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JobKeeper Payment – Updated for Sole Traders, Trusts, Partnerships and Other Entities

♥ Last updated 17 April 2020 ♥

 


NB: This information has been sourced from Government websites and our industry association (ICB). This is not financial or accounting advice. This is an unprecedented, fast-changing situation and there are always further updates and uncertainty around some of the details. Please talk to your advisor, bookkeeper or accountant for clarity on your own situation.


 

Don’t forget to visit our page with all the Economic Measures for Business

 

The ATO has released further detail on the JobKeeper Payment scheme (16 and 17 Apr 2020) with reference to Sole Traders, Trusts, Partnerships and Shareholders or Directors of companies and has added a little information to the eligibility and enrolment process.

The JobKeeper Payment scheme is to support businesses significantly affected by the coronavirus to help keep more employees in jobs and more business able to recover.
 
 
The JobKeeper payment is open to eligible employers and one business participant” (i.e sole traders, trusts, partnerships and directors or shareholders of companies) to enable them to pay their eligible employee’s salary or wages, and/or payment to one “business participant”, of at least $1,500 (before tax) per fortnight.
 
 
Eligible businesses will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee and/or one “business participant”.

If businesses do not continue to pay their employees and/or one “business participant” for each pay period, they will cease to qualify for the JobKeeper payment.

In regards to employees, it is “one in, all in”. Meaning you can’t pick and choose which employees get JobKeeper. If you pay one eligible employee JobKeeper, you must pay all eligible employees JobKeeper.

 

When the ATO releases the applications/enrolments, which should be 20th April 2020, we will post an update.

 
 

First steps:

 

  • 1. Check if you and you employees and/or “business participants” are eligible and if you are considering applying, you need to register your interest and subscribe for JobKeeper payment updates on the ATO website here. This is not the application, just allowing you to be notified of next steps.
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  • 2. If eligible and going to apply, start or continue to pay eligible employees and/or one “business participant” at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April). Also, see below on How to Pay.
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  • 3. Notify eligible employees and/or one “business participant” that you are intending to claim JobKeeper on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
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  • 4. Send the eligible employees and/or one “business participant” the JobKeeper employee nomination notice 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 don’t send to the ATO.
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  • 5. From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID or you can ask your Tax Agent/BAS Agent to do this for you. You must do this by the end of April to claim JobKeeper payments for April. 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. You will also need to specify the estimated number of employees and/or one “business participant” who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).
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  • 6. Ensure you have paid each eligible employee and/or one “business participant” a minimum of $1,500 per JobKeeper fortnight before tax. See below on How to Pay.
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  • 7. From 04 May 2020, you will need to confirm further information to the ATO to receive the payments and continue to do this monthly. You will also need to notify the ATO if your eligible employees change.

 
 

Eligibility and Criteria:

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A. Decline in turnover.

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)
  • 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
  • 15% fall in turnover (for ACNC-registered charities other than universities and schools).
  • Note: GST Grouping has not been detailed yet.

You can determine the decline in turnover by comparing one of:

  • GST turnover for March 2020 with March 2019
  • Projected GST turnover for April 2020 with April 2019
  • Projected GST turnover for quarter starting April 2020 with same quarter in 2019

 
Note: GST Turnover refers to the amount of turnover that would be put on an Activity Statement or GST Return if you were GST Registered. It does not mean that you have to be GST Registered.
 
There are alternative tests for decline in GST turnover, however these have not been released by the ATO yet.

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B. Eligible employers.

Eligible employers are:

  • On 1 March 2020, carried on a business in Australia or were a not-for-profit organisation principally in Australia
  • Employed at least one eligible employee on 1 March 2020
  • Have eligible employees who are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired)
  • Meet the decline in turnover requirements (above)

 
After you enrol, there will be other notification conditions which you will need to meet. More information will be available soon on these from the ATO.

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C. Eligible employees.

You cannot claim for employees who:

  • Were first employed by you after 1 March 2020
  • Left your employment before 1 March 2020
  • Have been, or have agreed to be, nominated by another employer

 
In regards to employees, it is “one in, all in”. Meaning you can’t pick and choose which employees get JobKeeper. If you pay one eligible employee JobKeeper, you must pay all eligible employees JobKeeper.

 

Employees:

  • can only receive JobKeeper payments or support through one employer.
  • must agree to be nominated by you. The form is here.

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D. Eligible “Business Participants” – sole traders, trusts, partnerships and directors or shareholders of companies.

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 when they have a non-employee individual who is actively engaged in the operation of the business:

  • Not-for-profit organisations are not included
  • At 01 March 2020, are a sole trader, a partner in a partnership, an adult beneficiary of a trust or are a shareholder or director of a company, are at least 16yo and and Australian resident and not employed by the entity.
  • Meet the decline in turnover requirements (above)
  • If on 12 March 2020 had an ABN and by this date had lodged either a 2018/2019 income tax return showing assessable business income or and Activity Statement/GST Return for the periods starting after 01 July 2018 and ending before 12 March 2020 which shows a taxable, GST Free or Input Taxed Sale. (The ATO may vary this in limited circumstances. They will give more information on this soon).
  • Meet the decline in turnover requirements (above)
  • Are not currently receiving government parental leave pay, dad and partner pay, receiving workers compensation payment for total incapacity to work.
  • Have given you a JobKeeper nomination notice, and not given another entity a JobKeeper nomination notice.

