Last updated: 23 July 2020
The Australian Government's JobKeeper Payment is for eligible businesses, to help them retain employees during the COVID-19 crisis and recover quickly afterwards. While businesses are strongly encouraged to contact their accountants to discuss their eligibility, this is what we know so far.
Which small businesses are eligible for the JobKeeper Payment?
Australian businesses that are structured as companies, partnerships, trusts and sole traders, as well as not-for-profit entities and charities, are eligible if they meet the following criteria:
- their business turnover is less than $1 billion and it will be reduced by more than 30 per cent compared to a period (of at least a month) a year ago and the business is not subject to the Major Bank Levy
- turnover will be defined according to the current calculation for GST purposes and is reported on Business Activity Statements (BAS)
- if the business was not operating a year ago, or if turnover a year earlier was not representative of their usual or average turnover, the Tax Commissioner will have discretion to consider additional information that establishes the business has been adversely affected
- eligible employees must have been employed by them as at 1 March 2020 and be currently engaged.
The JobKeeper Payment operates on a ‘one in, all in’ principle, meaning that businesses applying for the payment must include all eligible employees. Eligible businesses must register online with the ATO for the JobKeeper Payment on behalf of their nominated employees (including themselves) and provide monthly updates to the ATO.
Employers must also notify all potential eligible employees that they have enrolled in the JobKeeper program, within seven days of doing so. Employers who had registered on or before 1 May, have until Friday 8 May to provide this notice. Failure to provide the notice to employees may result in a penalty of $4,200 per instance.
Which employees can receive the payment?
- Employees must be an Australian citizen, 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.
- The payment is available for full-time, part-time or long-term casual employees (a casual employed on a regular basis for longer than 12 months as at 1 March 2020) who are 18 years or over, or 16 and 17 year olds who meet additional eligibility criteria.
- They cannot be receiving the JobKeeper Payment from another employer.
- They cannot be in receipt of government parental leave or Dad and Partner Pay under the Paid Parental Leave Act 2010, or a payment in accordance with Australian worker compensation law for an individual's total incapacity for work during the JobKeeper fortnight.
- It may affect their eligibility for other Services Australia payments as the JobKeeper Payment is to be reported as income.
- Employees must give their employers notice that they agree to be their eligible employee, after the employer has advised them they have enrolled in the JobKeeper Program. This can be done by the employee completing the JobKeeper Employee Notice Form (Sections B and D) and returning it to their employer by e-mail.
Businesses can claim the JobKeeper Payment for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them at the following rates:
- Until 27 September 2020: a minimum of $1,500 per fortnight (before tax)
- From 28 September 2020 to 3 January 2021: $1,200 per fortnight for full-time employees and $750 for employees who work less than 20 hours a week.
- From 4 January 2021 to 28 March 2021: $1,000 per fortnight for full-time employees and $650 for employees who work less than 20 hours a week.
The ATO’s JobKeeper Employee Nomination Notice has been amended to include additional eligibility requirements for 16 and 17 year olds. People who were 16 or 17 on 1 March 2020 can qualify for JobKeeper fortnights before 11 May 2020, but continue to qualify after that only if they are independent (as defined by the Social Security Act) or not undertaking full- time study. Workers aged 16 or 17 years old who had previously lodged a JobKeeper Employee Nomination Form, will need to complete a new ATO nomination form including Section C: Additional requirements for 16 and 17 year olds.
What is the eligibility test?
If a business does not meet the turnover test at the start of the JobKeeper program on 30 March 2020, they may start receiving the JobKeeper Payment later, once the turnover test has been met. In this case, the payment is not backdated to the start of the scheme.
A new eligibility test will be required for businesses to retain JobKeeper Payments beyond 27 September 2020. Businesses will need to demonstrate a 30 per cent reduction in turnover in both the June and September quarters to remain eligible for payment in December, and continue to demonstrate a 30 per cent reduction in turnover to keep JobKeeper Payments for their employees until March 2021.
For more information read the JobKeeper section on the ATO website or call them on 1800 806 218.
What if I am self-employed?
Sole traders are eligible for the JobKeeper Payment but must meet certain eligibility criteria. Other eligible businesses can nominate only one working director, partner, beneficiary or shareholder, as well as, any eligible employees.
