As no doubt every business owner in Australia is aware, the JobKeeper payment of $1,500 per fortnight was legislated just over a week ago (on 8 April 2020).

However, the details of how this will be applied on a practical basis for eligible businesses and employees is still being be released, updated, and implemented by the Australian Taxation Office (ATO) and the Australian Government Treasury on an ongoing, almost daily basis. This will continue through April and early May 2020.

To help businesses understand how, what, and when they need to attend to the various stages of the JobKeeper payment, we have set out this practical guide.

How and when is your business eligible for the JobKeeper payment

In summary, the basic requirement is that your business turnover has dropped by more than 30% in comparison to the corresponding month or quarter in 2019. In most cases, businesses are going to compare this on a monthly basis, and for this reason the details below have been explained on a monthly basis.

Once your business meets this turnover requirement, there is no re-assessment of your eligibility, and you will be eligible for and receive the JobKeeper payments for eligible employees through to the end of September 2020.

As the eligibility is based on projected turnover (other than if based on March 2020 turnover), all businesses should keep detailed records of their 2020 monthly projected and actual turnovers, and their 2019 actual turnovers, to ensure they can answer any questions from the ATO regarding their claim.

Has your business already experienced a 30% decline in turnover? 

• If your business turnover for March 2020 was less than 70% of your March 2019 turnover, then you should be eligible for the JobKeeper payment for the month of April 2020 and onwards through to September 2020.
• If your business turnover for April 2020 is projected to be less than 70% of your April 2019 turnover, then you should be eligible for the JobKeeper payment for the month of April 2020 and onwards through to September 2020.
• If either of the above applies to your business, then you need to register for the JobKeeper payment when this process opens on 20 April, and you only have until 26 April to meet the April claim period (see registration details below).

Do you expect your business to experience a 30% decline in turnover in May 2020?

• If you project that your business turnover is going to decline by more than 30%, then you should be eligible for the JobKeeper payment for the month of May 2020 and onwards through to September 2020.
• If this applies to your business, then you need to register for the JobKeeper payment by 10 May 2020 to meet the May claim period (see registration details below).

Do you expect your business to experience a 30% decline in turnover in June 2020, or a later month through to September 2020?

• As outlined above, the JobKeeper eligibility is based on projected monthly turnover (other than if based on March 2020 turnover), and as we move forward if you project an upcoming month is going to result in a decline in turnover by more than 30%, then you should be eligible for the JobKeeper payment for that month and onwards through to September 2020.
• For various reasons a range of businesses may not experience a downturn in turnover for a number of months, but as soon as these impacts start to affect your projected monthly turnover, you need to ensure you register for the JobKeeper payment within a day or two of the start of the month (see registration details below).

For which of your employees are you eligible to receive the JobKeeper payment?

Once you have determined that your business is eligible for the JobKeeper payment, the next step is to determine which of your employees are eligible for this payment.

This is not a simple process, and you need to list every single employee, and the details that make them eligible for the JobKeeper payment.

This continues on an ongoing basis, as the JobKeeper payment can then only be received for those eligible employees who remain employed by the business during the JobKeeper payment period.

Confirm which of your employees are eligible for the JobKeeper payment

• An eligible employee is an employee who:
  • was an employee of the business on 1 March 2020
  • was aged over 16 years of age (at 1 March 2020)
  • was a full-time, part-time, or long-term casual employee (a long-term casual employee is someone who has been employed on a regular and systematic basis since 1 March 2019)
  • was an Australian resident, or a resident for tax purposes.
• In addition to employees still working in the business, this would also include employees who:
  • have been stood down since 1 March 2020
  • were terminated after 1 March 2020 that are re-employed by the business
  • are on paid or unpaid leave (excluding paid parental leave).
• Each eligible employee needs to agree to, and confirm in writing (via an ATO form), that they will be paid by the business under the JobKeeper scheme.
• You need to continue to pay each eligible employee at least $1,500 (gross wages) each JobKeeper fortnight for them to remain an eligible employee (see further details below in relation to this very important requirement).

Which business owners are eligible to receive the JobKeeper payment?

Due to the nature of their business structures, sole traders and partnerships cannot pay wages to themselves. In addition to this, not all companies and trusts pay wages to their directors, shareholders, or beneficiaries.

The JobKeeper payment recognises these limitations and allows one business participant who is actively engaged in the business (operations and activities) to receive the JobKeeper payment.

Who is a business participant?

• Sole trader: the sole trader themselves
• Partnership: only one of the partners
• Trust: only one of the adult beneficiaries of the trust
• Company: only one of the directors or shareholders of the company 

It’s also important to point out that for companies and trusts the above doesn’t prevent any directors, shareholders, or beneficiaries that are already receiving wages as an employee of a company or trust, from receiving the JobKeeper payment like any other normal eligible employee.

