JobKeeper Payment

Updated: 17/08/2020

We hope you and your families are moving through this challenging time healthy and happy. We trust the JobKeeper Payment will be of help to many of you, whether a needed subsidy to your business or supporting keeping your job.

This scheme is the Government’s largest of the stimulus packages, to be paid and administered by the ATO. It passed parliament and the ATO have been rolling out the monthly payments since April.

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The JobKeeper Payment was available to eligible business owners/employers from 30/03/2020 until 27/09/2020 (extended until 28/03/2021) who suffered a downturn due to the interruption that is the COVID-19. Employees wages will be subsidised by $1,500 gross, per fortnight per eligible employee, including the business owner even if you don’t have employees. This $1,500 will begin to reduce under the JobKeeper extension.

The intention behind the JobKeeper Payment is to help employers stay connected to their employees by assisting the cashflow for wages. Employees will benefit from keeping their job and receiving a minimum income during this turbulent time when unemployment is heightened, making the JobKeeper a more lucrative alternative to Centrelink’s JobSeeker.

EMPLOYERS

Your business (SME) will be eligible if it has suffered a 30% downturn and you’re still paying your eligible employees the equivalent of the JobKeeper payment per fortnight.

The ATO’s notes on how to apply the turnover test to calculate your downturn for eligibility is here: https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/JobKeeper-tests/Applying-the-turnover-test/
More info on employee eligibility here: https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Your-eligible-employees/
NB: From fortnight starting 3rd August, the date of employment required moved from 1 March to 1 July 2020 which may increase the eligibility for some of your staff.
More info here: https://www.ato.gov.au/general/jobkeeper-payment/employers/

The application pathway has commenced for eligible employers:

Notify employees of your intent to claim for them by providing the ATO’s JobKeeper Employee Nomination Notice to be completed and retained for your records or Nominate a Business Participant (owner) if a company or trust. Not required for sole traders.
Enrol and Apply as soon as you feel the 30% downturn in your sales, if you aren’t already in the scheme. You have until October (for September’s final payment) before the JobKeeper Extension eligibility requirements set in.
An ongoing monthly declaration must be submitted between 1st and 14th of each month for the previous month.
Click here to watch the ATO’s video on this.

We’re here to help you work out the mechanics of your eligibility and can handle the Application and Declaration process for you as your tax professional so you don’t have to worry. Ask us about our JobKeeper Payment Application Package.

More info here to enrol and apply: https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Enrol-and-apply-for-the-JobKeeper-payment/

Please note:

The JobKeeper Payment is considered taxable income and will need to be included within your business’ tax return. It’s not GST applicable.
The JobKeeper Payment has been extended from 27/09/2020 until 28/03/2021 under re-testing eligibility and on the down slide. More info here.
*The JobKeeper Payment is paid monthly in arrears so you must have made the minimum payment to your employees for the equivalent of a $1,500/fortnight gross each month before receiving the JobKeeper subsidy payment. See the table below for examples of minimum amounts required to be paid per employee.

Effectively, your cashflow needs to be able to support the wages before you’re able to receive the JobKeeper subsidy; and

The after-tax portion of the JobKeeper Payment must be passed on in full to your elected employees. Excess amounts cannot be retained.

For example, if Anne’s part-time wage is $500/week gross then she’ll have to be paid $750/week gross to match the JobKeeper payment received on her behalf. You may wish to consider negotiating additional hours or responsibilities to account for this “pay-rise” in accordance with Fairwork standards. See more info here: https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/flexibility-in-workplace-laws-during-coronavirus/jobkeeper-changes-to-the-fair-work-act
Superannuation Guarantee won’t be required to be paid on any top-up portion made to employees if their normal wage is less than the equivalent $1,500/fortnight gross. In Anne’s case, super will only be payable on her $500/wk, not the extra $250 if her duties or hours aren’t increased to compensate. We will update this information once legislation or regulations are formally in place.
For employees working and paid over the JobKeeper minimum amount, no further payment is required. In this case, the JobKeeper payment is designed to subsidise the wage expense to the business.

The structure in which you operate your business will not prevent eligible business owners from receiving at least one JobKeeper Payment as a “business participant”, regardless of if you’re an employer, i.e.:

A sole trader;
More info: https://www.ato.gov.au/general/jobkeeper-payment/sole-traders/
One director/shareholder of a company;
One individual beneficiary of a trust; or
One partner of a partnership.

More info here: https://www.ato.gov.au/general/jobkeeper-payment/Partnerships,-trusts-and-companies/

CASHFLOW MANAGEMENT
Talk to us if you’d benefit from a Cashflow Management Plan. If you’re struggling to keep your staff on, had to stand down employees or close/hibernate your business but want to opt in for JobKeeper Payments, you’ll need to commence the wage payments before receiving the JobKeeper reimbursement which will be tough on your cashflow. We’d like to help you with this to ensure cashflow certainty so please reach out.

SINGLE TOUCH PAYROLL
On a side but still important note, if you’re using Single Touch Payroll (STP) in your accounting software (which you should be by now), this entire process will be much easier and cost/time effective.

BOOKKEEPING FOR THE JOBKEEPER PAYMENT

If you’re a bookkeeper or handle the software and payroll processing for your own business, you’ll need to know how to account for the JobKeeper subsidy deposits and payroll processing.

The following tasks need to be completed to properly setup JobKeeper. Feel free to ask us to help setup/process these new areas.

Create a new ‘JOBKEEPER-SUBSIDY’ income account, No GST.
Create the ‘JOBKEEPER-TOPUP’ payroll category as required and process catchup payments.
Create a pay category for the ‘JOBKEEPER-START-FNxx’ for the first STP election.
Create a pay category for the ‘JOBKEEPER-FINISH-FNxx’ for the final STP cessation, if ended before the final JobKeeper payment on 27/09/2020.

Software provider support notes below to assist:

Are you feeling overwhelmed with how this JobKeeper works? Please reach out for clarity. We are available to you via phone, email and Skype/Facetime on 0437 529 523.