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JobKeeper ATO Update

Posted 15 Apr '20

JobKeeper ATO Update

By Matthew Moloney

The ATO have released further details on the JobKeeper payment.

Eligible employers:

  • On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
  • You employed at least one eligible employee on 1 March 2020.
  • Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
  • Your business has faced a 30% fall in turnover (for a business with aggregated turnover of $1 billion or less)
  • Your business is not in one of the ineligible categories.

How to determine a fall in turnover

At the time you enrol in the JobKeeper payment scheme, you need to confirm that your business in a relevant period has had, or is likely to have a 30% fall in turnover

To work out your fall in turnover, you can compare:

  • GST turnover for the month of March 2020 with GST turnover for March 2019
  • In the period for which the test is being applied, the projected GST turnover for the months of April, May, June, July, August and September 2020 with the GST turnover for the corresponding month from 2019
  • In the period for which the test is being applied, the projected GST turnover for the quarters starting 1 April or 1 July 2020 with the GST turnover for the corresponding quarter from 2019

How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, although you can do that if it is easier.

You only need to satisfy this requirement once – you don't need to retest turnover each month. 

If an entity does not qualify for March 2020 or April 2020, because its turnover has not been sufficiently affected, it can test in later months to determine if the test is met. This allows entities that only become affected part way through the six month period of operation of the JobKeeper scheme to continue to monitor for any decline in turnover until they qualify for the scheme in a later period.

The Commissioner of Taxation also has the discretion to set out alternative tests that can establish your eligibility when turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year or had a major acquisition). The ATO will release more information regarding alternate tests shortly.

Are you a sole trader or does your business operate through a company, trust or partnership?

  • Sole traders can be eligible for the JKP if their business has experienced a downturn according to the eligibility criteria.
  • Other businesses that trade in a company, trust or partnership can also qualify where the business owner is actively engaged (a shareholder / director, adult beneficiary or partner). There is a limit of one entitlement for each entity even if there are multiple business owners. An individual can only benefit from one JKP.  So if a business owner is also an employee (either of the business or someone else’s business) they cannot receive the payment twice

The ATO will release further information regarding the eligibility for these entities shortly.

Who are your eligible employees?

  • Are employed by you (including those stood down or re-hired)
  • were either a
    • permanent full-time or part-time employee at 1 March 2020; or
    • long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer
  • were at least 16 years of age on 1 March 2020
  • were an Australian resident as at 1 March 2020
  • were not in receipt of any of these payments during the JobKeeper fortnight:
    • government parental leave or Dad and partner pay
    • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work
  • agree to be nominated by you

Further information regarding eligible employees can be found here: https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Your-eligible-employees/

How, when and how much do I pay my employees? 

  • Where you meet the turnover test, you need to continue or re-start paying your eligible employees at least $1,500 a fortnight in line with your existing pay cycle
  • You should pay your employees for each JobKeeper fortnight you plan to claim for. The first fortnight is from 30 March – 12 April and each JobKeeper fortnight follows after that.

For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept 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.

Further information regarding paying your employees can be found here: https://www.ato.gov.au/General/JobKeeper-Payment/Payment-rates/Paying-your-eligible-employees/

 When will I receive the JKP reimbursement amount? 

  • The first payments from the ATO will be received by employers from the first week in May 2020
  • Subsequent payments will be made by the ATO monthly in arrears

 What steps you need to take: 

Enrol for the JobKeeper Payment from 20th April onwards

  • Step 1 – Register your interest and subscribe for JobKeeper payment updates.
  • Step 2 – Check that you meet the fall in turnover test and your employees meet the eligibility requirements.
  • Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April)
  • Step 4 – Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
  • Step 5 – Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April and keep a copy on file.
  • Step 6 – From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal. You must do this by the end of April to claim JobKeeper payments for April.
  • Step 7 – In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
  • Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

Confirm the Eligible employees for which you will claim the JobKeeper payment from 4th May onwards

  • Step 1 – Apply to claim the JobKeeper payment by logging onto the ATO Business Portal.
  • Step 2 – Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.
  • Step 3 – Identify your eligible employees in the application form by
    • selecting employee details that are prefilled 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, or
    • using a registered tax agent who will submit a report on your behalf through Online services for agents.
  • Step 4 – Submit the confirmation of your eligible employees online and wait for your confirmation email or SMS showing it has been received.
  • Step 5 – Notify your eligible employees you have nominated them.
  • Step 6 – The ATO will pay you the JobKeeper payment for all eligible employees after receiving your application.
  • Step 7 – Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via your registered tax agent. This will ensure you will continue to receive the JobKeeper payments. You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.
  • Step 8 – If your eligible employees change or leave your employment, you will need to notify the ATO through your monthly JobKeeper Declaration report.

We will keep you updated as further information is released, in the meantime contact your WDF team member if you have any questions – we are here to help.

Matthew Moloney

Director




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