When and how can I enrol my business for the JobKeeper payment

There are tight timeframes in relation to any initial enrolment, but in particular for those business who have identified that they are eligible to claim this for the month of April.

If you believe your business is eligible for the JobKeeper payment from April onwards, and if you are not enrolling yourself, you need to contact us no later than 24 April (to meet the 26 April lodgement deadline).

The timeframes to be aware of

• April eligibility: the enrolment form will be available on 20 April, and you only have until 26 April to lodge this form to be able to claim the JobKeeper payment for April
• May eligibility: the enrolment form must be lodged by 10 May
• June eligibility and onwards: each month’s date varies, but to be safe you should be enrolled within a couple of days of the start of the month.

What is the initial enrolment process?

• A “JobKeeper employee nomination notice” (https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/) needs to be completed and signed by each eligible employee.
• The business enrols for the JobKeeper payment using the Business Portal, or where you do not have access to the Business Portal, Lambourne Partners can enrol your business using our Tax Agent Portal.
• If you require Lambourne Partners’ assistance to complete this enrolment, we will provide you with a JobKeeper turnover test confirmation notice to be completed and signed prior to enrolment.
• Although the enrolment form is not available yet, based on the information currently available, you will need to include the following details:
  • estimated number of eligible employees you believe you will be claiming for in respect of April (or your first month)
  • business participation details for the individual you are claiming in this regard (for sole traders, partnerships, and companies/trusts with an actively engaged non-wage director/shareholder/beneficiary)
  • business bank account details.
• Once you have enrolled your business for the JobKeeper payment, you need to advise all your employees in writing that they are registered with your business in this regard (we will provide a copy of this notice to our clients – please contact us in this regard).

You need to pay each eligible employee $1,500 per fortnight to receive the JobKeeper payment

This is a crucial requirement that must be met for all employees, each and every fortnight that your business is claiming the JobKeeper payment. You need to ensure that each eligible employee is being paid at least $1,500 per JobKeeper fortnight, to ensure your business can claim the JobKeeper payment for them at the end of the month.

If you don’t pay, or if you can’t pay your eligible employees this amount due to cash flow issues, you can’t claim the JobKeeper payment for that employee at the end of the month, which means you receive no reimbursement from the ATO for whatever wages you did pay them.

If your business is going to have cash flow issues due to having to pay all employees in advance of receiving the JobKeeper payment from the ATO at the end of the month, please contact us so we can talk through any options that could assist in meeting these payments to your employees. It is very important that we help you find a way to meet these payments.

The JobKeeper payments are based on JobKeeper fortnights, starting on 30 March, and ending on 27 September. Based on these dates, the following minimum wages need to be paid to eligible employees between the dates specified below –

• April: 30 March to 26 April – $3,000
• May: 27 April to 10 May, 11 May to 24 May – $1,500 for each JobKeeper fortnight
• June: 25 May to 7 June, 8 June to 21 June – $1,500 for each JobKeeper fortnight
• July: 22 June to 5 July, 6 July to 19 July – $1,500 for each JobKeeper fortnight
• August: 20 July to 2 August, 3 August to 16 August, 17 August to 30 August – $1,500 for each JobKeeper fortnight
• September: 31 August to 13 September, 14 September to 27 September – $1,500 for each JobKeeper fortnight

You need to get your payroll system in order as soon as possible

If you are eligible to claim the JobKeeper payment for April, then you need to review your payroll system and ensure that all eligible employees will be paid at least $3,000 in gross wages by 26 April (as we are partway through April already, you need to catch up the two JobKeeper fortnights).

This requirement then continues on each and every month, based on the details set out above regarding the JobKeeper fortnights.

For those employees who are usually paid more than $1,500/fortnight, there is no change to how you pay and record their wages each pay period.

However, for those employees who are usually paid less than $1,500/fortnight (usually casual and part-time employees), not only do you need to ensure they are paid $3,000 by 26 April (and then $1,500 each JobKeeper fortnight per the list above), but you also need to record this correctly in your payroll systems. 

There are complications for these employees regarding the top up payments to take their gross wages to $1,500/fortnight, which also involve the compulsory superannuation contributions of 9.5%. It is important you get these details correct from the start, and in this regard it’s important you involve your bookkeeper or Lambourne Partners to ensure all these details are in order.

How and when do I claim each monthly JobKeeper payment

At the end of each month, you will need to lodge a form with the ATO to claim and receive your JobKeeper payment for the previous month. Once you have lodged this form, the total JobKeeper payment for all your employees for the previous month will be paid to your business within 14 days of the start of the month.

