you need to go through to determine if you are an eligible employer which generally relates to a reduction in GST Turnover.
Other entities can be eligible for the JobKeeper payment if they are not an employer. The entities and one actively engaged individual could be eligible include:
- Sole trader—the individual must be the entity
- Partnership—the individual must be a partner in the partnership
- Trust—the individual must be an adult beneficiary of the trust
- Company—either a director or shareholder in the company
❓How Do I Determine a Fall in GST Turnover?
To work out your fall in turnover, you can compare either:
- Your actual GST turnover for March 2020 with your GST turnover for March 2019
- Your projected GST turnover for a relevant month in 2020 (between April & September) with your GST turnover for that month in 2019
- Your projected GST turnover for a relevant quarter in 2020 (quarters starting April 2020 or July 2020) with your GST turnover for that quarter in 2019
How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, though you can do that if it is easier. You may meet the Turnover Test if your turnover has decreased by 30% or 50% (dependent on your aggregated turnover).
If you don’t have a relevant comparison period in the 2019 year (for example your business has only recently started trading), the Commissioner can determine an Alternative Decline in Turnover Test.
Eligibility for the JobKeeper payment commences at the start of a JobKeeper fortnight. To ensure you receive a payment for a fortnight, you need to ensure you have applied for the scheme prior to that fortnight as payments will not be made retrospectively. Note there is an exception for the month of April 2020.
Step 2: Ensure You Pay $1,500 to Each Eligible Employee Per Fortnight
The JobKeeper payment is a reimbursement scheme. As a result, you are required to pay the minimum gross payment of $1,500 per fortnight for each JobKeeper fortnight to eligible employees. JobKeeper fortnights start on 30 March 2020 and end on 27 September 2020. Note: You are required to withhold tax from this payment.
For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept that 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.
If you usually pay your employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a monthly pay cycle, your employees must have received the monthly equivalent of $1,500 per fortnight.
Step 3: Notify Your Eligible Employees
You are required to notify each eligible employee that you intend to nominate them under the JobKeeper scheme. The employee must agree to be nominated by you by completing the JobKeeper Employee Nomination Notice.
Each eligible employee will need to complete and return their respective sections to you, which you keep for your records. These forms need to be provided and returned by the end of April 2020 if you plan to claim the JobKeeper payment for April.
Step 4: Enrol for the JobKeeper payment
Enrolment for the JobKeeper payment scheme will be made available on 20 April 2020. If you wish to claim the JobKeeper payment for the month of April, you must enrol by 26 April 2020.
✔️ Ensure Your Bank Details are Correct
To ensure you receive your JobKeeper payment, ensure your bank details are correct in the online enrolment process. You will also need to indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
✔️ Specify the Estimated Number of Employees
If you plan to claim the JobKeeper payment for the first two JobKeeper Fortnights (30 March – 12 April and 13 April – 26 April) you must specify the estimated number of employees for whom you intend to claim the JobKeeper payment.
Step 5: Apply for the JobKeeper payment
Application for the JobKeeper payment scheme will be made available from 4 May 2020.
❓How Will I Provide Details For My Eligible Employees In My Application?
- Selecting employee details that are pre-filled 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.
❓How Will I Know If My Application Has Been Approved?
Upon submitting the confirmation of your eligible employees online, you should receive a confirmation email or SMS showing it has been received.
Step 6: What Reporting Obligations Will I Have?
If you receive the JobKeeper payment, there are several reporting obligations, which include:
- Monthly Reporting – you are required to report your current GST turnover for the reporting month and your projected GST turnover for the following month
- Report any changes to employees – if your eligible employees change or they leave your employment, you need to notify the ATO in the next reporting period
- Reporting via Single Touch Payroll (STP) – most of the required employee information is transferred via your STP reporting obligations. If you are not yet set up to report via STP (for example you are a closely-held employer), we suggest you implement STP to ensure your application and reporting processes are streamlined.
Important Factors To Consider
- The JobKeeper payment is a reimbursement scheme to employers i.e. you must meet the minimum wage requirement of $1,500 gross per fortnight to each eligible employee.
- The JobKeeper payment is a “one in, all in” scheme i.e. if eligible, you will receive the JobKeeper payment for all eligible employees.
- Once eligible, you are not required to retest your Turnover eligibility – you will continue to receive the JobKeeper payment up until 27 September 2020 for each eligible employee.
- Applications are prospective, not retrospective i.e. you must apply before the end of a JobKeeper fortnight for the employer to be entitled to a payment for that fortnight.
- Transitional timing rules apply for the first and second JobKeeper payments (fortnights commencing on 30 March 2020 and 14 April 2020). You have until the end of the second JobKeeper fortnight (26 April 2020) to enrol for the JobKeeper scheme.
- The JobKeeper payment is assessable income to your business, however the normal deductibility rules apply to the payment to eligible employees.
- Ensuring you are STP compliant will help with the application process and your reporting obligations under the JobKeeper Scheme. If you are not yet STP compliant, we suggest implementing this as soon as possible.
You must continue to pay superannuation guarantee for any hours worked by your employees. If an employee is not working but you pay them the JobKeeper payment you do not need to pay super on this.
We can assist with the enrolment and application process or you can apply via the Business Portal.
If you would like Omnis Group to process your enrolment and application for the JobKeeper payment (which includes the assessment of whether you are an Eligible Employer and maintaining a record so that if the ATO reviews your application, you have support) on your behalf you will be invoiced.
We estimate that fees will be dependent on what is required to test the eligibility of the employer and the number of eligible employees. If you want a fixed fee, please ask for a fixed fee before we commence. Unfortunately, due to the time sensitivity of this process it would be difficult to advise everyone of the fixed fee amount before we commence.