How can you cooperate with your tax agent to apply the JobKeeper program successfully?
The federal government’s JobKeeper program was discussed in last month’s insight. Right here, we have a summary on what you will need to do if your business is joining the JobKeeper Program.
Access to the JobKeeper Payment scheme will be the difference between being able to continue employing your staff or terminating the employment.
The ATO has released the following advice in relation to tax agents registering their clients for the JobKeeper Payment scheme.
Tax and BAS agents play an important role in helping businesses affected by coronavirus (COVID-19). A legislative instrument was registered on 16 April 2020 to allow registered BAS agents to provide services to support the JobKeeper Payment scheme.
You may be eligible to access the JobKeeper payment to continue to pay your employees. As employers, you can choose to participate in the JobKeeper Payment scheme and nominate your eligible employees. It is not compulsory for employers to participate.
Here is the key information required for us in managing JobKeeper payments on your behalf as our esteemed client. If you have not engaged with us before, please do drop your details in our contact page (click here) or mail us at firstname.lastname@example.org right now.
Working out eligibility
You will be eligible for the JobKeeper payment if:
- On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that operated in Australia.
- You employed at least one eligible employee on 1 March 2020 (there are also some special rules for selfemployed).
- Your eligible employees are currently employed by your business for the fortnights you start to claim for, and continue to claim for (including those who are stood down or re-hired).
- Your business has faced either a:
– 30% fall in turnover (if the aggregated turnover is $1 billion or less);
– 50% fall in turnover (if the aggregated turnover is more than $1 billion); or
– 15% fall in turnover including donations and gifts (if you are an ACNC-registered charity and not a university or school).
- You pay your eligible employees at least $1,500 (before tax) for the fortnights you start to claim for, and continue to claim for.
- You have successfully enrol for JobKeeper payments personally or with us.
- The Major Bank Levy was imposed on the entity or a member of its consolidated group for any quarter before 1 March 2020.
- The entity is an Australian government agency (within the meaning of ITAA 1997).
- The entity is a local governing body.
- The entity is wholly owned by an Australian government agency or local governing body.
- The entity is a sovereign entity.
- The entity is a company and a liquidator or provisional liquidator has been appointed.
- The entity is an individual and a trustee in bankruptcy has been appointed.
Identifying your eligible employees
You are eligible for the JobKeeper payment in respect of employees, if the employees:
- Are currently employed by the eligible employer (including those stood down or re-hired).
- Are either:
– Permanent full-time or part-time employees of yours (or another entity in your wholly owned group) who were employees as at 1 March 2020; or
– Casually employed by you (or another entity in your wholly owned group) on a regular and systematic basis for at least 12 months as at 1 March 2020 and not a permanent employee of any other employer.
- Were at least 16 years of age as at 1 March 2020.
- Were an Australian resident as at 1 March 2020 within the meaning of the Social Security Act 1991, which requires that they reside in Australia, and are either an Australian citizen, the holder of a permanent visa or a Protected Special Category Visa Holder.
- Were not in receipt of any of these payments during the JobKeeper fortnight:
– Government parental leave or Dad and partner pay; or
– A payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.
- Have not agreed with any other employer to be nominated as an eligible employee for the JobKeeper payment.
- Complete the ‘JobKeeper employee nomination notice’.
Ensure you correctly pay your eligible employees
The design of the JobKeeper scheme is that all eligible employees are paid the minimum of $1,500 per fortnight and that the employer claims for each of these employees. Employers are not meant to pick and choose between their eligible employees.
You should pay your eligible employees in line with their existing pay amounts and pay cycle and meet these requirements:
- You should pay the minimum $1,500 (before tax) to each eligible employee each fortnight (starting with the fortnight 30 March – 12 April) to claim the JobKeeper payment for that fortnight.
- You need to continue to pay employees you are claiming for either:
– Every subsequent fortnight until 27 September 2020; or
– Until your employees stop being eligible or you opt out.
