Q: When do you need to enrol by for JobKeeper?
Enrolment for JobKeeper applications opened on April 20.
Importantly, the enrolment process is different to the registration process prior to 20 April – and any businesses that previously “registered” will still need to “enrol” to receive JobKeeper payments.
Originally the ATO required that businesses be enrolled by the end of April 2020 in order to be eligible for the payments relating to the fortnights that fell in April.
However they have recently extended the enrolment deadline to the end of May, whereby you will still be eligible for payments relating to April (as well as May).
Importantly though, you must still have made the relevant payments to staff ($1,500 per employee per fortnight) in relation to the two fortnights ended 12/4 and 26/4) by Friday 8 May, to receive JobKeeper payments in relation to April. This means you have an additional week in May to make any “catch-up” payments to staff for April.
The JobKeeper fortnights for April and May are:
- 30 March to 12 April
- 13 April to 26 April
- 27 April to 10 May
- 11 May to 24 May
Q: How do I enrol for JobKeeper?
You can enrol through your own business portal using your myGovID, or we can enrol on your behalf.
You’ll need to know:
- Which month or quarter you are using to pass the turnover test
- The expected number of eligible employees
- Bank details
Q: Am I eligible for JobKeeper as an employer?
You may be eligible for JobKeeper as an employer if you:
1. Are are eligible employer – i.e. you:
- Carried on a business in Australia at 1 March 2020
- Meet a decline in turnover test – generally meaning your turnover has declined by 30% compared to the corresponding period a year ago
- Are not a bank or government body
- Are not in liquidation or bankruptcy
2. You have eligible employees – i.e. they:
- Were employed by you at 1 March 2020 and still employed
- Were 16 years or over at that date
- Are not casual employees, other than long term casual employees (unless they have permanent employment elsewhere)
- Are Australian residents
- Are not receiving parental leave pay or dad and partner pay
- Are not receiving workers compensation payments
- Have agreed to be nominated by you as an eligible employee (in writing)
- Are not nominated by another employer
- Are not 16 or 17 year students that are financially dependent
3. Pay at least $1,500 to the employee in each relevant fortnight
Q: How is turnover measured?
Turnover is measured based on the concept of “GST turnover”.
It includes all taxable supplies and GST-free supplies, but not input taxed supplies such as interest received.
Businesses need to show a reduction in turnover to be eligible for JobKeeper payments by passing a basic test (generally a 30% reduction compared to the previous corresponding period) or and alternative test.
Registered charities need only show a 15% reduction in turnover, and can choose whether or not to include government grants in their calculation.
Q: Is the fall in turnover test an ongoing test?
The fall in turnover test is a one-off test. Once it is passed, the business becomes eligible for JobKeeper payments and does not need to reapply.
An increase in turnover in any subsequent period will not make businesses ineligible for JobKeeper.
So a business with a turnover of $50,000 in March 19 and $25,000 in March 20 would be eligible to apply for JobKeeper even if turnover for April 2020 to September 2020 was higher than each corresponding period the year before.
Q: What are the alternate turnover tests?
The alternate turnover test is available as a substitute where businesses are unable to satisfy a basic turnover test for eligibility to access the JobKeeper scheme.
The ATO have released the details of the seven circumstances that will allow businesses to apply the alternate test. These are:
- New businesses – the business started after the corresponding comparison period, so has nothing to compare to.
- Acquisitions and disposals – the entity bought or sold a part of their business in the comparison period which changed their turnover.
- Restructure – an entity restructured part of it’s business in the comparison period which changed their turnover.
- Rapid growth – the business had experienced recent rapid growth so that the current turnover can’t be reasonably compared with the corresponding period.
- Natural disaster – a business was affected by drought, fire etc. in the comparison period, which makes the comparison unreasonable.
- Irregular turnover – a business has irregular turnover that is not cyclical. An example might be a building company that had minimal projects in the comparison period, and a large project on now.
