JobKeeper payments – your questions answered
The Australian Government’s JobKeeper package first announced in mid-March has now been passed by parliament and will be rolled out over the coming weeks. Designed to support businesses affected by the COVID-19 pandemic to retain staff, the initiative will provide an estimated $130 billion to eligible businesses across Australia to subsidise the wages of their employees.
The Coronavirus has had an unprecedented impact on businesses, with retail and hospitality among the hardest hit. Hundreds of thousands of employees have been stood down, made redundant, or had their working hours cut back. The JobKeeper initiative aims to help businesses retain these workers, and keep our economy afloat through these difficult times.
With information about the payments trickling out over the past few weeks, there is some confusion around exactly who is eligible, how to apply, and when the JobKeeper payments will come into effect. That’s why we’ve put together this handy Q&A to help you understand what support your business might receive.
What is the JobKeeper payment?
The aim of the JobKeeper Payment to help eligible businesses and not-for-profits affected by COVID-19 retain employees. It will provide employers with $1500 per fortnight for each eligible employee, helping alleviate the financial pressures caused by the outbreak, by subsidising employee’s wages. The subsidy will be paid monthly in arrears by the Australian Tax Office (ATO).
Is my business eligible for JobKeeper support?
Your business will be eligible for the JobKeeper subsidy if you:
- Have a turnover of less than $1 billion and estimate your turnover has fallen or is likely to fall by 30 per cent or more in a month-long period compared with last year.
- Have a turnover of $1 billion or more and estimate your turnover has fallen or is likely to fall by 50 per cent or more in a month-long period compared with last year.
You must satisfy the decline in turnover test when you apply for the subsidy through the ATO. This test is not a one-off, and you will need to check you continue to meet the eligibility either monthly or quarterly, depending on how you are measuring your decline in turnover.
Are my employees eligible for JobKeeper support?
To be eligible for JobKeeper support, your employees must have been employed by your business at 1 March 2020, and must still be employed by your business. This includes employees who have been stood down or re-hired. You must have paid your employees before they are entitled to receive the JobKeeper payment.
Both full and part-time employees are eligible, as are casuals who had been employed on a regular basis for more than 12 months as of 1 March. Employees must also be over the age of 16, a resident for tax purposes, and either an Australian citizen, the holder of a permanent visa or a special category visa, on 1 March 2020. They must not be receiving a JobKeeper payment from another employer.
How much will my business receive?
Businesses will receive $1500 a fortnight for each eligible employee, payable monthly by the ATO. This is 70 per cent of the median Australian wage.
How much of the subsidy do I need to pass on to my staff?
Businesses must pass on the full amount of the subsidy to their employees. If an employee is usually paid less than $1500/fortnight, or has been stood down, you must pay them the full amount. If an employee usually makes more than $1500/fortnight, the employer is expected to make up the gap.
When do I need to pay employees by?
As of 25 April, the ATO has announced that employers now have until 8 May (previously 30 April) to ensure all eligible employees have been paid $1500 (before tax) for JobKeeper fortnights 1 and 2 (30 March – 12 April, and 13 April – 26 April respectively). If employees are not paid by 8 May, employers will not be able to claim JobKeeper for the first two fortnights.
This extension date allows more time for employers to consider their circumstances and pay staff and still be eligible for those payments. Employers now have until 31 May to formally enrol to claim the JobKeeper payments for fortnights 1 and 2; however, the sooner an employer pays their staff for those April fortnights and enrols, the sooner the ATO can reimburse them the JobKeeper payments.
What important dates should I be aware of?
Here are the key dates you need to be aware of:
- From 20 April: Enrol for JobKeeper payment.
- 4 May onwards: Identify your employees and claim your first reimbursement
- By 8 May: Pay your employees $1500 for each fortnight to claim JobKeeper payments for April
- 31 May: Final date to enrol to claim for JobKeeper fortnights in April and May
- Each month: Reconfirm eligibility.
Can I reduce my employees’ salaries?
All the usual employment contracts and regulations still apply, which means you can’t reduce an employee’s salary to $1500/fortnight.
Can I reduce staff hours?
You can only reduce the hours your employees work if there is less work for them than usual because of COVID-19. This may bring their pro rata pay down to $1500 per fortnight.
Can I ask my staff to take leave?
JobKeeper payments can be used to subsidise holiday pay. You can ask your staff to take leave, but this must be mutually agreed, and employees must have at least two weeks annual leave remaining in their leave balance after they have taken this leave.
Do I need to pay superannuation?
Superannuation continues to apply to ordinary paid earnings. If an employee is stood down and only receives $1,500 per fortnight, the employer does not need to pay superannuation on this. If an employee normally receives less than $1,500 per fortnight, the employer only needs to pay super on the employee’s ordinary earnings, i.e. not on the top-up to $1,500.
What if my employees are not eligible?
Employees who are not eligible for the JobKeeper payment may be eligible for JobSeeker support instead. They will need to apply for these benefits through Centrelink.
How do I pay my employees during this time?
You should pay your employees using your usual payroll software system, and report this to the ATO via Single Touch Payroll (STP). This will help support the online claim process when it is available. If you are not using STP there will be a manual claim process for the JobKeeper payment.
How do I claim the JobKeeper payment?
The Australian Government has not yet released all the details on exactly how businesses can claim the JobKeeper payment. You can register your interest on the ATO website to keep updated on all the latest information about the JobKeeper payment.
What dates are covered by JobKeeper?
Businesses will be able to claim JobKeeper payments for the period 30 March 2020 to 27 September 2020.
When will I receive the first payment from the ATO?
If you have made a claim, you should receive the first payments by the ATO in by 14 May. Payments will be made each month, in arrears.