Jobkeeper – What You Need to Know
On the 30th of March 2020, the Australian Federal Government brought forward the JobKeeper program. This has been one of the government’s many efforts to help keep businesses that have been affected by Covid-19 afloat.
Essentially a wage subsidy, under this scheme employers can continue to pay their employees irrespective of whether they are working or not. For eligible applying businesses, the government has decided to provide $1500 every fortnight, for each employee, up to a period of six months.
The JobKeeper scheme is part of the government’s $320 billion financial support package that’s aimed towards subsidising businesses negatively impacted by the pandemic. Eligible businesses can claim reimbursement through the Australian Tax Office.
Employer eligibility criteria
In the case of employers, the eligibility criteria for the scheme are as follows:
- The business must have a turnover of less than $1 billion. Also, the estimated turnover must reduce by an amount greater than or equal to 30% as compared to the last year.
- Or, if the business has a turnover of greater than or equal to $1 billion, and the estimated turnover is expected to reduce by 50% or more as compared to the previous year.
- Or, if the business is not subject to the Major Bank Levy
Also, registered charities that estimate turnover declines of 15% or more as compared to a similar period last year are also eligible to apply. In addition, the Australian Tax Office reserves the discretion to set alternative criteria for eligibility. These will be applicable for businesses that were not in operation a year ago.
Employer tax implications
When an employer receives JobKeeper payments, these will be added to the employer’s assessable income. Such addition will be in the form of wage subsidies falling under section 15-10 of the ITAA, 1997. All normal rules of deductibility are applicable, and the payment is not subject to GST.
Employee eligibility criteria
For employees to be eligible, they must be working under an eligible employer and be currently employed. Also, they must be aged 16 years or older as on March 1, 2020. In addition, they must be Australian citizens or holding a permanent or special category visa.
Important considerations
It’s important to keep in mind that employees working under multiple employers are eligible to receive the JobKeeper benefits from one eligible employer only. Also, all payment amounts are calculated before tax.
The content is not considered personal advice and it is general in nature. The individual will need to seek their own advice that is suitable for their personal circumstances. If you’re interested in knowing more, please contact us to know further details about the JobKeeper scheme.
