As Covid cases decline and restrictions ease in Victoria and, its time to start thinking about the silly season, preparing your business to make the most of sales and ensuring you have sufficient staff on board is vital.
I wanted to touch base to update you about some of the business support provided by the Government with Jobkeeper 1.0 and 2.0 being updated.
As we are finding our way around this 'new norm' it's important to keep up to date with government stimulus packages, so that you are aware of your eligibility and any changes you need to make.
The government stimulus packages are not a one size fits all solution, if you haven't yet applied for them but want to do so, please get in touch so that I can assist you.
>>Updated 1st October<<
Jobkeeper 2.0
Here are the main points you need to be aware of and remember that you need to communicate these changes with your employees so they understand why the payment has changed for them.
The first JobKeeper scheme closed on September 27, 2020. In order to receive the subsidy, all payments for fortnight 13 need to have been paid by this date and the monthly declaration made by October 14.
JobKeeper 2.0 has been extended from 28 September 2020 until 28 March 2021. There are two separate extension periods within this time frame. For each extension period, an additional actual decline in turnover test applies and the rate of the JobKeeper payment is different.
The extension periods are:
Extension 1: from 28 September 2020 to 3 January 2021
Extension 2: from 4 January 2021 to 28 March 2021
JobKeeper 2.0 payments for employees will depend on the total hours worked during a specific period, with employers assigning each nominated worker to one of two tiers.
Tier one rate:
This applies to eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020 or eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.
Tier two rate:
This basically applies to everyone who falls outside of tier one.
As an employer claiming JobKeeper 2.0, it must be lodged for all eligible employees and you cannot decide who gets what.
Monthly Declarations – What to do:
Employers will need to prepare monthly declarations to the ATO. For October and January, this will include restating that they meet the new actual decline in turnover test.
Do note that the ATO will be relying on the figures reported in the September 2019 BAS (If applicable), so this needs to be lodged before employers can claim the October JobKeeper 2.0 payment. It’s ok if the September 2020 BAS isn’t yet lodged. This will be the same for retesting for the October to December 2020 period, the December 2019 BAS will need to be lodged.
As the number of new daily cases of COVID-19 steadily declines in Victoria, and the road to restarting comes into view, the Victorian Chamber of Commerce & Industry have put this article together to help businesses prepare for the new ‘COVID normal’ before getting back to work; Everything you need to know before reopening your business in Victoria
>>Updated 18th August<<
The JobKeeper Payment, which was originally due to run until 27 September 2020, will continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.
Changes to Jobkeeper payments mean that businesses that see a greater than 30% drop in turnover for the September 2020 quarter, may be eligible for an extension of Jobkeeper payments for their employees along with eligible business participants.
The rates at which the JobKeeper payments are paid is also changing and is now based on how much the employee is engaged in the business. You can access the fact sheet here:
JobKeeper fortnights commencing on 3 August 2020 and 17 August 2020, employers have until 31 August 2020 to meet the wage condition for all new eligible employees under the 1 July eligibility test. See Key Dates Here
On Friday 14 August it was announced that employees that were employed before 1 July 2020 may now be eligible for Job keeper for August and September more information can be found here: Your Eligible Employees
With the ATO (Australian Taxation office) opening up JobKeeper applications and encouraging eligible businesses to sign up, we are hoping to see some relief to the stress you and your small businesses are under.
The government estimates that 6 million workers will receive this payment. But with so much information rapidly changing, many business owners, especially sole traders are confused and struggling with how to apply for Jobkeeper. To help with this I will aim to keep this blog up to date so you have a handy place to come and check information. I have also added a heap of helpful resources and fact sheets at the bottom of the blog.
If there is any way I can help you please don't hesitate to get in touch.
>>Updated 4th May<<
We’ve updated the blog with new JobKeeper guides that include the latest information and the alternative test, find more helpful links at the bottom of the blog.
The ATO are experiencing high numbers of call, to reduce call times they have created a page with the answers to the most commonly asked questions about JobKeeper, early release of super and cash flow boost.
>>Updated April 30th<<
As you may know there is a rush to apply for JobKeeper. Businesses hoping to access JobKeeper wage subsidies for April will now have an additional month to enrol, after the Australian Taxation Office extended its application deadline to 31 May.
Previously, businesses looking to claim $1,500 JobKeeper payments for the fortnights between 30 March to 12 April, and 13 April to 26 April, were required to determine their eligibility and enrol by 30th April.
Employers have until 8 May to make top up payments for April, but can join the scheme at any time before 31 May. Jobkeeper is legislated to continue for up to six months.
Full time students aged 16 and 17 years old: A change to existing rules for full time students aged 16 and 17 years old who satisfy the basic eligibility criteria, will no longer be eligible for JobKeeper Payment unless they are financially independent. This change will apply prospectively, so employers who have made the minimum $1,500 to those students who will now be ineligible for the payment, are not financially disadvantaged. This change will have a significant impact on the hospitality and retail industries but will no doubt be welcomed by small businesses struggling to find cash resources to fund upfront payment of wages to eligible employees. Important Info before we get stuck in!
