JobKeeper - ATO Guidance Released

The ATO has released additional information on the JobKeeper system, full details of the ATO release can be found here: https://www.ato.gov.au/General/JobKeeper-Payment/

          Please also refer to our earlier releases on the scheme for further information. These can be found here: http://www.cjeffery.com.au/news

          Eligible entities will be able to enrol in the JobKeeper scheme from 20 April 2020 - an online form will be made available via the business portal. Businesses will need to have enrolled for JobKeeper by 26 April to be eligible to receive the reimbursement for the first 2 fortnightly periods in April. After enrolment you will need to identify specific eligible employees and submit these details to the ATO within 7 days.

          C&J will be able to assist with the enrolment and ongoing reporting for the JobKeeper payment if required. Please note that fees will apply for our assistance and advice.

          The ATO have provided the following clarification on the scheme:

1. Eligible Employers

Employers will be eligible for the JobKeeper payment if all of the following apply:

• On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
• 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 a
  • 30% fall in turnover (for an aggregated turnover of $1 billion or less)
  • 15% fall in turnover (for ACNC-registered charities other than universities and schools).
• Your business is not in one of the ineligible categories.

2. How to Determine a Fall in Turnover

The ATO have provided the following guidance on the turnover test. Each business will only need to satisfy the turnover requirement once – you don't need to retest turnover each month.

          At the time you enrol in the JobKeeper payment scheme, you need to confirm that your business in a relevant period has had, or is likely to have, a:

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

To work out your fall in turnover, you can compare either:

• GST turnover for March 2020 with GST turnover for March 2019
• projected GST turnover for April 2020 with GST turnover for April 2019
• projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.

How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, though you can do that if it is easier. The turnover calculation is based on GST turnover, but there are some modifications, including disregarding GST grouping (where two or more associated business entities operate as a single GST group). The will provide more information soon about applying the turnover test.

          If you work out that you qualify for the JobKeeper payments for the first fortnight because your turnover has declined by the relevant amount, you remain eligible and do not need to keep testing turnover in following months. However, you will have ongoing monthly reporting requirements. More information will be provided soon.

          The Commissioner of Taxation also has the discretion to set out alternative tests that can establish your eligibility when turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year). We will provide more information soon about alternative tests.

3. Nominating Employees

The ATO have confirmed that there will be a nomination form that is required to be completed for each employee who will receive the JobKeeper payment. The form can be found here: https://www.ato.gov.au/assets/0/104/300/387/d1aab7f2-fbe8-44b8-9ec1-4885ded1088e.pdf

           As an employer you will need to provide the nomination form to each eligible employee and have this signed and returned. This form confirms that the employee is eligible and not claiming the JobKeeper amount from another employer. If an employee is receiving an income support payment it is their responsibility to notify Services Australia that they will be in receipt of JobKeeper.

          Please provide this form to your employees ASAP and hold the signed forms. The form does not need to be provided to the ATO but must be held by the employer.

4. Employees Who Were Stood Down or Have Been Terminated

Employees who have been stood down or terminated can be eligible for the JobKeeper payment. Terminated employees need to be rehired and complete a nomination form prior to becoming eligible. Employers will need to pay the staff member $1,500 per fortnight to be eligible for the JobKeeper payment.

          You will only be paid a JobKeeper payment for employees from the fortnight they were re-engaged. You cannot claim retrospectively for employees you re-engage.

5. Enrolling for the JobKeeper Payment (from 20 April)

The ATO have provided the following steps required to enrol for the JobKeeper scheme:

• Step 1 – Register your interest and subscribe for JobKeeper payment updates.
• Step 2 – Check you and your employees meet the eligibility requirements.
• Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).
• Step 4 – Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
• Step 5 – Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one.
• Step 6 – From 20 April 2020, you can enrol with us for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
• Step 7 – In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
• Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

Enrolment will be available via the Business Portal, we will also be able to lodge the enrolment form on your behalf via the Tax Agent Portal.

6. Confirming Eligible Employees in Order to Receive the JobKeeper Payment (from 4 May 2020)

The ATO have provided the following steps required to claim the JobKeeper payment for eligible employees.

• Step 1 – Apply to claim the JobKeeper payment by logging in to the ATO Business Portal (see point 5 above)
• Step 2 – Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.
• Step 3 – Identify your eligible employees in the application form by
  1. selecting employee details that are prefilled from your STP pay reports if you report payroll information through an STP enabled payroll solution, or
  2. manually entering employee details in ATO online services or the Business Portal if you do not use an STP enabled payroll solution, or
  3. using a registered tax agent who will submit a report on your behalf through Online services for agents.
• Step 4 – Submit the confirmation of your eligible employees online and wait for your confirmation email or SMS showing it has been received.
• Step 5 – Notify your eligible employees you have nominated them.
• Step 6 – We will pay you the JobKeeper payment for all eligible employees after receiving your application.
• Step 7 – Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via your registered tax agent. This will ensure you will continue to receive the JobKeeper payments from us. You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.
• Step 8 – If your eligible employees change or leave your employment, you will need to notify us through your monthly JobKeeper Declaration report.

7. Paying Your Eligible Employees

The ATO have confirmed the businesses are required to pay eligible employees at least $1,500 before tax each fortnight in order to receive the JobKeeper payment. The first fortnightly period was from 30 March to 12 April. The second fortnightly period is from 13 – 26 April. The ATO have conceded that the April payments will be eligible even if the payments are made late BUT the payments must be made to your employees by the end of April. You must pay your eligible employees fortnightly in order to receive the JobKeeper payment for future fortnights.

Monthly Payroll Cycles

If you have a monthly payroll cycle then the required payments per employee are as follows,

8. Tax Consequences

The JobKeeper payment will be assessable income for the employer. The payment is not subject to GST.

9. What you Cannot Do

You cannot claim the JobKeeper payment on behalf of employees who were not paid at least $1,500 before tax during each JobKeeper payment period.

          You cannot claim the JobKeeper payment in advance. The JobKeeper payment is a reimbursement from us to an employer in arrears, and cannot be paid in advance in any circumstances.

10. Sole Traders and Business Owners

The ATO have confirmed that Sole Traders and Business Owners directly engaged in their business can be eligible. Limited information is currently available on the eligibility of these businesses, the ATO has flagged that more information will be available soon.