In the third and largest economic stimulus package the Government has announced a $130 billion JobKeeper wage subsidy to businesses that are significantly affected by COVID-19.
Fortnightly payments of $1,500 (before tax) per eligible employee will be delivered by the ATO and paid to businesses including companies, partnerships, trusts and sole traders, not-for-profits and charities who will be required to pass on the full payment.
To qualify
Businesses with a turnover of less than $1 billion will need to self-assess a reduction in revenue of 30 per cent or more, relative to a comparable period a year ago.
Businesses with a turnover of more than $1 billion will need to demonstrate a loss of 50 per cent of revenue.
Eligible employees will include those employed by the employer as at 1 March 2020, including those who have been stood down. Retrenched workers can be rehired to qualify for the payment.
How to apply
Eligible businesses must elect to participate in the scheme and apply on the ATO’s website which we encourage you to do as soon as possible by “clicking” on the aforementioned link.
Information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business, including those stood down or rehired, will need to be provided to the ATO when requested. For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
The ATO will make payments to the employers monthly in arrears, but the first payment will be sent in the first week of May and will be backdated to 30 March 2020 to allow employers to start paying their workers now. Employers will be required to report the number of eligible employees employed by the business to the ATO on a monthly basis.
What employees will get
Businesses must pay their employees a minimum of $1,500 per fortnight, before tax.
According to Treasury’s fact sheet, if an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements, with the JobKeeper payment to subsidise all or part of their income.
If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax, meaning employers will not be able to pocket the difference.
If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
The $1,500 will be taxed as ordinary income, but employers can choose to pay superannuation on the amount.
Employees who receive the JobKeeper payment will not be allowed to double dip with the recently expanded JobSeeker payment, which is paid through Services Australia.
We have already received many questions regarding the operation of this new stimulus and understand many of our clients need to make important decisions principally in relation to their employees and are finding it difficult to navigate the complexities of these Government announcements to ensure eligibility.
Therefore we are encouraging you to read the initial factsheet below and ask that you email our dedicated client service coordinators with your questions and they will respond back to arrange a telephone call with the relevant partner or manager over the next few days.
Their details are as follows;
Elyse@quantumpartners.net.au
Wendy@quantumpartners.net.au
Sandra@quantumpartners.net.au
For more detailed information including examples
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