COVID-19 RESOURCE HUB
Your business and JobKeeper payments: keeping employees on the payroll
5 min read
On the 30th of March 2020, the Australian Federal Government announced a new wage subsidy measure to combat job losses and grant businesses the means to pay staff.
The package has been dubbed the ‘JobKeeper’ payment and will be worth $130 billion, securing income for an estimated six million Australian workers.
Let’s dive into the details, check eligibility criteria and ascertain how your small business can benefit.
What is the JobKeeper payment?
- Employers affected by COVID-19 related revenue loss will be paid $1,500 per fortnight, per employee.
- Business must have suffered at least 30% in revenue losses to qualify.
- This $1,500 (before tax) per fortnight will be paid to your employees (through you) for six months.
- Payments will begin on March 30, 2020.
- Job losses are ‘backdated’ to March 1, 2020, but casual staff need to have been employed for 12 months or longer.
Register your interest with the ATO here: JobKeeker Payment
Eligibility for businesses
All Australian businesses, not for profits, sole traders, partnerships, trusts and charities will qualify for JobKeeper, provided you meet the following criteria:
- You have a turnover of less than $1bn and have lost 30% or more of your revenue compared to a comparable period a year ago.
- You have a turnover of $1bn or more and have at least a 50% reduction in revenue compared to a comparable period a year ago.
Eligibility for employees
Both employee and employer must be eligible to receive JobKeeper payments.
Ensure your employees conform to the following criteria before applying:
- Are 16 years of age or older
- Were employed up until at least 1 March, 2020
- Are/were a full-time worker
- Are/were a part-time worker
- Are/were casual workers with at least a 12-month work history
- 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.
What is the reasoning behind it?
Treasurer Josh Frydenberg said this measure was designed for retrenched staff in order to “put them back on the books”.
We want staff to stay on the books. The government wants staff to stay on the books. Staff certainly want staff to stay on the books.
However, employers and sole traders like yourself are finding it increasingly unfeasible to do exactly this.
That’s where the JobKeeper payment comes in:
- Even if there is no work, employees are still ‘in the job’ and earning a wage.
- This will make a rebound much quicker and smoother as people will still be on the payroll, even if the business is shut.
- This will keep employees off JobSeeker (previously Newstart) to free up the service.
- There is an obvious benefit in protecting Australian’s livelihoods and businesses.
What if you have already laid off staff?
You can still receive this payment and help your staff. Please apply.
If you have been forced to lay off staff from your business, please be aware you can now keep them on the books and supply them income from the JobKeeper payment at no cost to yourself.
This will be backdated to March 1, 2020, so lodge a request on behalf of any staff you had to let go due to a decrease in revenue or government restrictions.
Again, your revenue must have dropped at least 30% from this time last year to qualify.
How about sole traders, the self-employed and gig workers?
After a lot of stimulus measures in recent weeks seemed to bypass the sole trader or gig worker (such as Uber drivers or food delivery riders), this new JobKeeper payment will also be paid to the self-employed.
If you’re a freelancer, sole trader, gig worker or contractor – you essentially employ yourself.
This means you can claim this $1,500 per fortnight payment on your own behalf.
Apply now if you are self-employed.
Does everyone get $1500?
Yes. This is a flat rate.
Even if your employee was earning less than $1,500 per fortnight, they’ll still receive the full amount. If they were earning more, they still get $1,500.
As an employer, you can choose to top this wage up and can also make decisions on how to pay super.
Keep in mind the $1,500 is before tax and must be paid in full to your employees.
What if my laid off staff are now on JobSeeker payments?
Have a discussion with your employee or (recently) ex-employee. It’s likely worth their while to cancel applications for JobSeeker payments and take a higher JobKeeper payment through your business instead.
They cannot claim both and the JobKeeper payment (which represents a higher payment than JobSeeker) will be the superior option for you and your staff.
See the Government’s JobKeeper Payment FAQ Fact Sheet for more information.
For official up-to-date information and contacts:
- Register your interest for JobKeeper payments with the ATO here: JobKeeker Payment
- The ATO COVID-19 page
- The gov COVID-19 page
- Australian Government: gov.au
- Australian Treasury: gov.au
- ATO’s Emergency Support Infoline for businesses: 1800 806 218
- gov: Businesses impacted by COVID-19 can call 13 28 46