What is the JobKeeper Measure?
On April 8, 2020 both houses of parliament passed legislation to implement the JobKeeper subsidy payment. The package of four Bills aims to provide the framework of the plan announced by the Prime Minister on 30 March, 2020.
With the JobKeeper payment, the Australian government is allowing businesses impacted by the Coronavirus to access a subsidy that will allow them to continue paying their employees. 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.
The JobKeeper scheme runs for a total of thirteen fortnights (26 weeks), with the first fortnight retrospectively being 30/03/2020-12/04/2020 and the last fortnight being 14/09/2020-27/09/2020.
Eligible payees, whether they are still working or have been stood down due to their employer’s business having to be shut down, will receive a minimum payment of $1,500 a fortnight through their employer. That is, if an employee earns less than $1,500 they will receive $1,500 a fortnight regardless. If an employee earns more than $1,500, they will be paid what they have earned, with the employer being subsidised a $1,500 portion of the earnings.
Please note that care has been taken to ensure that the information provided about the JobKeeper scheme and how to pay and report JobKeeper payments is as accurate as possible. However, because of the lack of lead-time between the announcement of the scheme, the passing of the legislation and the retrospective effective start date, some details are still subject to change. We will provide updates to this page, as more information is confirmed by the Government and the ATO.
Which Employers Are Eligible for JobKeeper?
To be eligible for the subsidies, a business must meet either of the following conditions:
- Have a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago
- Have a turnover of more than $1 billion and their turnover will be reduced by more than 50% relative to a comparable period a year ago.
Which Employees Are Eligible for JobKeeper?
An employer can claim the subsidy for any employees who meet the following criteria:
- Are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020*);
- Are at least 16 years of age;
- Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, 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; and
- Are not in receipt of a JobKeeper Payment from another employer
This includes payees who:
- Have been stood down
- Had their employment terminated after that date but have since been re-hired.
- The payee must be employed on a full-time, part-time or long-term casual basis by the eligible employer (for more information, see www.ato.gov.au/jobkeeper).
- The payee must be at least 16 years old
- The payee must be one of the following:
- An Australian citizen
- A holder of a Permanent visa
- A holder of a Protected Special Category visa
- A holder of a Non-protected Special Category visa who has been resided in Australia continually for at least 10 years
- A holder of a Special Category (Subclass 444) visa
- The payee must not be receiving JobKeeper subsidies from another employer.
To help with this, all FastTrack360 customers have had a custom-built report added to their report library to help identify eligible payees.
*Note that the Federal Industrial Relations Minister has advised that the definition of ‘employed on a regular basis’ for a casual will be applied based on the FairWork definition of regular and systematic employment for a casual employee which states the following:
It is the employment that must be on a regular and systematic basis, not the hours worked. However, a clear pattern or roster of hours is strong evidence of regular and systematic employment.
The term ‘regular’ implies a repetitive pattern and does not mean frequent, often, uniform or constant.
The term ‘systematic’ requires that the engagement be ‘something that could fairly be called a system, method or plan’.
Where there is no clear pattern or roster, evidence of regular and systematic employment can be established where:
- the employer offered suitable work when it was available at times that the employee had generally made themselves available, and
- work was offered and accepted regularly enough that it could no longer be regarded as occasional or irregular.
What Does an Employer Need to Do to Claim the Subsidies?
The following is a summary of the actions you must take before 30 April, 2020 if you are an eligible employer under the JobKeeper scheme to ensure that you can receive reimbursements for payments made to eligible payees in April.
- Enroll for the JobKeeper scheme (you can do this from 20 April, 2020 onward). For more information, see ‘How Does An Employer Enroll for JobKeeper?’ (below).
- Send your eligible payees who you are choosing to include in the scheme a JobKeeper employee nomination notice and have them complete the notice by 30 April, 2020.
- In your payroll solution, setup allowance pay codes that will be used to identify the relevant JobKeeper start and finish fortnights as well as the allowance pay code against which you will pay top-up payments to payees who earn less than $1,500 in a fortnight. For FastTrack360 clients, we have created an extensive JobKeeper guide to help you manage this process including publishing a free report in your FastTrack360 platform to help you identify eligible payees.
- Start paying JobKeeper payments by 30 April, 2020 (i.e. with a payment date no later than 30 April, 2020) retrospectively and submit the relevant pay batches through Single Touch Payroll (STP). Alternatively, if you have already made payments in April, you may need to run adjustment pays to correct how you have made the payments and so that the payments can be reported correctly though Single Touch Payroll.
On 04 May, 2020 you will be required to verify the JobKeeper payments you have made for the month of April and to sign-off a declaration. Once you have signed off on the declaration, the JobKeeper payments that you reported for April will be reimbursed into the bank account that you nominated at the time of enrollment.