- Incapacity of owner – this one only applies to sole traders and partnerships, where the business relies on the owner to generate income and the owner was sick, injured or on leave during the comparison period.
Q: Am I eligible for JobKeeper if I have no employees?
You may still be eligible for JobKeeper if you have no employees and pass the basic eligibility rules. Please note that this is not available to Not for Profit entities.
To be eligible you must have:
- Had an ABN at 12 March 2020
- Had reported some business income in a prior period
- Suffered a downturn as evidenced by passing a turnover test
- An eligible business participant (see below)
An eligible business participant (EBP) must be an individual and must:
- Not be employed by the business
- Be 16 years or over at 1 March 2020 and an Australian resident
- Be actively engaged in the operations and activities of the business
- Have nominated to be an EBP
The rules are specific about the particular role in an entity that can be nominated:
- Sole trader – the individual
- Partnership – an individual partner
- Trust – an individual adult beneficiary
- Company – a shareholder or director
These rules mean it is unlikely that a unit trust that has non-individual owners (for example a unit trust where the units are held by two family trusts) would be eligible for JobKeeper as a non-employer.
Additionally, and EBP cannot be a permanent employee of another entity.
Q: Will JobKeeper or cash flow boost payments be used to offset other tax debts?
Treasury has said that neither JobKeeper payments or cash flow boost payments will be generally be used to offset existing or other tax debts.
The following is extracted from the Treasury JobKeeper Q&A sheet.
WILL THE ATO USE THE JOBKEEPER PAYMENTS TO OFFSET A BAS DEBT?
The payment will generally be paid directly to the employer and not used to offset tax liabilities, as the
intent is that it is a payment that facilitates employers to pay their employees.
The following is extracted from the ATO website in relation to the cash flow boost:
To support eligible entities during the period associated with COVID-19, any excess credit from the activity statement that received the cash flow boost amount will be refunded to you, rather than offset against any other tax debts you have. However, excess amounts may still be applied against any outstanding debts with other Australian Government agencies.
Q: Who can access the $17,500 WA payroll tax grant?
The $17,500 WA payroll tax grant is available for any WA business that had taxable wages of more than $1,000,000 for the 2018/19 financial year.
The grant will be automatically paid in July 2020 – businesses don’t need to apply.
For businesses that weren’t registered for payroll tax in 18/19, the grant will be based on 19/20 taxable wages, and paid after annual reconciliations are complete.
Taxable wages generally include:
- Salaries and wages
- Salary sacrifice
- Super contributions
- Fringe benefits
- Termination payments
- Employee share aquisitions
- Contractor payments
- Directors’ fees
- Other payments including commissions, bonuses and reimbursements
The WA Government has confirmed that any JobKeeper payments received will not form part of taxable wages for payroll tax purposes.
Q: Who can get early access to super?
Individuals financially affected by COVID-19 can access some of their superannuation early. Individuals will not need to pay tax on amounts released and will not need to include it in their tax return.
Where eligible, up to $10,000 can be accessed from super before 30/6/20 and up to $10,000 after that date but before 24 September 2020.
To be eligible you must either:
- Be unemployed
- Be eligible to receive JobSeeker, youth allowance for JobSeekers, parenting payment, special benefit or farm household allowance
- Have been made redundant on or after 1 January 2020
- Have had your working hours reduced by 20% or more, or
- Have had your business turnover reduced by 20% or more if you’re a sole trader
The ATO have warned against accessing your super early with the intention of re-contributing it at a later date in order to obtain a tax advantage.
It’s also important to consider the long term impact on your retirement savings, as well as whether you’ll lose access to life insurance if you close an existing fund.
Q: Are long term casuals eligible employees when a business changes hands?
A condition for an employer to receive JobKeeper payments for long term casuals is that they must have been employed “on a regular and systematic basis” by the business for at least 12 months as at 1 March 2020.