You must check that your business or not-for-profit organisation meets the eligibility requirements, including the turnover test. The turnover calculation is based on GST turnover. This applies even if an entity is not registered for GST.
You will need to compare the month of March 2019 with March 2020, April 2019 with April 2020 or you can compare quarterly by forecasting April, May and June 2020 with the same period in 2019, if you identify or forecast a 30% or greater drop in income then you may be eligible for JobKeepr payments.
Each month, you must report your Income and eligible employees in the business monthly declaration report. This can be done through the Business Portal or via your registered tax or BAS agent.
Do I need to re-test each month?
I wanted to answer this question here as I understand there is confusion around this.
You only have to complete the test once!
Then you will need to 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. OK, grab a cuppa and lets jump in...
JOBKEEPER PAYMENT OVERVIEW JobKeeper is a Federal Government subsidy paid to eligible businesses effected by COVID-19 to cover the costs of their employee’s wages.
Affected employers will be able to claim a fortnightly subsidy payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. This full amount of $1,500 must then be paid to all eligible employees, whether they are full time, part time or casuals.
Here is a brief summary of how the JobKeeper payments are made: • They are paid by the ATO within 14 days of month end. • The first payment will be on mid May 2020. • The eligible payroll periods are every 14 days, commencing 30 March 2020. • Employer payroll reporting is required to trigger the payment by the ATO – using Single Touch Payroll (STP)
The employer will continue to receive the subsidy payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the business.
Eligible employees:
Were employed by an eligible employer at 1 March 2020
Can be sole traders, full-time, part-time, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020.
Are at least 16 years of age, but those aged 16 or 17 must be financially independent to qualify
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.
Business Participation Entitlement
Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. A limit applies of one $1,500 JobKeeper payment per fortnight for one eligible business participant. Sole traders, one partner in a partnership, one beneficiary of a trust, and one director or shareholder of a company may be regarded as an eligible business participant.
It's important that you let us know as soon as possible if you would like some assistance in making the jobkeeper claim and determine your drop in turnover or eligible employees.
STATE GOVERNMENT SUPPORT The ATO requires you to keep all records in relation to your JobKeeper claim for a 5 year period.
The ATO has specific actions that must take place within tight timeframes for an employer to receive the JobKeeper payment.
We have limited time to enrol you for JobKeeper (starting on 20 April 2020) and then making your first Application for JobKeeper Payments (starting on 4 May 2020).
OBLIGATIONS + RISKS FOR YOU If a wrong claim is made or if the ATO in the future decides that you were ineligible to receive the JobKeeper payment, the ATO will require you to repay them any JobKeeper payments that you have received plus penalties and interest. The key risks to you as the employer include: 1. The employer certifies the facts provided to the ATO and the JobKeeper claim made. 2. The employer receives significant JobKeeper payments over a 6 month period. For example, an employer with 10 employees would receive $195,000, and an employer with 20 employees would receive $390,000. 3. If the employer makes a mistake and is found to be ineligible by the ATO (for example, its turnover is not down by 30%), then they may have to repay all amounts received back to the ATO. 4. An employee ceases to be eligible if they cease employment during the life of this JobKeeper scheme. 5. Keep all records in relation to your JobKeeper claim for a 5 year period.
Make Correct Wage Payments to Eligible Employees – NOW
Ensure your payroll software is correctly set up to record JobKeeper “top up” payments
Pay the minimum $1,500 before tax to each eligible employee each fortnight (starting with the fortnight 30 March to 12 April) to be able to claim the JobKeeper payment for that fortnight
Continue to pay the minimum $1,500 to employees in every subsequent fortnight until 27 September 2020
If an employee is entitled to wages for the fortnightly periods above, you must ensure they are paid those wages in line with their contractual agreement and any applicable award or enterprise agreement. However, if they require a ‘top up’ to get to the minimum JobKeeper amount of $1,500, you can choose to pay this by the end of April.
Do we have to pay the full $1,500 per fortnight to all our employees? If you receive the JobKeeper payment for an employee, you must ensure that employee receives a minimum of $1,500 per fortnight, before tax. If you believe you cannot afford to make the payments, it would not be advisable to seek the JobKeeper payment. We recommend you seek advice from your accountant or contact me as to what your options may be in order to continue claiming the JobKeeper payment if it happens after the payments commence.
What about superannuation? Employers must continue to pay the superannuation guarantee on regular wages but it is up to employer whether they pay superannuation on additional jobkeeper payments.
Some helpful resources (We will keep these up to date)
I'm here to help...
I believe everyone will be feeling the effects of the COVID19 situation in some ways and I send my support. If you would like to chat do get in touch as I am here to help you.
JobKeeper tasks I can help with are:
assessing entity eligibility including performing turnover calculations
assessing employee eligibility and identifying eligible employees
enrolment with the ATO
ongoing payroll and ATO reporting requirements
reconfirming the eligibility of employees
reconciling JobKeeper payments received to initial claims.
You can also ask us about our business solution that has no big bills, just a manageable monthly fee that includes quarterly BAS and business analysis, tax planning and your end of year financials AND you can claim these expenses back at tax time✔️
Here are some other blogs you may find helpful.
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