How does an Employer enroll for JobKeeper?
As an employer, you can enroll for JobKeeper via the ATO Business Portal from Monday 20 April, 2020. To enroll you will be required to do the following:
- Provide information about the monetary turnover of your business to ensure that you qualify for the scheme
- Select which of your eligible payees you want to include in the scheme
- Provide details of the bank account into which you want reimbursement payments to be paid each month.
For more information about enrolling for JobKeeper, please refer to the following page on the ATO website: https://www.ato.gov.au/general/jobkeeper-payment/employers/enrol-and-apply-for-the-jobkeeper-payment/
When Will Employers Get the Subsidy Payments?
Employers will receive reimbursement for JobKeeper payments that they have made on a monthly basis in arrears. There will be a declaration process that employers will need to complete each month in relation to payments employers made in the previous month, whereby employers must verify the payment information employers have submitted via STP reporting. For example, on 04 May, 2020 employers will need to sign-off a declaration to confirm the JobKeeper payments made for the month of April. Employers will need to do this via the ATO Business Portal.
Once employers sign off the declaration for the previous month, they will be reimbursed for the JobKeeper payments made for the corresponding month. The payment will be made into the bank account employers nominated at the time of enrolling for JobKeeper
What Are the Taxation, Superannuation and Reporting Requirements for the Subsidy Payments?
The subsidy will be subject to PAYG withholding and will therefore need to be reported via STP.
The subsidized portion of a payee’s pay will not be subject to mandatory employer superannuation contributions (i.e. SG or award contributions). For example, if a payee earns $1,000 in a fortnight, they will be paid $1,500 for the fortnight but the employer will only be required to pay super based on the $1,000 and not the full $1,500 but can choose to pay super on the full amount if they choose to. If an employee earns more than $1,500 a fortnight, the entire pay amount is superable, assuming the entire amount constitutes Ordinary Time Earnings.
There are three separate components for reporting JobKeeper payments. These are:
- Reporting the JobKeeper start fortnight
- Reporting the top-up amount for each JobKeeper fortnight
- Reporting the JobKeeper finish fortnight
For FastTrack360 customers, details of these reporting requirements are included in the extensive JobKeeper Guide in Online Help.
What Is Unknown/To Be Confirmed At This Stage?
- Will the subsidy payments be subject to payroll tax?
- Will the subsidy payments be subject to WorkCover?
FastTrack are actively working with the ATO/Digital Partnership Office as part of the COVID-19 focus group. We will share further information as it becomes available.
For FastTrack360 customers an extensive guide for the JobKeeper scheme is now available in Online Help. Please chat to our Customer Support team or your Account Manager if you need further information.
Frequently Asked Questions
Q – If an eligible payee earns more than $1,500 in any of the JobKeeper fortnights, can I reduce the payee’s earnings to $1,500 so that the JobKeeper subsidy covers the payee’s entire earnings for the fortnight?
A – No. You are still obligated to pay the payee according to the applicable award/industrial instrument or employment contract. Where the hours worked and the applicable rates of pay are such that the payee’s earnings exceed the equivalent of $1,500 for a given fortnight, you are obligated to make up the difference between the $1,500 that will be subsidized by the government and the payee’s total gross earnings for that period.
Q – Am I obligated to enroll all my payees who meet the JobKeeper eligibility criteria?
A – Yes. If your business enrolls in JobKeeper you are obligated to include all payees, who meet the eligibility criteria, in the scheme.
Q – If an eligible payee earns $1,500 or more during a JobKeeper fortnight, am I obligated to pay superannuation contributions on the payee’s entire earnings for that fortnight?
A – Yes, if those earnings would normally be superable (i.e. the earnings are entirely made up of Ordinary Time Earnings) then you are obligated to pay superannuation on the entire amount.
Q – If an eligible payee has earnings for a JobKeeper fortnight but they are less than $1,500 and I need to top-up the earnings to $1,500, am I obligated to pay superannuation contributions on the entire $1,500, only on their actual earnings or only on the top-up amount?
A – The top-up amounts are not superable and therefore if you are topping up a payee’s earnings, you are only obligated to pay superannuation on the actual earnings (or the part thereof that constitute Ordinary Time Earnings). If a payee has been stood down for the entire fortnight, and therefore you are topping up the entire $1,500, the entire amount is not superable.
Q – Are there any special requirements for reporting JobKeeper payments on payslips?
A – No. However, it is advisable to name the allowance pay code against which top-up payments will be made in a way so that payees will be able to clearly tell that they have received a top-up payment.
For more information please refer to the following resources:
Plus, check out our dedicated COVID-19 page with a range of additional resources here – https://fasttrack.com.au/covid-19-resources-for-recruitment-and-staffing-businesses/