25 January 2021
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JobKeeper Stimulus: What business owners need to know!

Peter Switzer
31 March 2020

Here are the main points:

• What businesses? Those with turnovers less than a billion dollars and a turnover drop of 30% or more, or those with turnover greater than a billion and a turnover drop of 50% or more.

What’s on offer? $1500 a fortnight is available to keep or reinstate stood down workers. The employee must receive a gross wage of $1500, even if the previous wage was less.

Is tax taken out? Yes, $1500 is the gross wage but the tax will be small.

How do you get it? Employers register their intention on the ATO website to show a 30% or more decline in turnover since 1 March 2020.

What if your business did OK in March? If your business is set to be crushed by the Coronavirus containment policies, but you did OK in March, you will have to prove it to the ATO, which is reasonable.

• How does an employer account for it? Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

How does the ATO check? The ATO will use the Single Touch Payroll data to make decisions on eligibility for the $1500 per employee.

What employees can get it? Full and part-time workers who have been in place on 1 March, 2020, and casuals who have been on board for one year. The employee has to be at least 16 years old, be an Australian citizen, or holder of a permanent visa, Protected Special Category Visa Holder, or a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder;

How much? Each worker earmarked for the $1500 gets the full amount and employers can top up to keep the employee on their old wage.

What about super? The employer has to keep up super payments but if someone was on $1000 and is now going to get $1500, super is only paid on the $1000, though the employer can opt to pay it on the full $1500.

Tell your employees: All employees who will receive the JobKeeper payment must be told that they are receiving it and they can only get the payment from one employer.

How long will it be available? Six months is the maximum period but if the economy comes back strongly before then, the Government could shorten the time period.

How do you apply? Employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020.

Is this for self-employed business owners too? Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment, provide that individual’s Tax File Number and provide a declaration as to recent business activity. People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.

A great example from Treasury: Employer with employees on different wages

Adam owns a real estate business with two employees. The business is still operating at this stage, but Adam expects that turnover will decline by more than 30 per cent in the coming months. The employees are:

  • Anne, who is a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues working for the business; and
  • Nick, who is a permanent part-time employee on a salary of $1,000 per fortnight before tax and who continues working for the business.

Adam is eligible to receive the JobKeeper Payment for each employee, which would have the following benefits for the business and its employees:

• The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax, and the business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s salary and will continue paying the superannuation guarantee on Anne’s income;

• The business continues to pay Nick his $1,000 per fortnight before tax salary and an additional $500 per fortnight before tax, totalling $1,500 per fortnight before tax. The business receives $1,500 per fortnight before tax from the JobKeeper Payment which will subsidise the cost of Nick’s salary. The business must continue to pay the superannuation guarantee on the $1,000 per fortnight of wages that Nick is earning. The business has the option of choosing to pay superannuation on the additional $500 (before tax) paid to Nick under the JobKeeper Payment.

Adam can register his initial interest in the scheme from 30 March 2020, followed subsequently by an application to ATO with details about his eligible employees. In addition, Adam is required to advise his employees that he has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.

For more go to www.treasury.gov.au

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