Where the business was acquired from a previous entity, the rules confirm that the employment term will not be broken, provided the casual employee was employed by the previous entity in the same business that since changed hands.
From the ATO website Employee Q&As:
Question: The business I work for has changed ownership since 1 March 2020. Am I still an eligible employee?
Answer: Yes, you are still an eligible employee of a business for the purposes of the JobKeeper scheme (if all other conditions are also satisfied). The acquiring entity will be treated as having employed you prior to the business changing owners.
For casual employees, in determining whether you are a long term casual employee (that is, employed by an entity on a regular and systematic basis during the 12 month period ending on 1 March 2020), the time you worked before the business changed ownership is counted.
Q: How long will JobKeeper payments be received?
The JobKeeper scheme has a current life of six months, from 30 March 2020 to 27 September 2020 (although the Act allows for a period up to 31 December 2020).
JobKeeper payments are received by eligible business after the end of each eligible month, based on payments made within the relevant JobKeeper fortnights.
The fortnights have been set as:
- 30 March to 12 April
- 13 April to 26 April
- 27 April to 10 May
- 11 May to 24 May
- 25 May to 7 June
- 8 June to 21 June
- 22 June to 5 July
- 6 July to 19 July
- 20 July to 2 August
- 3 August to 16 August
- 17 August to 30 August
- 31 August to 13 September
- 14 September to 27 September
Q: Are JobKeeper payments taxable?
JobKeeper payments are assessable income to the business receiving them for income tax purposes. So these will form part of the business taxable income at year end and may result in income tax payable.
They are also assessable income to employees, just like any other salary or wage.
The Jobkeeper payments are not assessable for payroll tax purposes in WA, and should be shown as “other exempt income” in your monthly payroll tax return.
The Cash Flow Boost stimulus payments are not assessable for income tax purposes.
Q: How do I deal with JobKeeper in Xero?
Once you’ve enrolled for JobKeeper and received signed nomination forms from your employees, you’ll need to make a few changes to settings in your Xero software as follows:
- Xero has automatically created a new pay item called JobKeeper payment top up. You can use this to make top-up payments to eligible empolyees earning less than $1,500 per fortnight.
- Select which employees you will be receiving JobKeeper for. Click here for instructions.
- Ensure all eligible employees have received at least $1,500 per fortnight
- Process your pay as per usual. The ATO will use your single touch payroll data to assess your JobKeeper payments.
- Run additional unscheduled pay runs if you need to make any final top-up payments before the end of the month.
Q: How do I deal with JobKeeper in MYOB?
Once you’ve enrolled for JobKeeper and received signed nomination forms from your employees, you’ll need to make a few changes to settings in your MYOB software as follows:
- Create a new pay item called JOBKEEPER-TOPUP (for bringing wages up to the minimum $1,500 per fortnight). The ATO reporting category to select is “Allowance – Other”. Then select the relevant employees that will need this new pay item.
- To notify the ATO of eligible employees, go to the Payroll command centre and click Payroll Reporting/Payroll Reporting Centre , then click the JobKeeper payments tab. Select all eligible employees and enter the first JobKeeper fortnight for each, then click the green button “Notify the ATO” when done.
- Pay runs are entered as per normal, except that you use the JOBKEEPER-TOPUP category for any top-up payments or for any payments to stood down staff.
Q: Can more than one business owner get JobKeeper?
No. Only one individual can be nominated as the Eligible Business Participant (EBP) for each business.
For a sole trader, the EBP can only be that individual.
A partnership consisting of two individuals must nominate one of those individuals as the EBP.
A trust must nominate an individual beneficiary as it’s EBP. It seems that there is no requirement for the beneficiary to have received a trust distribution in the current year.
A company must nominate an individual that is a shareholder or a director of the company.
Note that EBPs must have been actively involved in the operation of the business as at 1 March 2020 as well as passing other conditions similar to eligible employees. Importantly an EBP cannot be a non-casual employee of another entity.
Q: What are the monthly reporting requirements?
