Which businesses are eligible?
Eligible employers are businesses (including companies, partnerships, trusts, sole traders), not for profits and charities:
• with a turnover of less than $1 billion whose turnover has fallen by more than 30% (of at least one month), or
• with a turnover of $1 billion or more whose turnover has fallen by more than 50% (of at least one month).
• Big banks subject to the Major Bank Levy are not eligible.
Most businesses are expected to be able to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier in 2019.
However where a business’s turnover a year earlier is not representative of their usual or average turnover, (e.g. because there was a large interim acquisition or their turnover is typically highly variable) the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of COVID-19.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business has ceased or significantly curtailed its operations).
There will also be some tolerance where employers, in good faith, estimate a greater than 30 % (or 50%) fall in turnover but actually experience a slightly smaller fall.
Eligible employees include full time and part time employees, including stood down employees. Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the Payment. Apprentices and trainees may also be eligible for the JobKeeper Payment. An employee will only be eligible to receive this payment from one employer.
The subsidy will include not for profit employees and New Zealanders who work in Australia but are typically unable to access welfare support. Self-employed individuals are also eligible to receive the JobKeeper Payment.
The subsidy is aimed at preventing workers from being stood down.
The Australian Government has put together a fact sheet dedicated to employers for more information.
What about my employees?
• were employed by the employer at 1 March 2020
• are currently employed by the employer (including those stood down or re-hired)
• 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) or a sole trader
• are at least 16 years of age
• are an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa (all other temporary visa holders are not currently eligible), and
• are not in receipt of a JobKeeper Payment from another employer
• apprentices and trainees may also be eligible for the JobKeeper Payment, provided that they meet all of the relevant employee eligibility requirements.
If your employee was on your books on 1 March 2020 and continues to be engaged by you – either as a full-time, part-time, long-term casual, or they have been stood down – they are eligible to receive the payment.
If you have stood down an employee in this period and they are now receiving welfare payments (e.g. JobSeeker), they are eligible for the JobKeeper payment but must advise Service Australia of their new income.
If your employee is employed by multiple businesses, they are only eligible for one JobKeeper payment. Ask your employees if you are their primary employer – if yes, you must include them in your application to the Australian Taxation Office (ATO).
If you are not their primary employer, do not list them in your application.
The Australian Government has put together a fact sheet dedicated to employees for more information.
What are your obligations as an employer?
The subsidy will be run by the Australian Taxation Office and will allow the government to ensure employers are passing the payment onto their employees.
If your employee currently earns less than $1,500 a fortnight before tax, they must still receive the full JobKeeper payment. The subsidy is not proportionate to an individual’s salary.
You can also choose to pay your employees an additional wage on top of the $1,500 a fortnight if possible, but it is not mandatory.
How to apply
From 20 April 2020 employers (or your registered tax professional) can enrol for the JobKeeper payment:
Step 1 – Register your interest and subscribe for JobKeeper payment updates.
Step 2 – Check you and your employees meet the eligibility requirements.
Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).
Step 4 – Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
Step 5 – Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one.
Step 6 – From 20 April 2020, you can enrol with us for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
Step 7 – In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example, if you are a sole trader.
Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).
Please note: The ATO has determined if your business enrol sfor the JobKeeper payment by 31 May you will be able to claim for the fortnights in April and May, provided your business meets all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight. For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your employees by this date, you will not be able to claim JobKeeper for the first two fortnights.
From 4 May onwards you (or your registered tax agent) will be able to apply for the JobKeeper payment for your eligible employees.
Step 1 – Apply to claim the JobKeeper payment by logging in to the ATO Business Portal
Step 2 – Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.
Step 3 – Identify your eligible employees in the application form by
- selecting employee details that are prefilled from your STP pay reports if you report payroll information through an STP enabled payroll solution, or
- manually entering employee details in ATO online services or the Business Portal if you do not use an STP enabled payroll solution, or
- using a registered tax agent who will submit a report on your behalf through Online services for agents.
Step 4 – Submit the confirmation of your eligible employees online and wait for the confirmation screen.
Step 5 – Notify your eligible employees you have nominated them.
Step 6 – We will pay you the JobKeeper payment for all eligible employees after receiving your application.
Step 7 – Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via your registered tax agent. This will ensure you will continue to receive the JobKeeper payments from us. You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.
Step 8 – If your eligible employees change or leave your employment, you will need to notify us through your monthly JobKeeper Declaration report.
If you use the ATO Business Portal, you will need a myGovID linked to your ABN in relationship Authorisation Manager (RAM). You can find out how to set this up at ato.gov.au/mygovid
If you are self-employed you will need to provide:
- your ABN
- your tax file number
- supporting documents that demonstrate your business has seen, or will see a 30% decrease in revenue.
Remember to communicate clearly to your employees during this time. They are not required to apply for the payment like other welfare payments (e.g. JobSeeker). The JobKeeper payment is to be paid directly to employees through your payroll system.
How long will the payment last?
The JobKeeker payment is a temporary measure that will last 6 months. The purpose of the subsidy is to help businesses keep their employees and be able to quickly re-start once the COVID-19 health crisis is over.
The first payment is expected to go out in the first week of May and be backdated to Tuesday 30 March when the subsidy began. Payment will be made to the employer monthly in arrears by the ATO.
Australian Tax Office: JobKeeper Payment registration.
Stay up to date with the most recent COVID-19 announcements relating to your business here. You can also explore our free Business Guide to Coronavirus for dedicated advice, support and solutions to help your business through these uncertain times.