 
Other points to note:

  • If a “business participant” is eligible with two or more entities, JobKeeper can be claimed only once per individual.
  • Only one “business participant” per eligible entity (eg only one partner in a partnership)
  • If the “business participant” is an employee of another entity, other than a casual, they can only claim JobKeeper from their employing entity. If the sole trader is both a long term casual employee of another business and also an eligible sole trader, they can choose to either let their employer claim the JobKeeper payments on their behalf, or they can claim as a sole trader, but not both. This also applies whether their employer qualifies for JobKeeper or not.
  • There are examples on the ATO website.

 
The entity, not the eligible business participant, receives the JobKeeper payment. The exception is a sole trader, who is both the business entity and an eligible business participant, and so receives the JobKeeper payment themselves.
 
After you enrol, there will be other notification conditions which you will need to meet. More information will be available soon on these from the ATO.

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How does it work?

If you meet the eligibility criteria and want to start claiming the JobKeeper payment on behalf of your employees and/or one “business participant”, you need to start paying them at least $1,500 per fortnight (before tax) and continue to pay them for as long as you keep claiming.

An employer and/or one “business participant” will usually get $3,000 a month per eligible employee and/or one “business participant” for the two fortnightly periods in that month. (September has three fortnights, so $4,500 per eligible employee for that month).

You need to pay first. JobKeeper is a reimbursement.

  • You cannot claim the JobKeeper payment on behalf of employees and/or one “business participant” 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 the ATO to an employer in arrears, and will not be paid in advance in any circumstances.
  • For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by you by the end of April. This means that you can make two fortnightly payments of at least $1,500 per eligible employee per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April.

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How much do you pay?

There are some nuances, but the general gist is:

  • You must pay the minimum $1,500 before tax to each eligible employee and/or one “business participant” per fortnight to claim the JobKeeper payment for that fortnight.
  • If your eligible employees and/or one “business participant” earn less than $1,500 per fortnight before tax, you must pay them at least $1,500 for each fortnight to claim the JobKeeper payment. This is a ‘top up’ of their salary or wages and will ensure they remain eligible.
  • You cannot pay your employees and/or one “business participant” less than $1,500 per fortnight and keep the difference. You will not be eligible for the JobKeeper payment if you pay your nominated employee and/or one “business participant” less than $1,500 before tax per fortnight.
  • If your eligible employees and/or one “business participant” earn more than $1,500 per fortnight, you should continue to pay them their regular salary or wages. However, you will only receive $1,500 for each eligible employee and/or one “business participant”. Any amount you pay above $1,500 per fortnight is not subsidised by the JobKeeper payment.
  • There are examples on the ATO website for employees scenarios.
  • If you usually pay your employees and/or one “business participant” monthly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a four-week pay cycle, your employees must have received at least $3,000 for every four-week period.
  • JobKeeper is normal assessable income and you need to withhold PAYG the same way you do ordinary wages
  • You still need to pay SGC (super) on the ordinary wages. Any “top up” of JobKeeper does not attract super. 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 and/or one “business participant” as a result of JobKeeper payments.


Employees who were stood down or on long term leave

  • Employees who have been stood down from work under the Fair Work Act without pay may still be eligible employees as long as they were in your employment and met the eligibility criteria on 1 March 2020.
  • You will need to have paid them at least the minimum amount of $1,500 for each fortnight you claim for, to receive the JobKeeper payment.

 

Employees who have been terminated

If you terminated an employee after 1 March 2020, you can re-engage them and they will be eligible if they met the eligibility criteria on 1 March 2020.

If you want to claim the JobKeeper payment for employees you have re-engaged, you will need to:

  • confirm they want to be re-hired and participate in the JobKeeper scheme with you
  • re-engage the employees you want to claim for.
  • ask them to complete the JobKeeper employee nomination notice and return it to you. You are required to keep this form as part of your records keeping obligations under the law.
  • start paying them a minimum of $1,500 (before tax) for each fortnight they are employed and you claim for.

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.

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Need more information?

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ATO JobKeeper Information for Employers

ATO JobKeeper Information for Sole Traders and Other Entities

ATO JobKeeper Information for Employees

ICB (Institute of Certified Bookkeepers) Information about JobKeeper 

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Don’t forget to visit our page with all the Economic Measures for Business

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If you feel lost and don’t know where to start or need help getting your accounts quickly up to date to take advantage of any financial or stimulus packages, please feel free to contact us or book in for a free 15 minute call with Elizabeth and we can talk to you about the best way forward.

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