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Claiming JobKeeper

April 2020


As Australian businesses focus on JobKeeper payments to keep staff in place or bring them back onboard, the Government and the Australian Tax Office have released details about how to apply. Here's how we can help.

JobKeeper is a Federal Government subsidy that will be paid to eligible businesses impacted by COVID-19 to cover the costs of some of their employees' wages. The subsidy is worth $1500 per fortnight per eligible employee from 30 March and will be available for a maximum of six months.

As details of how to claim have been released, we strongly urge business owners to engage with their accountants to ensure that they are set up properly to claim JobKeeper.  

How will JobKeeper be paid?

Eligible employers must pay eligible employees the full amount of $1,500 per fortnight, whether they are full-time, part-time, or casual. The payments will be paid to employers as follows:

  • The ATO will pay the JobKeeper payments within 14 days of month-end

  • The first payment will be made on 1 May 2020

  • Eligible payroll periods are every 14 days from 30 March 2020

  • Monthly employer payroll reporting is required to trigger the payment

    using Single Touch Payroll. Many providers of accounting software have made change to their platforms to enable this.

Which employees are eligible?

Employers will receive the JobKeeper payments for six months from 30 March 2020 for eligible employees so long as they meet the criteria spelled out below:

  • Were employed by an eligible employer at 1 March 2020

  • Are at least 16 years of age.

  • Are an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.

The program is expected to run for six months; however payments will stop if the employee is no longer employed by the business.

What about sole traders, partnerships, trusts, or companies?

In addition to employees, JobKeeper is also available to other businesses under the business participant entitlement, for example sole traders and some other entities such as partnerships, trusts, or companies.

This can include full-time, part-time, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020.

One 'business participant' is entitled to claim the $1,500 JobKeeper payment per fortnight. In practical terms, this means that sole traders, one partner in a partnership, one beneficiary in a trust, and one director or shareholder may be regarded as eligible.

How will this impact your payroll?

If the business is planning to claim JobKeeper for staff, you must ensure that the employees you nominate for the payments are in fact eligible based on the criteria mentioned above. Further, you need to pay minimum $1,500 for each fortnight for the first two fortnights in April by the end of April in order to claim JobKeeper payments for the two fortnights in April.

Let's look at the tables below for examples:

Employees

Your employees

JobKeeper payment per employee per fortnight

Payments over the duration of the subsidy

Total payments into the business

20

$1,500

13

$390,000

Business Participants

Sole trader, partner, director, beneficiary, or single shareholder

JobKeeper payment per employee per fortnight

Payments over the duration of the subsidy

Total payments into the business

1

$1,500

13

$19,500

While this may look straightforward, there are clear criteria that employers need to be aware of and manage carefully to avoid the risk of having to repay the ATO if you get it wrong.

Managing JobKeeper obligations and risks

Making an incorrect claim – or if the ATO decides in the future that the employee was ineligible to receive the JobKeeper payment – means that the ATO will require that the JobKeeper payments are repaid in full plus penalties and interest.

Examples of where you could go wrong include claiming that business turnover is down by 30% when records indicate otherwise or that an employee was found to be ineligible because they ceased to be employed in the lifetime of the JobKeeper scheme.  

Businesses must keep records for five years.

What you need to do now

Speak to your accountant. We can help you to take the following actions:

  • Evaluate ATO requirements for your business, employees, and/or business participants
  • Assess and document the change in turnover for the specified periods to ensure you meet the 30% or 50% reduction requirement
  • Identify your eligible employees and manage JobKeeper employee nomination notification records
  • Ensure you're making the right wage payments to eligible employees
  • Support you to adapt to changes in your payroll software to correctly record JobKeeper payments
  • Ensure that you are paying the minimum $1,500 per employee per fortnight from 30 March and each fortnight until the end of the scheme.

Dates to keep on your radar

  • This is the final date you can pay your employees for the first two fortnights of April.

Steps

Dates

What You need to do

Enrolment for JobKeeper

From April 20 to May 31, 2020

  • Enrol for JobKeeper using ATO online services from 20 April 2020
  • Provide employer bank account details for receipt of JobKeeper payment
  • Confirm if applicant is entitled to a "Business Participation Payment"
  • Specify the number of employees who will be eligible for one period and the number eligible for two periods
  • Get confirmation that all employees the employer plans to nominate are eligible and the employer has notified them and has their agreement

Apply for JobKeeper Payments

From 4 May 2020

  • Apply to claim the JobKeeper payment using ATO online services between 4 May 2020 and 31 May 2020
  • Ensure all eligible employees have been paid $1,500 per fortnight
  • Identify the eligible employees from a STP prefill or by manually entering into ATO online services
  • Update your accounting system Chart of Accounts to ensure JobKeeper payments are coded correctly

Final Date to Pay Employees

8 May 2020

  • This is the final date you can pay your employees for the first two fortnights of April.

Monthly JobKeeper Declaration Report

7th day each month

  • Using ATO online services, report to the ATO using their Monthly JobKeeper Declaration Report on the following:
  • Reconfirm that your reported eligible employees have not changed
  • Input current GST Turnover for the reporting month
  • Input projected GST Turnover for the following month
  • Notify if any eligible employees have changed or left your employment

Contact us for next steps

Please contact us as soon as possible on 02 9957 4033 if you require assistance with JobKeeper as the timeline for claiming the subsidy is very short. We can support you through the process and get it moving for your business promptly.

 

 

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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