Businesses large and small have welcomed the news that the JobKeeper payment will be continuing into next year. It will take all of us a little while to find our feet again. You are probably wondering if your employees are eligible for JobKeeper 2.0, and what other changes this might mean for you and your workers.
This article will get into the basics of these changes and how they affect your business.
The ABC of business… Always Be Changing
Your business has never needed to be on top of changing news quite like this year, right? You are probably a little tired of words like pivot and adapt.
But adapt we must to keep our businesses alive, and the JobKeeper payments may go a small way to helping you get through this tough financial time. Being able to keep trusted employees on your payroll is probably a high priority for you, as is having the right people ready to kick back into action when business gets going again.
The extension to JobKeeper commenced on 28 September and can be claimed up until 30 March 2021. There are several key differences to the first round of JobKeeper, the main ones being:
- You will need to meet actual decline in income tests rather than the projected decline (this will be applied to the business quarter prior to the period in which you are claiming JobKeeper)
- There will be two tiers of payment levels, one for employees working 80 hours a fortnight or over, and a second for those who work less than this
- These payments will be lower than the original round.
- You can claim for new employees you have taken on since 1 March but before 1 July 2020
- There will be two rounds of extension payments and test periods, Extension 1 – from 28 September 2020 to 3 January 2021, and Extension 2 – from 4 January 2021 to 28 March 2021.
For the full details around business and employee eligibility for JobKeeper 2.0 you should check out the ATO information pages here:
https://www.ato.gov.au/General/JobKeeper-Payment/
We cover general eligibility terms below.
Eligible Businesses
To be eligible for JobKeeper, you must have been conducting business or running a registered not-for-profit in Australia on 1 March 2020. You must employ at least one eligible employee who fits the eligibility criteria in the next section. And you must meet a decline in earnings test for every fortnight that you claim the JobKeeper payment for, which means your business must have suffered at least a 30% downturn in income during the relevant period.
In the first round of JobKeeper, it was sufficient to state that your business had suffered a reduction in income based on your own projections. From 1 October, when making claims for each fortnight, you have to have met an actual decline in turnover tests.
According to the ATO:
“The actual decline in turnover test is similar to the original decline in turnover test. However:
- it must be done for specific quarters only
- you must use actual sales made in the relevant quarter, not projected sales, when working out your GST turnover
- you must allocate sales to the relevant quarter in the same way you would report those sales to a particular business activity statement if you were registered for GST.
The actual decline in turnover test must be satisfied to be eligible for both JobKeeper extension periods:
- Extension 1 – from 28 September 2020 to 3 January 2021, and
- Extension 2 – from 4 January 2021 to 28 March 2021.”
For Extension 1 you complete your actual income for the business quarter ending 30 September, then for Extension 2 you will use your actual income for the quarter ending 31 December.
You need to show that your business income for the relevant 2020 business quarter has declined by more than 30% when compared to the equivalent quarter in 2019.
Source:
https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/Actual-decline-in-turnover-test/
Eligible Employees
JobKeeper 2.0 includes all employees who were eligible for the first round, and also any new employees you have employed after 1 March but before 1 July 2020.
There are two tiers of payments – Tier 1 which can be claimed for employees who worked over 80 hours in the relevant fortnight, and Tier 2 for those who worked less.
For more details on how to work out which tier your employees will fit into, see here:
https://www.ato.gov.au/General/JobKeeper-Payment/Payment-rates/80-hour-threshold-for-employees/
For Extension 1, Tier 1 employees will receive $1200 fortnightly, and Tier 2 employees will receive $750 fortnightly (before tax).
For Extension 2, these payments will reduce again slightly, to $1000 fortnightly for Tier 1 and $650 fortnightly for Tier 2.
Eligible employees must be either non-casual or can be long-term casual who have been working consistently for over 12 months. They must be over 18 and Australian residents for tax purposes.
They must not be currently in receipt of several government payments, including parental leave, and must not receive a redundancy payment.
Employees can only receive JobKeeper through one employer, so if they have multiple jobs they must choose which employer to receive the payment through.
You need to inform your employees that you are going to claim JobKeeper for them, and get them to complete a JobKeeper employee nomination notice and return this to you. You keep the form on file and confirm to the ATO that you have received it for each relevant employee.
You can get more details and download the forms here:
https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/
What You Need To Do Now
If you intend to claim JobKeeper 2.0, you need to head to the ATO website and enrol your business if you haven’t done so already. Then you need to get each affected employee to complete a nomination form, after which you will enrol them as an eligible employee.
You will need to complete the Extension 1 actual decline in income test, showing your actual income for the July, August, September quarter 2020. It must have been at least 30% less than the same quarter in 2019.
At the end of each month, you can go into your account and claim for the fortnightly periods covered in that month. You will then be back paid your JobKeeper payments for that month, which you will be responsible for distributing to your employees.
If you need assistance with this, please contact Kate from Sense in Numbers on 0459 504 997.