- For the first two fortnights (30 March – 12 April and 13 April – 26 April), the ATO will accept the minimum $1,500 payment (before tax) has been paid for each fortnight even if it has been paid late, provided it is paid by 8 May. This means that you can make two fortnightly payments of at least $1,500 per fortnight by 8 May, or a combined payment of at least $3,000 by 8 May.
As a word of warning, you must be aware that, despite the fact you can now pay your employees as late as 8 May 2020 and still be eligible for JobKeeper Payments for the first two fortnights, you are still required to pay your employees a further $1,500 by 10 May 2020 in relation to the third JobKeeper fortnight (which ends on the same date).
- If your eligible employees earn less than $1,500 (before tax) per fortnight, you must pay them $1,500 for each fortnight to claim the JobKeeper payment. This ‘top up’ of their salary or wages will ensure they remain eligible.
- Employers cannot pay their employees less than $1,500 (before tax) per fortnight and keep the difference.
- You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 (before tax) per fortnight.
- If your eligible employees earn more than $1,500 per fortnight, you will only receive $1,500 for each eligible employee and you should pay any additional balance themselves.
- If an employee has been stood down after 1 March, and you reengages them, you must pay your eligible employee at least $1,500 (before tax) per fortnight. You will only be eligible to claim for the fortnights after you have re-engaged your employee within the pay period.
- If an employee was employed on 1 March 2020, subsequently ceased employment with you as their employer, and has since been re-engaged by you, the employee must receive, at a minimum, $1,500 (before tax) per fortnight.
- You cannot claim the reimbursement for the JobKeeper payment for employees who were not paid the full amount during each JobKeeper payment period.
- If your ordinary arrangement is to pay its employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if an employer’s ordinary arrangement is to pay an employee every four weeks, it will be reasonable if the employee is paid at least $3,000 for every fourweek period.
- The JobKeeper payment is a reimbursement from the ATO to you and cannot be paid in advance.
The JobKeeper payment is not subject to GST.
New rules are being introduced by the government with the intention to not require super guarantee to be paid on additional payments that are made to employees as a result of JobKeeper payments. The ATO will update this information once legislation is in place.
Helping you to prepare
We will check with you and your employees in meeting the eligibility requirements. We are to ensure you continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight was the period from 30 March to 12 April).
You will be required to notify all your eligible employees that you are intending to claim the JobKeeper payment on their behalf and we will require a check on the employees that aren’t claiming the JobKeeper payment through another employer or have nominated through another business.
We will be sending the ‘JobKeeper employee nomination notice’ or other nomination notices to you to send to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payments for April. The employer should keep it on file and please do provide a copy to us.
The JobKeeper employee nomination notice will provide us confirmation from you that the employees you plan to nominate are eligible, and that the employer has notified them and has their agreement to participate.
Step 1: Enrol on your behalf
We will enrol for JobKeeper on your behalf through Online services for agents.
We will be filling in the JobKeeper enrolment form and with your information:
- Eligibility information
- Expected number of eligible employees
- Contact and bank details.
We will submit the enrolment on your behalf through Online services for agents.
To ensure you receive JobKeeper payments as early as possible, you should enrol by the end of April. However, enrolments are open until the end of May if you need more time.
Step 2: Identify and maintain eligible employees on your behalf
We can identify each of your eligible employees that you will claim the JobKeeper Payment for and maintain their details each month.
We can identify your employees in one of the following ways:
- Directly into their payroll software which will update the ATO through an STP enabled solution.
- Log in to Online services for agents and select employee details that are prefilled from your STP pay reports if we report payroll information through an STP enabled payroll solution (available from 4 May 2020 onwards).
- Log in to Online services for agents and manually enter your employee details online if you do not use an STP enabled solution (available from 4 May 2020 onwards).
- We can create a report for you using the JobKeeper Payment Guide sample payload files – available from the ATO’s website – that we can populate with your employee details and provide back to the ATO through the ATO’s secure bulk data exchange.
Step 3: Make a business monthly declaration
Each month, we are to reconfirm your reported eligible employees through Online services for agents.
If your eligible employees change or leave their employment, we will need a notification through the business monthly declaration report. You must also provide information as to your current and projected GST turnover. This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme.