JobKeeper Payment – The detail!

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The JobKeeper payment is open to eligible employers to enable them to pay their eligible employee’s salary or wages of at least $1,500 (before tax) per fortnight.

Employers will need to pay eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper payment.

Eligible employers will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee.This will be paid to the employer in arrears each month by the ATO.

Participation in the JobKeeper scheme requires monthly reporting including current GST turnover for the reporting month and projected GST turnover for the following month. If you are not currently on monthly BAS cycles, please contact us.

The first payments will commence in the first week of May 2020.  JobKeeper payments can be made for the period beginning 30 March 2020 to 27 September..

If employers do not continue to pay their employees for each pay period, they will cease to qualify for the JobKeeper payment. A monthly JobKeeper Declaration report will be required to be completed.

We strongly recommend that all our business clients register their interest in the JobKeeper Payment here – Click here JobKeeper payment. By registering your interest, you will receive all the ATO updates – it does not necessarily mean you will claim, enrol or in fact be eligible, but it will keep you up to date with all the information that you will need to keep on top of.

How to enrol (from 20 April onwards)

  • Step 1 – From 20 April 2020, if you wish for us to enrol your business, on your behalf, we can via ATO Online services for agents. This must be done by the end of April to claim JobKeeper payments for April. You can enrol directly with the ATO using the Business Portal and authenticate with myGovID. ATO Business Portal
  • Step 2 – You will need to provide your bank details and confirm you are entitled to a business participation payment ie you and your employees meet the eligibility requirements.
  • Step 3 – Specify the number of employees who will be eligible for one period and the number eligible for two periods.
  • Step 4 – Confirm that the employees that you plan to nominate are eligible and that you have notified them. You’ll need to provide them with a JobKeeper employee nomination notice.
  • Step 5 – 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).

How to pay.

You need to re-start or continue to pay your eligible employees at least $1,500 a fortnight in line with your existing pay cycle through your existing payroll solution.

When to pay

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, and 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.

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.

If you usually pay your employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a monthly pay cycle, your employees must have received the monthly equivalent of $1,500 per fortnight.

If your eligible employees change or leave your employment, you need to notify the ATO via the JobKeeper Declaration report.

How much to pay

  • You must pay the minimum $1,500 before tax to each eligible employee per fortnight to claim the JobKeeper payment for that fortnight.
  • If your eligible employees earn less than $1,500 per fortnight before tax, you must pay them at least $1,500 for each fortnight to claim the JobKeeper payment. This is a ‘top up’ of their salary or wages and will ensure they remain eligible.
  • You cannot pay your employees less than $1,500 per fortnight and keep the difference. You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 before tax per fortnight.
  • If your eligible employees earn more than $1,500 per fortnight, you should continue to pay them their regular salary or wages. However, you will only receive $1,500 for each eligible employee. Any amount you pay above $1,500 per fortnight is not subsidised by the JobKeeper payment.
  • If an employee has been stood down after 1 March 2020, you can start paying them $1,500 per fortnight to qualify for the JobKeeper payment for that employee.
  • If an employee ceased working for you after 1 March 2020, you can re-engage them and pay them at least $1,500 per fortnight. You will only be eligible to claim for the fortnights after you re-engaged your employee.
  • If you usually pay your employees monthly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a four-week pay cycle, your employees must have received at least $3,000 for every four-week period.

Ensure you pay eligible employees correctly

You need to pay eligible employees in line with their existing pay amounts and pay cycle and meet the following requirements:

  • Pay the minimum $1,500 before tax to each eligible employee each fortnight (starting with the fortnight 30 March – 12 April) to claim the JobKeeper payment for that fortnight.
  • You need to continue to pay employees you are claiming for either
    • every subsequent fortnight until 27 September 2020
    • until your employees stop being eligible or your business opts out.
  • For the first two fortnights (30 March – 12 April and 13 April – 26 April), the ATO will accept the minimum $1,500 payment before tax has been paid for each fortnight even if it has been paid late, provided it is paid 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.
  • If your  eligible employees earn less than $1,500 per fortnight before tax, YOU MUST PAY THEM $1,500 per for each fortnight to claim the JobKeeper payment. This ‘top up’ of their salary or wages will ensure they remain eligible. You do not have to pay SGC on this “top up” amount.
  • Employers cannot pay their employees less than $1,500 before tax per fortnight and keep the difference.
  • You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 before tax per fortnight.
  • If the eligible employees earn more than $1,500 per fortnight, you will only receive $1,500 for each eligible employee from the ATO, and the business needs to pay the additional balance itself. In this scenario, you will have to pay the SGC on the full amount paid to the employee.
  • If an employee has been stood down after 1 March, and you have re-engaged them, you must pay the eligible employee at least $1,500 per fortnight before tax. You will only be eligible to claim for the fortnights after you have re-engaged the employee within the pay period.
  • If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and has since been re-engaged by them, the employee must receive, at a minimum, $1,500 per fortnight, before tax.
  • The one in, all in rule – Employers who opt to participate in the JobKeeper scheme must ensure that all eligible employees are covered. This includes all eligible employees who are undertaking work for the employer or have been stood down. The employer cannot select which eligible employees will participate in the scheme.
  • You cannot claim the reimbursement for the JobKeeper payment for employees who were not paid the full amount during each JobKeeper payment period. Ie $1,500 per fortnight.
  • If your ordinary pay cycle is say monthly, the payment can be allocated between fortnights in a reasonable manner. For example, if an employer’s ordinary arrangement is to pay an employee every four weeks, it will be reasonable if the employee is paid at least $3,000 for every four-week period.
  • The JobKeeper payment is a reimbursement from the ATO to you and cannot be paid in advance.

Apply for the JobKeeper payment for your eligible employees: (available from 4 May 2020 onwards)

  • Step 1 – Apply to claim the JobKeeper payment by logging in to 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
    • advise us as your registered tax agent and we 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 BPI as 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.

The ATO will pay you the JobKeeper payment for all eligible employees after receiving their application.

Tax consequences

All JobKeeper payments are assessable income of the business that is eligible to receive the payments. The normal rules for deductibility apply in respect of the amounts your business pays to its employees where those amounts are subsidised by the JobKeeper payment.

The JobKeeper payment is not subject to GST.

Superannuation guarantee

New rules are being introduced by the government with the intention to not require super guarantee (SGC) to be paid on additional payments that are made to employees as a result of JobKeeper payments. We will update this information once legislation or regulations are in place.

What you can’t do

You cannot claim the JobKeeper payment on behalf of employees who were not paid at least $1,500 before tax during each JobKeeper payment period.

You cannot claim the JobKeeper payment in advance. The JobKeeper payment is a reimbursement from the ATO to an employer in arrears, and cannot be paid in advance in any circumstances.

 

ATO website JobKeeper Information – Click here..

 

 

Book a Business Support Package Consultation

 

 

Treasury’s JobKeeper Fact Sheets – Click here..

 

 

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