In order to keep your business running smoothly during this time of uncertainty, our Payroll team has kindly compiled all of the details regarding the Australian JobKeeper subsidy in response to the COVID-19 coronavirus crisis.

 

All of the following information is valid as of the 24th of September but will continue to be updated as the situation evolves. Don’t hesitate to bookmark this page and refer back to it for convenience.

 

What is JobKeeper?

The JobKeeper Payment scheme is a temporary subsidy for businesses significantly affected by COVID-19.

Created to reduce job loss, or in simpler terms “keep jobs”, the program helps businesses by giving them financial aid specifically for their employees’ salaries.

Eligible employers, sole traders and other entities can apply to receive financial help per eligible employee per fortnight.

 

How long will JobKeeper last?

Originally set to run from the 30th of March until the 27th of September 2020, the Australian government announced on the 21st of July 2020 that they would be extending the JobKeeper scheme by a further six months to the 28th of March 2021.

It’s worth noting that there are two separate extension periods.

 

Is my business eligible?

September 2020

From the 28th of September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).

They will need to demonstrate that they have met the relevant decline in turnover test over both the June & September quarters to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.

The reference date for assessing which employees are eligible for the JobKeeper Payment is now the 1st of July 2020 with effect from the 3rd of August 2020.

The reference period for employees regarding their hours works to determine what their tier of payment will be based on their two fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible on the 1st of March 2020.

 

January 2021

From the 4th of January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment.

They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December 2020 quarters to remain eligible for the JobKeeper Payment from 4th of January 2021 to 28 March 2021.

 

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

– 50% for those with an aggregated turnover of more than $1 billion;

– 30% for those with an aggregated turnover of $1 billion or less; or

– 15% for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

 

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020.

The JobKeeper Payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

Other eligibility rules for businesses and not-for-profits and their employees remain unchanged. Further information on those rules, head here.

 

March 2020

From March to September 2020, employers were eligible for the JobKeeper payment if all of the following apply:

On 1 March 2020, you carried on a business in Australia, or were either:

– a not-for-profit organisation that pursued your objectives principally in Australia, or

– deductible gift recipient (DGR) endorsed either, as a public fund or for a public fund you operated, under the Overseas Aid Gift Deductibility Scheme (DGR item 9.1.1) or for developed country relief (DGR item 9.1.2)

– You employed at least one eligible employee on 1 March 2020.

– Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).

– Your business has faced either a

  • 30% fall in turnover (for an aggregated turnover of $1 billion or less)
  • 50% fall in turnover (for an aggregated turnover of more than $1 billion)
  • 15% fall in turnover (for ACNC-registered charities other than universities and schools).

 

 

What are the JobKeeper Payment Rates?

From the 28th of September 2020 to the 3rd of January 2021 there will be 2 payment tiers available:

Tier 1

$1,200 per fortnight (before tax)

– For all eligible employees who worked in the business or not-for-profit for 80 hours or more  in the four weeks of pay period, and

– For eligible business participants who were actively engaged in the business for 80 hours or more in February 2020.

Tier 2

$750 per fortnight (before tax) for other eligible employees and business participants.

 

From the 4th of January 2021 to the 28th of March 2021, payments are reduced and there are still 2 tiers to consider:

Tier 1

$1,000 per fortnight (before tax)

– For all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 80 hours or more in the four week pay periods and,

– For eligible business participants who were actively engaged in the business for 80 hours or more in February 2020.

Tier 2

$650 per fortnight (before tax) for other eligible employees and business participants.

 

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

Employers can be eligible for JobKeeper Extension 2 even if they were not eligible for JobKeeper Extension 1.

The Commissioner of Taxation will have discretion to set out alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 reference period. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020.

Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.

 

March 2020

From the the 30th of March to the 28th of September 2020, the JobKeeper Payment rates will be:

$1,500 per fortnight (before tax)

– For all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and

– For eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and

 

The JobKeeper Payment will continue to be made by the ATO to employers in arrears. Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee. This is called the wage condition.

 

Should you need tailored help to apply to the JobKeeper program, please don’t hesitate to reach out to us directly. Our local payroll team is ready to help your business ride the wave.

 

About the Author:

Crystal is Polyglot Group's Head of Payroll Services - ANZ and an expert in International Payroll. Working with clients from all over the world, Crystal has made it her mission to bring a human approach to Payroll by sharing her technical knowledge & educating those around her.
Read more about Crystal Li.