An entity that is entitled to a JobKeeper payment must notify the ATO of:
- its current GST turnover for the reporting month; and
- its projected GST turnover for the following month
It must also reconfirm the number of eligible employees
Registered charities and gift deductible recipients must also report the amount of certain donations that they have received or expect to receive.
The report must be made within 7 days of the end of the reporting month.
Q: Do I need to top-up wages to $1,500 per fortnight?
Where an eligible employee currently earns less than $1,500 per fortnight, the employer has to make a decision and apply it to all eligible employees – either:
- Top up the employee and any other eligible employees to $1,500 minimum wages per fortnight, enrol for JobKeeper and receive JobKeeper payments in the following month, or:
- Do not enrol for JobKeeper and bear the full cost of all employees wages
Eligible employees who are stood down must also be paid a minimum of $1,500 per fortnight.
Employers cannot pick and choose which eligible employees will receive JobKeeper. This is known as the “one in all in” rule.
Employees however can choose not to be an eligible employee. This may happen for example when the employee has to choose between more than one employer.
Q: Does my payroll period need to match the JobKeeper fortnight?
The duration of the entity’s pay period is not relevant for determining whether the wages condition has been met for a JobKeeper fortnight. All that is required is that the minimum amount of $1,500 has been paid within the particular JobKeeper fortnight.
However, for the month of April 2020, the Commissioner has stated that he will accept that the wages condition has been satisfied if an employee has been paid a minimum of $3,000 for that month. The JobKeeper rules also provide that if an employer’s ordinary arrangement is to pay its employees on a frequency that is longer than a fortnight, then the payment can be allocated between fortnights on a reasonable basis.
Also, the JobKeeper rules provide the Commissioner with an ability to treat a particular event that happened in a fortnight as having happened in a different fortnight if the Commissioner considers it reasonable to do so.
Q: Do I need to pay super to employees on JobKeeper?
Where an employees normal salary is higher than the minimum JobKeeper amount and an employer receives the JobKeeper payment to subsidise the salaries and wages they ordinarily pay to eligible employees, these payments of salaries and wages remain subject to the usual super obligations.
However, an employer will not be required to make super contributions for an employee for additional JobKeeper payments made to employees (e.g. top-ups). This includes employees who are stood down because employers have no obligation to pay salaries and wages to stood down employees.
It will be up to the employer if they want to pay superannuation on these amounts.
Example 1 – Joe (employee) normally earns $1,600 per fortnight for working 76 hours. Joe is still working 76 hours and earns $1,600 per fortnight. Fred (employer) enrols for JobKeeper and receives $1,500 per fortnight. Fred must still pay super for Joe based on $1,600.
Example 2 – Sue (employee) normally earns $1,300 per fortnight for working 60 hours. Sue is still working 60 hours but now receives $1,500 per fortnight – her usual $1,300 plus a $200 top-up. Bill (employer) enrols for JobKeeper and receives $1,500 perfortnight. Bill must pay super for Sue based on $1,300, but can choose to pay super based on $1,500.
Example 3 – Trevor (employee) has been stood down. Julie (employer) enrols for JobKeeper and begins to pay Trevor $1,500 in advance of receiving $1,500 per fortnight. Julie does not need to pay pay any super for Trevor, but can choose to pay super based on $1,500.
Q: How do I set up a business portal?
You may need to set up a business portal to enrol for JobKeeper, and to satisfy your monthly reporting requirements.
The basic steps to set up a business portal are as follows:
Set up your myGovID if you don’t already have one
- Download the myGovID app from the app store on a device
- Enter your personal details including an email address that is not shared
- Add two valid forms of ID – drivers licence, medicare card or passport
Log in to the Relationship Authorisation Manager (RAM) using your myGovID and link your business.
- Go to your web browser and log in to RAM using your myGovID
- Select “Link my business”
Log in to the business portal
- Go to you web browser and navigate to the business portal
- Use your myGovID to log in
Q: Do I calculate turnover using the cash or accruals method?
