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Jobkeeper Payments

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Carollo & Co

Jobkeeper Payments

The Federal Government’s JobKeeper Scheme gives qualifying employers fortnightly $1,500 payments for eligible employees, on the condition that they pay that employee at least $1,500 in that fortnight.

The JobKeeper Scheme is designed to help employers deal with the economic impact of COVID-19 and to keep workers employed.

What period will the JobKeeper scheme cover?

The JobKeeper scheme will be available for the period 30 March 2020 until 27 September 2020.

Turnover

The ATO have confirmed that it is based on estimated GST turnover. This means the ATO will be looking at your Business Activity Statement to see whether it is estimated to have fallen or will fall by 30 per cent or more relative to a comparable period.

What does this mean exactly?

Well it means income which is declared on your BAS quarter or BAS income for a month must be compared to the same period last year.

The test compares the GST turnover of any of the months from March 2020 to September 2020 or the quarters that start on 1 April 2020 or 1 July 2020 with the corresponding period in 2019, with a business satisfying the test where there is a shortfall of 30 per cent or more.

A business can make the comparison by comparing the whole of the month of March 2020 with March 2019, or by comparing the quarter beginning on 1 April 2020 with the quarter beginning on 1 April 2019.

Once an entity satisfies the decline in turnover test, it does not need to retest its turnover in later months. You will still need to notify the ATO of the entity’s current GST turnover for the reporting month and its projected GST turnover for the following month on a monthly basis. This is for their information only.

Which employees are eligible?

Employees can only claim once with one employer. Business owners are confused how to claim for themselves. If you are paid a salary or a wage by your business, you claim as an employee. If you do not get paid a salary or a wage you can claim as a business owner. But you cannot claim both.

In order to claim you should register and pay wages via Single Touch Payroll. Payroll payments should be made using your payroll system and reported to the ATO.

If you do not report through Single Touch Payroll, you can still claim the JobKeeper scheme through a manual claim process, however, we have not been given any details surrounding this.

Once you decide to participate in the JobKeeper scheme, all eligible employees must be covered by the scheme and you will have to tell your employees whether you have nominated them as an eligible employee.

How often will the ATO pay me?

The payments will be made by the ATO monthly in arrears. This means you have to pay your employee and then collect from the ATO later. You will have to ensure your cashflow allows this. You could be out of pocket for a number of weeks.

The ATO is aware that this will present cash flow difficulties but has stated that they expect payments to be made to employees before the ATO will make payment to the business. If businesses do not have the cash to make payment they have advised that businesses should talk to their bank to discuss ‘their options’.

The first period starts on Monday 30 March 2020 and ends on Sunday 12 April 2020.

The final period will start on Monday 14 September 2020 and ends on Sunday 27 September 2020.

If I have stood down employees with the intention of keeping them when things get back to normal do I pay them?

Yes, you need to pay them as long as they are not claiming Jobseekers Allowance.

You can claim the JobKeeper scheme for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them a minimum of $1,500 per fortnight (before tax).

What happens if my business was not in existence 12 months ago or my monthly income is not consistent?

The Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of COVID-19.

The ATO realises that there will be some businesses that do not have all the information available but will still claim. The ATO has said there will be ‘some tolerance’ where employers, in good faith, estimate a 30 per cent decline but actually experience a slightly smaller fall.

If my turnover has not gone down 30% yet but I think it will happen later. Can I still claim?

Yes, but you can only apply when you reasonably expect that your GST turnover will fall by 30 per cent. The ATO will provide guidance about self-assessment of actual and anticipated falls in turnover at a later date so we do not know how this will operate at the moment.

If you claim JobKeeper scheme at a later date it will not be backdated to 30 March 2020.

I operate a business but do not pay a salary or wage to myself. Can I claim?

Yes. People who are self-employed will be eligible for the payment provided:

  • they were actively engaged in the business; and
  • are not entitled to another JobKeeper scheme; and
  • are not a permanent employee of any other employer.

What about partnerships?

You can claim but only one partner can be nominated to receive a JobKeeper scheme along with any eligible employees provided:

  • they were actively engaged in the business; and
  • are not entitled to another JobKeeper scheme; and
  • are not a permanent employee of any other employer.

What about Trusts?

Trusts can receive the JobKeeper scheme for any eligible employees. If you receive a distribution and not a salary, one individual beneficiary can be nominated to receive the JobKeeper scheme provided:

  • they were actively engaged in the business; and
  • are not entitled to another JobKeeper scheme; and
  • are not a permanent employee of any other employer.

Technically, a trust that is loss making cannot pay distributions which means a loss-making trust cannot claim.

What about company directors?

An eligible business can nominate only one director to receive the payment, as well as any eligible employees provided:

  • they were actively engaged in the business; and
  • are not entitled to another JobKeeper scheme; and
  • are not a permanent employee of any other employer.

I have an apprentice. Do I get the JobKeeper and the Training Subsidy?

No.

Eligible small businesses can receive the 50 per cent wage subsidy for apprentices and trainees in the Supporting Apprentices and Trainees measure from 1 January to 31 March 2020, and the JobKeeper scheme.

Where small businesses receive the JobKeeper scheme, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020 onwards.

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Carollo & Co | Business Advisors & Accountants | Mosman
Carollo & Co
Suite 2, 20 Clifford Street
Mosman NSW 2088
T 02 9969 1044
Liability limited by a Scheme approved under Professional Standards Legislation.
Carollo & Co | Business Advisors