Further clarification on the $130 billion helping hand for businesses and their employees.
The employer is eligible if the turnover of the business has dropped or is likely to drop by:
- 30% or more for businesses with aggregated turnover of less than $1billion; or
- 50% or more for business with aggregated turnover $1 billion or more; or
- 15% or more for charities registered with the Australian Charities and Not-for-profits Commission, this applies to GST Turnover.
Eligible Employees of the above business are:
- Those employed by the business as at 1 March 2020 and are currently still employed, including those who have been stood down and re-hired;
- Casual employees who have been employed on a regular and systematic basis for longer than 12 months as at 1 March 2020;
- Casual employees who are not permanent employees of another employer
- Aged 16 years or older at 1 March 2020;
- Was an Australian Citizen, held a permanent visa, or a Special category (Subclass 444) Visa at 1 March 2020;
- Was an Australian tax resident on 1 March 2020;
- Does not receive a JobKeeper payment from another employer.
- Has received $1,500 per fortnight before tax in each JobKeeper fortnight.
Entities excluded are:
- The Australian Government and its agencies;
- State and Territory governments and their agencies;
- Foreign governments and their agencies;
- Local council governments;
- Corporations wholly owned by any of the above;
- A business subject to the Major Bank Levy;
- Companies where a liquidator or provisional liquidator has been appointed; and
- Sole traders where a trustee in bankruptcy has been appointed.
Turnover is tested for a calendar month that ends after 30 March 2020 and before 1 October 2020 or a quarter that starts on 1 April 2020 or 1 July 2020. It is compared to that same period in 2019.
It is the projected GST Turnover which is used for the test. Projected GST turnover includes all taxable and GST free supplies but not input taxed supplies. It includes all turnover that has been received and will likely be received in that period. Charities may also include donations. Foreign income is not included.
What if I wasn’t in business a year ago?
The Commissioner has discretion to determine an alternative test and to consider additional information to determine that the turnover has reduced due to COVID-19.
The alternative test may be a comparison of the average monthly income since the business started until 30 March 2020 compared to April 2020 turnover.
What if the 2019 turnover does not represent normal trading?
The Commissioner also has discretion to determine an alternative test in this case. The comparison period may be a period before the unusual trading conditions started. E.g. April 2017 turnover compared to April 2020 turnover.
You will only have to prove the decline in turnover once although you will have to report the turnover for the current month and projected turnover for the next month when submitting the claim each month.
The JobKeeper payment covers the period from 30 March 2020 to 27 September 2020.
Claims for the first payment open on 4 May 2020. This claim will cover the first two JobKeeper fortnights being 30 March – 12 April and 13 April – 26 April. The Commissioner is required to make payment to the employer within 14 days.
You must have paid each of your eligible employees at least $1,500 per fortnight before tax. If your pay period is longer than a fortnight then as long as the equivalent of $1,500 per fortnight is paid this will suffice. The ATO has provided a concession for the two fortnights in April stating that they must be paid by the end of April 2020.
If employees normally salary sacrifice their wage and wish to continue, this is allowable.
If you have employees that have received Paid parental leave, Dad and Partner pay or Workers Compensation payments, a JobKeeper payment cannot be claimed for those employees for that period. Once the employee ceases receiving these payments they may be eligible for JobKeeper. Also, those employees partially returning to work from Workers Compensation, where the employer pays the wage, may also become eligible.
If you have claimed the Apprentice and Trainee wage subsidy and then claim JobKeeper you will not be eligible for the Apprentice and wage subsidy from 1 April 2020.
If an employee nominates more than one employer to receive JobKeeper then the employee becomes ineligible and remains ineligible for the whole JobKeeper claim period i.e. 27 September 2020. If the employee is overpaid the employee becomes joint and severally liable for the repayment plus any general interest charge.
All payments received by the employer are assessable income of the business but are not subject to GST and payments made to employees are assessable income to the employee.
Superannuation continues to be required to be paid on the ordinary wage employees receive i.e. the wage the employee has worked for.
It is up to the employer if they would like to pay superannuation on any top up amounts paid to the employee as a result of the JobKeeper payment.
Business owners may claim if they have not been nominated by another employer as follows:
– Sole Traders: may claim for themselves;
– Trusts: only one adult beneficiary of the Trust may claim;
– Partnerships: only one partner may claim;
– Companies: only one director or shareholder may claim.
These businesses would also claim for their eligible employees.
Business must have had an ABN as at 12 March 2020.
The business must have also had:
(a) amount included in assessable income for the 2018-2019 income year in relation to the business and the tax return had been lodged by 12 March 2020 or at a later date allowed by the Commissioner; or
(b) made a taxable supply in a period that:
(i) started on or after 1 July 2018; and
(ii) ended before 12 March 2020; and
the BAS had been lodged before 12 March 2020 or at a later time allowed by the Commissioner.
Business owners must be actively engaged in the business at 1 March 2020 and in the fortnight you are claiming for. All other eligibility requirements must be met for employers and employees, except the requirement to pay the $1,500 to the owner claiming the payment. The payment may be made to the business.
Enrolment opened on the 20th April 2020 through your ATO Business Portal or your tax agent. If you will be claiming for the April payment this can be done by the 31st May 2020. Enrolment may occur by the end of a JobKeeper fortnight to claim for that fortnight, for claims in later months.
To enrol you will need to declare on the ATO online form that you are an eligible business, satisfy the turnover test and in which period you satisfy the turnover test.
Businesses enrolling for an eligible business participant only will need to fill in an online form stating the bank account details for the payment to be credited. This can be a business or personal account.
If your business meets the eligibility for April 2020, you can submit a claim on the 4th May providing the employees details for whom you are claiming. You must claim for all eligible employees, which will be indicated by the receipt of a JobKeeper Employee Nomination Form. Business owners must retain copies of these forms for five years.
In the months going forward you need to notify the ATO by a form if an employee becomes ineligible i.e. they have resigned.
You can opt out of the scheme at any time but you cannot re-enter if you make this election.
For information on what you can and can’t do in relation to staffing and JobKeeper please refer to https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/business-closures-during-coronavirus.
Please contact YBM to assist with your JobKeeper claim.
02 6362 1533
27 Sale St
(PO Box 843)
02 6332 5946
1/205 Howick St
(PO Box 1380)
02 6366 8049
11 Bank St
(PO Box 31)
By Karen Bollinger – YBMYates Baker McLean. Accountants and Business Advisors situated in the Central West of NSW. Offering comprehensive advice for all your financial needs including tax, auditing, business advisory, self managed super funds, specialised industry experience and financial planning.