The ATO have chopped and change with their advice on this one.
Although the initially suggested you can choose to use either cash or accrual to calculate your turnover for testing purposes providing you were consistent across periods.
However the latest ATO guidance (at 29/4/20) says:
If you normally account for GST on an accruals basis, but seek to calculate on a cash basis (or vice versa), we may seek to understand your circumstances to ensure that the calculation achieves an appropriate reflection of your turnover.
So it would seem you still have a choice, but need a very good reason to choose the method that you don’t normally use for you BAS reporting.
Q: Who is an eligible business participant of a trust?
Sole traders and other entities can nominate an Eligible Business Participant (EBP) to receive Jobkeeper in certain circumstances.
The EBP must be an individual that is actively engaged in the operation of the business.
For a trust, the individual nominated must be an adult beneficiary of the trust. There does not appear to be a requirement that the individual actually receive a trust distribution, but must be a potential beneficiary of the trust.
Discretionary trusts and family trusts often have trusts deeds that nominate a wide range of potential beneficiaries.
The beneficiaries of fixed and unit trusts however are usually limited to those who hold a fixed interest in the trust.
Where the holders of these interests are not individuals (for example, all unit holders of the fixed trust are owned by discretionary trusts), the trust will be unable to nominate an EBP, and will not be eligible for JobKeeper on behalf of it’s non-employed owners.
Q: Do employees need to work for their $1,500?
The FAQ below should be used as a general guide only and should not be relied upon. You should seek advice from a qualified lawyer or specialist advisor on all HR related matters.
The FairWork laws have been amended while the JobKeeper scheme is in place. Note that not all employers fall under the Federal FairWork system and some need to apply state based laws instead.
A Jobkeeper enrolled employer can reasonably ask an employee to work extra hours anytime, however FairWork say that asking someone to work extra hours just to match their $1,500 is unlikely to be reasonable. It appears that an employer can ask, but cannot demand an employee to work additional hours during the JobKeeper period.
Under FairWork laws an employee’s hourly base pay rate cannot be reduced by a JobKeeper direction or agreement. If they work enough hours during a fortnight to entitle them to more than $1,500, the employer must pay them the full amount.
Q: How do I know I’ve successfully enrolled for JobKeeper?
We’re not aware of the ATO making any contact with businesses to confirm their enrolment status.
At this stage we recommend that you use the print option during enrolment and keep a copy of your completed application.
There is currently no indication of your enrolment status on your business portal, but we recommend that you check it regularly to see if the instructions change at Step 2 (notify employees) and Step 3 (monthly reporting) of the original enrolment process.
Enrolled businesses must report on a monthly basis to the ATO within 7 days following month end.
Q: Does a fall in turnover need to be COVID-19 related?
No, to pass the fall in turnover test you do not need to show that the reduction was caused by a COVID-19 related issue.
The following is extracted from the ATO’s “Employers frequently asked JobKeeper Questions”:
Question: Do I have to show that it is COVID-19 that caused the decline in the turnover of my business?
Answer: No. It does not matter whether it is COVID-19 or the subsequent effect on the economy that has caused the drop in turnover, provided the turnover has fallen by the required percentage and you satisfy the other eligibility criteria.
Q: Can terminated employees be eligible for JobKeeper?
Terminated employees can be eligible for JobKeeper provided they were employed by your business as at 1 March, were then terminated and have since been re-instated.
JobKeeper is then available for that employee from the fortnight that you first pay them the required minimum of $1,500, provided all other JobKeeper requirements are met.
Q: Are stood down employees eligible for JobKeeper?
Employees that have been stood down, but not terminated, are potentially eligible employees for JobKeeper purposes.
This means they must be treated like any other employee and if they are eligible and agree to be nominated, a JobKeeper enrolled business must pay them a minimum of $1,500 per fortnight. This is known as the ‘one in all in’ rule.