$1,500 JobKeeper subsidy to keep staff employed

As we enter the battlefield for another day, the Government has added some more stimulus to our artillery.

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General Scomo announced the third round of stimulus late yesterday (not yet legislated), known as the “Jobkeeper Payment”, targeted at retaining employees and not having to deal with Centrelink.

The JobKeeper payment is a $1,500 payment per fortnight per employee up to 6 months.

The payment is available for all employees on your books at 1 March 2020 that continue to be employed. This includes all full-time, part-time, long-term casuals and stood down employees. Note casual employees are only eligible if they have been with you for at least 12 months as at 1 March 2020.

ELIGIBILITY

There are two levels of eligibility; for employers and employees.

Eligible employers are those with:

  • Turnover below $1bn that have experienced a reduction in turnover of more than 30% relative to a comparable period 12 months ago (of at least a month); or

  • Turnover of $1bn or more that have experienced a reduction in turnover of more than 50% relative to a comparable period 12 months ago (of at least a month); and

  • Are not subject to the Major Bank Levy.

Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.

Employer MUST register to participate in the scheme. The registration is handled by the ATO through this link.

Eligible employees are those who:

  • Were employed by the relevant employer at 1 March 2020; and

  • Are currently employed by the employer (including those who have been stood down or re-hired); and

  • Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March); and

  • Are at least 16 years of age; and

  • Are an Australian citizen, hold a permanent visa, are 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.

PAYMENT

Eligible employers will be paid $1,500 per fortnight per employee.

Eligible employees will receive, at minimum, $1,500 per fortnight, before tax. Employers will be able to top up the payments as applicable.

If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment (see example).

TIMING

The first payment will be made in May 2020, but backdated to 30 March 2020.

Payments will be made to the employer monthly in arrears from the ATO.

EXAMPLES

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% in in the coming months. The employees are:

Both Anne and Nick are still working in the business.

Employee

Employment type

Salary per fortnight (before tax)

Anne

Full-time

$3,000

Nick

Part-time

$1,000

Adam registers his interest in the JobKeeper scheme (from 30 March 2020), then applies to the ATO providing details of his eligible employees. Adam also advises Anne and Nick 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.

Adam’s business is eligible to receive the JobKeeper Payment for each employee.

For Anne, the business will:

  • Continue to pay Anne her full-time salary of $3,000 per fortnight before tax,

  • Receive $1,500 per fortnight from the JobKeeper Payment

  • Pay superannuation guarantee on Anne’s salary

For Nick, the business will:

  • Continue to pay Nick $1,000 per fortnight before tax salary

  • Pay Nick an additional $500 per fortnight before tax (totalling $1,500)

  • Receive $1,500 per fortnight from the JobKeeper Payment

  • Pay superannuation guarantee on Nick’s wage of $1,000 per fortnight (but can choose to pay SG on the full $1,500)

 Adapted from Treasury fact sheet: JobKeeper payment — information for employers

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Get in touch with m+h Private tax specialists today on +61 3036 7174 if you need support for you and your business.

As always, the above is general in nature, please discuss with your trusted advisor.

 

James Hoeft