What is the process

• The ATO lodgement form will not be available until 4 May 2020, and based on the information currently available, it appears this form will have to be lodged through the Business Portal, or where you don’t have access to the Business Portal, we can lodge this form for you each month through our Tax Agent Portal.
• The details that need to be provided in this form each month appear to include the following:
  • each eligible employee’s name, type of employment, and residency status (in the first month’s form only)
  • any changes to your above reported eligible employees (in each ongoing month’s form)
  • current turnover for your previous month
  • projected turnover for your next month.

A timeline of what needs to be attended to, and when

DOWNLOAD PDF TIMELINE

In addition to our above “how, what, and when” detailed guide to the JobKeeper payment, we have tried to simplify these details into a timeline of what you need to attend to, and when. This allows you to work through what is required over the coming weeks and months.

The details below are a summary to our detailed guide, so where required please refer to our detailed guide to the JobKeeper payment.

Today

• Identify whether your actual turnover for March 2020, or your projected turnover for April 2020, makes you eligible for the JobKeeper payment from April onwards. If you need any assistance in this regard, contact us.
• If you are eligible for April:
  • List and identify all your employees who are eligible for the JobKeeper payment
  • Organise for a “JobKeeper employee nomination notice” form to be completed and signed by every eligible employee (https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/) 
  • Review your payroll system and get this in order with the assistance of your bookkeeper or Lambourne Partners.
  • For those eligible employees who would be paid less than $3,000 between 30 March and 26 April, plan ahead to ensure that they are paid at least this amount by 26 April 2020.

20-26 April

• If you are eligible for the JobKeeper from April onwards, enrol for the JobKeeper payment through your Business Portal.
• If you require Lambourne Partners to enrol you through our Tax Agent Portal, please contact us by 24 April, and once we have received the following information from you, we will then enrol your business:
  • JobKeeper turnover test confirmation notice (we will provide a copy of this to you)
  • estimated number of eligible employees you believe you will be claiming for April
  • business participation details for the individual you are claiming in this regard (for sole traders, partnerships, and companies/trusts with an actively engaged non-wage director/shareholder/beneficiary)
  • business bank account details.
• Once you have enrolled your business for the JobKeeper payment, you need to advise all your employees in writing that they are registered with your business in this regard (we will provide a copy of this to you – please contact us in this regard).
• Ensure all eligible employees have been paid at least $3,000 in gross wages between 30 March and 26 April.

On or after 4 May

• If claiming the JobKeeper payment for the month of April, lodge the confirmation of eligible employee details through your Business Portal.
• If you require Lambourne Partners to lodge this for you through our Tax Agent Portal, please provide us with the following details:
  • each eligible employee’s name, type of employment, and residency status
  • business turnover for April 2020 (we can assist you if required)
  • projected turnover for May 2020 (we can assist you if required).

By 10 May (and by first few days of each month going forward)

• Identify whether your projected turnover for May 2020, or the relevant month commencing, makes you eligible for the JobKeeper payment from May, or the relevant month onwards. If you need any assistance in this regard, contact us.
• If you are eligible for May, or the relevant month commencing:
  • List and identify all your employees who are eligible for the JobKeeper payment
  • Organise for a “JobKeeper employee nomination notice” form to be completed and signed by every eligible employee (https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/) 
  • Review your payroll system and get this in order with the assistance of your bookkeeper or Lambourne Partners.
  • For those eligible employees who would be paid less than $1,500 per JobKeeper fortnight, plan ahead to ensure that they are paid this amount in each of the JobKeeper fortnights outlined above (each and every month).
• If you are eligible for May, or the relevant month commencing, enrol for the JobKeeper payment through your Business Portal.
• If you are eligible for May, or the relevant month commencing, and require Lambourne Partners to enrol you through our Tax Agent Portal, please contact us, and once we have received the following information from you we will then enrol your business:
  • JobKeeper turnover test confirmation notice (we will provide a copy of this to you
  • estimated number of eligible employees you believe you will be claiming for April
  • business participation details for the individual you are claiming in this regard (for sole traders, partnerships, and companies/trusts with an actively engaged non-wage director/shareholder/beneficiary)
  • business bank account details.
• Once you have enrolled your business for the JobKeeper payment, you need to advise all your employees in writing that they are registered with your business in this regard (we will provide a copy of this to you – please contact us in this regard).

End of May/Start of June (and each month going forward)

• If claiming the JobKeeper payment for the month of May and each month onwards, lodge the confirmation of eligible employee details through your Business Portal.
• If you require Lambourne Partners to lodge this for you through our Tax Agent Portal, please provide us with the following details:
  • each eligible employee’s name, type of employment, and residency status
  • business turnover for May 2020 or the relevant month just ended (we can assist you if required)
  • projected turnover for June 2020 or the relevant month just starting (we can assist you if required).

Please contact us below if we can help you work through this.

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