The Australian Government and the ATO continue to update JobKeeper Payment FAQs on a daily basis to assist you with the latest information regarding the JobKeeper Scheme and what you need to know as an employer.
Click here to access the JobKeeper Payment FAQs from Treasury.
Click here to access the JobKeeper Payment FAQs from the ATO.
We have also created a JobKeeper Webinar FAQs that directly reflects the most common questions we received during our webinar. Here are our FAQs for your reference:
Casual employees are eligible to receive the JobKeeper payment if they were employed for 12 months or more as at 1 March 2020 on a regular and systematic basis with your business. The definition of ‘regular and systematic’ work refers to the arrangement of work according to an identifiable system e.g. a roster (however, not necessarily the same days or hours) where work is offered and accepted regularly. A regular and systematic casual is an employee who has a reasonable expectation of ongoing work.
Demonstration of decline in revenue:
If your business has a turnover of less than $1 billion and you can show or project a reduction in turnover of 30% or more you are eligible (if your business has a turnover of $1 billion or more you are eligible if you can show or project a reduction in turnover of 50% or more). Turnover is measured according to the current calculation for GST purposes and is reported on your Business Activity Statement (BAS). You may use an accruals basis of accounting to calculate both the current GST turnover and projected GST turnover as both calculations require you to include sales that you have made or are likely to make without any reference to when you are paid. However, if you prepare your activity statements on a cash basis, the ATO will allow you to calculate both the current and projected GST turnovers on a cash basis. The basis used must be the same for calculating your projected and current GST turnover. Typically, current turnover will equal your GST exclusive sales less your input taxed supplies. It is possible to use an accruals basis of accounting to calculate both the current GST turnover and projected GST turnover. If BAS is prepared on a cash basis, the current and projected GST turnover can be calculated on a cash basis. Once your business has qualified under the JobKeeper scheme there is no need to demonstrate an ongoing drop in revenue.
Businesses that have been in operation for less than a year will be assessed on a case by case basis by the Tax Commissioner. The Commissioner will have discretion to consider additional information that you can provide for your business in order to establish that your business has been impacted by the Coronavirus. The Tax Commissioner may also set out alternative eligibility tests in certain circumstances.
You can choose either to show a reduction in turnover over the quarter or over a single month between March – September 2020 compared to the same period in 2019. It does not matter how you normally choose to report your GST. The assessment to qualify from the beginning of the JobKeeper scheme must be on the basis of the months of March or April or the June quarter.
Under the recent changes to the Fair Work Act, qualifying employers are able to make partial stand down directions so that employees work reduced days or hours of work temporarily, as long as certain requirements are met. However, an employer cannot direct an employee to work more hours. This must be agreed to by the employee.
Contractors (such as sole traders with an ABN) will need to apply for the JobKeeper payment themselves as they will not be eligible employees for the purposes of your JobKeeper application. Employees under the age of 16 are also not eligible. In addition, employees on subclass 457 Visas are not eligible. To be eligible, employees must be an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.
If your employee was employed as at 1 March 2020 and resigned before 30 March 2020, they do not need to be included as an eligible employee. If the employee continued to work after 30 March 2020 and then resigned, they should be nominated as an eligible employee for the relevant fortnight/s, as long as you have already paid them at least $1,500 before tax.
Employees can only receive a JobKeeper payment from 1 employer. If your employee has multiple jobs, they will need to elect which employer to receive the payment from. If you are to be the primary employer for JobKeeper purposes, the employee will need to complete and return to you a JobKeeper Employee Nomination Notice form.
This scenario should be considered on a case by case basis depending on the employee’s personal circumstances and the work environment. As an employer you have a responsibility to provide a safe working environment for employees taking into account any health issues, even if this means considering alternative working arrangements such as working from home during the COVID-19 pandemic or allowing the employee to take leave. If the employee remains employed and meets the other eligibility criteria, then they will be eligible for JobKeeper.
Leave entitlements continue to accrue as they did prior to the JobKeeper arrangements coming into place. Employees will still accrue leave entitlements based on their usual rate of pay and hours whilst on JobKeeper, even if they are stood down.
Employees on unpaid parental leave are eligible to receive the JobKeeper subsidy from their employer unless they are currently receiving paid Government parental leave or Dad and partner pay, in which case they are not eligible for the JobKeeper subsidy.
You are required to pay superannuation on ordinary time earnings for your employees. This means that for any amount payable for which work was performed, superannuation contributions will need to be made. For example, if an employee performs work which entitles them to be paid $1,000, but the employer paid them the full $1,500 JobKeeper payment for a JobKeeper fortnight, then the employer will only be required to make superannuation contributions in relation to $1,000. If an employee is stood down but still receiving the $1500 fortnightly JobKeeper payment you are not required to pay superannuation because this is not classified as ordinary time earnings. For an employee that earns above $1,500 per fortnight for their work, the employer is required to pay normal superannuation contributions on the full amount.
You will be required to report employee payments to the ATO on a monthly basis and the subsidy will then be reimbursed to the employer. The ATO will make payments to employers on a monthly basis and payments will be made no later than 14 days after the calendar month in which the fortnight ends.
If you have already run your payroll for March/April and any otherwise eligible employee has been paid less than $1,500 per fortnight, you are required to make “top up” payments to these employees (to ensure that they receive $1500 per fortnight) no later than 8 May to be eligible for the reimbursement for the first two fortnightly periods of the JobKeeper Scheme. Moving forward the ATO requires that payments are made fortnightly or monthly.
Certain eligible business participants (who are not employees), such as sole traders and partners in a partnership, may be eligible to participate in the scheme. However, only one individual from each entity can receive the JobKeeper payment. To be eligible, the individual must be actively engaged in the business carried on by the entity and must also meet all other eligibility criteria.
An eligible business operated through a company that pays director fees to non-executive directors, may nominate only one such individual to receive JobKeeper payments. However, a Director who receives a salary or wage as an employee, and who satisfies the other eligibility criteria, will be eligible to receive JobKeeper payments.
If you have severed the employment relationship with all employees by way of redundancy due to the COVID-19 pandemic post 1 March 2020, you can re-engage these employees and apply for the JobKeeper subsidy. Alternatively, if you have stood your employees down without pay due to the COVID-19 pandemic you can also apply for the JobKeeper subsidy. If your business has ceased operations and you have cancelled your ABN entirely, please reach out to one of our consultants for further assistance.
Clarification re Payment of Superannuation
An example was provided in the webinar regarding payment of superannuation to an employee receiving the $1,500 JobKeeper payment only, for work performed. Please be aware that in this circumstance the employee would receive $1,500 gross, less taxation.
The employer would be required to pay a 9.5% superannuation payment on top of the $1,500 amount as it would be ‘ordinary time earnings’.