All businesses, including people who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
Do I need to top up my employee’s pay?
If an employee usually earns more than the JobKeeper Payment the employer is expected to top up their wage payment and pay superannuation as normal. Employers will be legally obliged to pass the payments in full to their employees. The ATO has provided the following examples:
- If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income from their employer according to their workplace arrangements. The JobKeeper Payment acts as a subsidy.
- If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee a minimum of $1,500 per fortnight, before tax.
- If an employee has been stood down, their employer must pay them at a minimum, $1,500 per fortnight before tax.
- If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then was re-engaged by the same eligible employer, they will receive a minimum of $1,500 per fortnight, before tax.
Seek advice from an HR professional and accountant for specific advice on payments to your employees.
Am I required to pay PAYG withholding and superannuation on the JobKeeper Payment?
You must pay the minimum JobKeeper Payment amount (before tax) per fortnight to your eligible employees, withholding income tax as appropriate. If an employee is paid more than this amount per fortnight, your superannuation obligations will not change.
Where an employee is having their wages topped up to the minimum amount per fortnight by the JobKeeper Payment, it will be up to the employer if they want to pay superannuation on any additional wages paid by the JobKeeper Payment.
You cannot use the JobKeeper Payment towards superannuation contributions.
What reporting do I need to do while receiving the JobKeeper Payment?
Each month, you (or your BAS agent) must make a business monthly declaration to the ATO to reconfirm your eligibility and indicate how your business is progressing in relation to the JobKeeper Payment scheme.
Each month you need to:
- ensure you have paid your eligible employees the JobKeeper Payment amount (before tax) per fortnight that you’re claiming
- check if the circumstances of eligible employees you are claiming for have changed or whether they have left your employment. If there are any changes you must update these details before completing your monthly declaration.
- using your myGovID login go to the ATO business portal then:
- select ‘Step 3 – Business monthly declaration for JobKeeper payment’ from the COVID-19 page
- provide your current and projected GST turnover
- reconfirm your eligible employees
- reconfirm your contact and bank details for receiving JobKeeper payments.
Visit the ATO’s JobKeeper Payment employer information for more details.
What can I do if I don’t have the funds to pay wages before receiving the JobKeeper Payment?
If your revenue has been affected and you’re unable to pay your staff, we’ve outlined four options available to help you manage your cash flow when claiming JobKeeper Payments.
Most Australian banks have agreed to prioritise applications from businesses needing funding to bridge the gap until the first JobKeeper Payments are made in May. Each bank has set up a dedicate hotline to help manage the applications from businesses and will bring JobKeeper related applications to the front of the queue. The contacts for each bank are:
- ANZ - 1800 571 123
- Commonwealth Bank - 13 26 07
- NAB JobKeeper Helpline - 1800 562 533
- Westpac JobKeeper Helpline - 1300 731 073
- St George - 1300 730 196
- Bank SA - 1300 669 472
- Bank of Melbourne - 1300 784 873
Do the state industrial relations changes for COVID-19 JobKeeper Payments apply to me?
If you’re an employer covered by the state industrial relations system (generally sole traders, unincorporated partnerships and some trusts) and have qualified for the JobKeeper scheme you need to be aware of new rules in place.
Introduced on 15 May 2020, they cover:
- employer payment obligations
- changes to employee duties, location, and hours/days of work
- employee stand down
- service and leave entitlements, and
The temporary provisions, called the COVID-19 JobKeeper General Order, will remain in place until 28 September 2020 (unless extended). Visit the Department of Mines, Industry Regulation and Safety website to find out more.
JobKeeper vs JobSeeker Payments
Some people who have lost work during COVID-19 may have already applied for the new expanded JobSeeker Payment (with coronavirus supplement) via Centrelink/Services Australia.
If these people subsequently become eligible for JobKeeper Payment and are advised by their employer that they have been nominated (employers are required to advise employees of this) they should notify Services Australia via the JobKeeper employee nomination notice and report their JobKeeper Payment as income. The payment may affect income support payments.
The JobKeeper Payment is not subject to partner asset tests, unlike the JobSeeker Payment.