Since our last email about the government stimulus programs more details have been released about Job Keeper.
The JobKeeper payment is open to eligible employers, sole traders and other entities to enable them to pay their eligible employee’s salary or wages of at least $1,500 (before tax) per fortnight. You can enrol for the JobKeeper payment through the ATO's Business Portal, in ATO online services using myGov if you are a sole trader, or through a registered tax or BAS agent commencing 20 April 2020.
Before registering, you will need to consider the eligibility requirements including the turnover test. The turnover calculation is base on GST turnover (even if not registered for GST).
Two tests for employers to confirm eligibility for Job Keeper payments in regards to their business turnover;
The Decline in Turnover Test; or
The Alternative Test
You are only required to pass one of these tests to be satisfy the Turnover requirements of Job Keeper.
The Decline in Turnover Test;
The Decline in Turnover Test is passed if your projected turnover for a period (month or quarter) is 30% or less when compared to a corresponding period in 2019.
Unfortunately, many of you are finding that your turnover figures for February and March 2020 when compared to February and March 2019 will not allow you to qualify.
The good news is the eligible periods of comparison includes the month of April and the April to June 2020 quarter. This allows us to estimate your projected turnover for April, May and June 2020 and compare it to April, May and June of last year.
Given the virus hit our economy in the second half of March, the projection of April, May and June should allow many businesses to pass the Decline in Turnover Test when applications commence next week, irrespective of your turnover in March.
The Alternative Test:
The Alternative Test applies if there is not an appropriate relevant comparison period in 2019 i.e for new business, or a business that made a major business acquisition in 2020. The business will need to apply to the ATO for an alternative turnover assessment and its eligibility will be at the discretion of the Commissioner.
Importantly in the explanatory memorandum the Commissioner’s discretion includes an example where a business has not been trading for a full year. In the example the Commissioner takes the average monthly GST turnover since trading commenced and compares it to the current month in question. If the current months turnover shows a fall of greater than 30% compared to the average turnover, the alternative test is past.
Employees
The ATO now requires each Eligible Employee to confirm, in writing, that they:
Agree to be nominated by the employer under JobKeeper scheme;
They confirm they have not agreed to be nominated by another employer; and
They do not have permanent employment with another employer if they are a casual employee.
This is done by having each Eligible Employee complete an ATO JobKeeper Employee Nomination Notice. This form will need to be kept with your company records for 5 years.
A copy of this form can be found at:
https://www.ato.gov.au/assets/0/104/300/387/d1aab7f2-fbe8-44b8-9ec1-4885ded1088e.pdf
Reporting & Registration
Once you qualify for the JobKeeper Payments, the qualification will last for the period of the JobKeeper stimulus (ie. until 27 September 2020).
However, you will need to report your actual and projected turnover details to the ATO at the end of each month. More details on how this reporting works are still to come. Please note this reporting is for Government’s information collection only and does not affect the eligibility of the business after meeting the Decline in Turnover test.
The JobKeeper Payments are not automatic, if you want to receive them you will need to register your interest with the ATO. (We can help you with this process).
The JobKeeper Payments registration process will open from Monday 20 April 2020.
A Business can register either through their ATO Business Portal or via us as the registered tax agent. When applying you will need to provide the ATO with details regarding the eligible employees the business will be receiving payments for.
Please note, JobKeeper Payments will be made in arrears of the previous fortnight. To receive the JobKeeper Payments for the first two fortnights (ie. 30 March to 12 April 2020 and 13 April to 27 April 2020) you must be registered by 26 April 2020.
Also please note, if by chance you receive an over-payment of the JobKeeper Payments you will have to reimburse the ATO the overpaid amount, along with any applied general interest charges.
JOBKEEPER: 8 STEPS TO TAKE RIGHT NOW
Ascertain your eligibility for JobKeeper as an employer and/or as a sole trader or other entity (the business participation entitlement).
Identify all eligible employees, starting with those on payroll as at 1 March 2020.
Check if your business can afford to pay all eligible employees at least $1500 each per fortnight plus associated costs.
If the decision to participate in JobKeeper is made, then advise the employer to notify each eligible employee that it is intending to nominate them as eligible employees under the JobKeeper scheme.
Employees must complete the JobKeeper employee nomination notice and return it to the employer by the end of April to claim JobKeeper payments for April. Eligible employees must agree to being nominated.
Ensure eligible employees are paid at least $1500 a fortnight in line with existing pay cycles through existing payroll solutions.
From Monday 20 April, enrol for JobKeeper payments. Enrolment must be completed by the end of April to receive JobKeeper payments for April.
From Monday 4 May, apply to claim JobKeeper and confirm the eligible employees using employee data prefilled from STP reports or otherwise entered manually.