The Jobmaker Hiring Credit scheme was announced as part of the 2021 Budget as an incentive for businesses to create new jobs and have the cost subsidised. Eligible employers can receive $200 per week for each new employee aged 16 to 29 years, or $100 per week for new employees aged 30 to 35 years, hired between 7 October 2020 and 6 October 2021, for up to 12 months.
Businesses are unable to receive the JobMaker Credits if they receive a JobKeeper payment for a fortnight that begins during the JobMaker period. They also cannot simultaneously receive JobMaker and an apprenticeship or traineeship subsidy. To be eligible employers must have an ABN, be up to date with their tax and GST lodgements, report through Single Touch Payroll, and be registered for Pay As You Go Withholding.
To receive the JobMaker credits there must be proof that employers are actually creating new employment positions. They need to show an increase in the total head count of employees as compared to the baseline head count, which is the total number of staff on 30 September 2020. Employers must also show an increase in payroll expenses as compared to the baseline payroll expenses incurred in the 3 month period ending 6 October 2020.
The new employee must have received government support such as JobSeeker or Youth Allowance for at least 2 fortnights out of the previous 6 fortnights before they were hired. They must be a genuine employee (not labour hire or a contractor), and cannot be an excluded employee, including a close associate, relative, a partner in a partnership, or shareholder in the company. They must also work at least 20 hours per week in the new job. Employers will need employees to complete a JobMaker employee notice to confirm they are eligible.
The JobMaker payment is paid to employers every 3 months in arrears. Businesses only need to register for the JobMaker scheme once. Registration must be completed before the end of the first claim period that the business is claiming – for the first JobMaker period (7 October 2020 to 6 January 2021), registration opened 6 December 2020, and employers can claim between 1 February and 30 April 2021. Employers don’t need to be registered before hiring new employees.
Businesses complete their registration and claim through myGov or the Business portal. Unlike the JobKeeper scheme, businesses are not required to pass the payment on to employees. The credits are assessable income amounts, and are not subject to GST.
Under the anti-avoidance rules the ATO will disqualify businesses that make artificial arrangements to inflate their head count or payroll by terminating current staff, or reducing the hours of an existing employee. Disqualified employers will lose entitlement to JobMaker Credits in the current and all future periods.
A complete ATO guide to the JobMaker process can be found here.
Author: Danielle Pomersbach