Treasury and the ATO have released the much-awaited detail of how JobKeeper is to work.
There is a lot to digest…. however, we have put together in a ‘broad brush’ format, what we believe are the key elements for business owners:
- Businesses will be able to enrol in the JobKeeper scheme from 20 April 2020. Enrolment will be via the ATO business portal or tax agent portal.
- At the time the business enrols 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 (for an aggregated turnover of $1 billion or less).
- To work out your fall in turnover, you can compare either:
- GST turnover for March 2020 with GST turnover for March 2019
- Projected GST turnover for April 2020 with GST turnover for April 2019
- Projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.
- How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, though you can do that if it is easier.
- Businesses only need to satisfy fall in turnover requirement once – you don’t need to retest turnover each month.
- Once enrolled, the ATO requires an employer to complete a JobKeeper employee nomination notice to notify eligible employees that the employer intends to participate in the scheme, and ask the employees to agree to be nominated and receive payments from them as part of the scheme. The employee indicates on that same form whether they agree (or not) before returning the form to the employer.
- Businesses need to re-start or continue to pay eligible employees at least $1,500 a fortnight in line with your existing pay cycle through your existing payroll solution.
- Employers should pay 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 (as an initial catch up) 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. This means that you can make two fortnightly payments of at least $1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April.
- The JobKeeper payment cannot be claimed on behalf of employees who were not paid at least $1,500 before tax during each JobKeeper payment period. Yes, this means some employees may receive a pay rise… or the employer does not make the employee ‘eligible’ and continues to pay the normal wage amount of less than $1,500 per fortnight.
With enrolment opening on the 20th April, there is merit in starting the wheels turning on preparation of the JobKeeper employee nomination notice forms now and circulating to eligible employees.
We are aware the application of the JobKeeper package varies business to business…. depending on structure, number of employees, type of industry, etc etc.
Please contact us if you wish to discuss the specifics on how this applies to you; lastly, please note we can enrol your business for JobKeeper for a nominal fee.