JobKeeper Frequently Asked Questions
Simona Hughes ran an online Q&A session on JobKeeper (video below):
Can a sole trader who has employees also qualify for the JobKeeper Payment?
YES
On the basis that the sole trader’s business has satisfied all the requirements to qualify for the JobKeeper Payment, a sole trader can qualify for the JobKeeper Payment in relation to their eligible employees and also qualify for the JobKeeper Payment themselves (i.e., in their own capacity) as an eligible business participant.
Whether a sole trader has any employees or not will not impact on their
ability to personally qualify for the JobKeeper Payment.
Do businesses have to meet the decline in turnover test on an ongoing basis?
NO
Whilst a business must satisfy the decline in turnover test in order to be entitled
to a JobKeeper Payment, once it is satisfied, there is no requirement to retest.
That is, the decline in turnover test only needs to be satisfied once. As a result, if a business can demonstrate that its turnover has been adversely impacted by at least 30% (or 50%, as the case may be), then it will continue to meet this requirement even if its turnover subsequently recovers in later JobKeeper fortnights.
What if a business’s turnover has not decreased (e.g., by 30%) but it is predicted to do so in the coming month?
An employer can apply for the JobKeeper Scheme where it is reasonably expected that its GST turnover will fall by 30% or more (or 50% where applicable) relative to its GST turnover in a corresponding period a year earlier. Treasury has advised that the ATO will provide guidance about self-assessment of actual and anticipated falls in turnover.
Additionally, if a business does not meet the decline in turnover test as at 30 March 2020, the business can start receiving the JobKeeper Payment at a later time, once the decline in turnover test has been met. However, in this case, the JobKeeper Payment will not be backdated to the commencement of the scheme, although businesses can receive JobKeeper Payments up to 27 September 2020.
Are employers required to continue to pay employees to qualify for the JobKeeper Payment?
YES
Employers are required to satisfy the ‘wage condition’ in respect of an employee for the relevant JobKeeper fortnight in order to qualify for the JobKeeper Payment for
that employee.
As a reminder, the first JobKeeper fortnight commenced on Monday 30 March 2020 and ended on Sunday 12 April 2020 (i.e., the first JobKeeper fortnight has already ended). Broadly speaking, a payment under the scheme is meant to be a reimbursement to the employer of an amount already paid to an eligible employee (who is participating in the JobKeeper Scheme).
Specifically, the ‘wage condition’ requires the employer to pay each eligible participating employee at least $1,500 for each JobKeeper fortnight, which can be represented by salary, wages, PAYG withholding, salary-sacrificed superannuation contributions and other amounts applied or dealt with on behalf of the employee (i.e., an add-back of any salary sacrificed in return for fringe benefits).
If employers have insufficient cashflow to make such payments, Treasury has encouraged such businesses to speak to their banks about using the upcoming JobKeeper Payment as ‘collateral’ to seek short-term finance to pay their employees.
Are the JobKeeper Payments from the ATO assessable income to the business?
YES
In the absence of any specific exemptions, the JobKeeper Payments received
from the ATO by the business would be assessable income under either S.6-5 of the ITAA 1997 (as ordinary income) or S.15-10 of the ITAA 1997 (as a subsidy received by a business). However, salary or wage payments made by the business to their employees are allowable deductions.
Are employers required to deduct PAYG withholding from the amounts paid to employees?
YES
Broadly speaking, employers are required to make payments of at least
$1,500 to each eligible employee every JobKeeper fortnight.
To the extent that these payments take the form of salary or wages, they would constitute assessable income to the employees, which means that employers would be required to deduct the appropriate amount of PAYG withholding. Therefore, on the basis that each eligible employee will receive at least $1,500 per fortnight, then at least $192 of PAYG withholding will need to be deducted (based on a fortnightly payment cycle) where the employee is claiming the tax-free threshold (assuming no salary packaging arrangement is in place).
Are employers subject to Superannuation Guarantee (‘SG’) in relation to JobKeeper Payments?
DEPENDS
The Government’s intention is that employers will only be required to make
SG contributions for amounts payable to an employee in respect of their actual employment, which would not include any extra payments made by the employer to satisfy the $1,500 JobKeeper Payment ‘wage condition’.
For example, if an employee ordinarily earns $1,000 a fortnight and is ‘topped-up’ by $500 to $1,500 a fortnight, the employer will be required to pay SG in relation to the ‘usual’ $1,000 but may lawfully decide not to pay SG on the additional $500 payment, which is solely attributable to the JobKeeper Payment. In other words, in relation to the extra top-up amounts paid to the employee, it is up to the employer if they want to pay superannuation on these additional wages paid by the JobKeeper
Payment.
When working out the fall in turnover, is the income based on cash received or invoices issued (i.e. cash or accrual basis)?
If you lodge your activity statements on a cash basis, you can choose to calculate the turnover on a cash basis.
If you lodge your activity statements on an accrual basis, you must calculate the turnover on an accrual basis.
