This information is current as of the latest updated date, however due to the evolving response to the crisis, we will update as changes occur.
Eligible businesses can now enrol with the ATO for the JobKeeper subsidy.
- From 20 April: enrol for JobKeeper payment.
- By 30 April: enrol and pay your employees to claim JobKeeper payments for April if eligible.
- 4 May onwards: identify your employees.
- Each month: reconfirm eligibility.
- If you need more time, you have until the end of May to enrol and identify your employees.
How to Enrol
Enrolment opened on 20 April 2020. If you wish to make a JobKeeper Payment ‘claim’ for the fortnights ended/ending 12 April 2020 or 26 April 2020, then you must register on or before 30 April 2020 (although the ATO have indicated that additional time may be available).
You register via the Business Portal using myGovID. Select ‘Manage employees’ then the link for JobKeeper Payment. Douglas & Harrison can also assist you with the enrolment.
Please note you may be restricted to making a claim until the month you satisfy the decline in turnover. Refer below turnover notes.
For claims in respect of all fortnightly periods starting on or after 27 April 2020, you must have enrolled on or before the end of the relevant fortnight. This for instance, if you expect you first become eligible in May 2020, and you wish to make a claim for the period ended 10 May 2020, then you need to have registered by 10 May 2020.
Things You Need to Do
- If you are not registered on the Single Touch Payroll (STP) system now, then consider registering as the primary means to determine entitlement will be via the STP system. If you do not report through STP, you can still claim the JobKeeper Payment; however, there will be a manual claim process, which will be slower.
- Collect information on your employees to determine if they are eligible, e.g. whether they are Australian citizens, the type of working visa they hold, whether you are the primary employer, length of service for casuals and which employees were engaged as at 1 March 2020. In this regard, if you have not already done so, you should send the ATO approved form to your employees – download a copy of the form here https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/. This form is to be retained by you and is not sent to the ATO;
- Ensure the ATO have your current bank account details so that you can receive the JobKeeper Payment. Your details may be out of date if you do not typically receive tax refunds;
- Start working with your Douglas & Harrison advisor to collect information on your actual turnover for March 2020, your forecasted turnover for the coming months and your actual turnover for the equivalent periods last year (see comments below in relation to the relevant turnover data); and
- Once you determine that your turnover has fallen by the required percentage (for most businesses it is more than 30%) then register with the ATO via the Business Portal using myGovID. Select ‘Manage employees’ then the link for JobKeeper Payment. Douglas & Harrison as your tax agent can also do this for you; and
- Once you have registered, notify all eligible employees that you are intending to claim the JobKeeper payment in respect of their employment with you; and
- Continue to pay your eligible employees the minimum of $1,500 (before tax) per fortnight (before tax) for each fortnight where you intend to make a claim for the JobKeeper Payment. This must be paid in advance of you seeking to claim the JobKeeper Payment; and
- If your employees are eligible from 30 March 2020 ensure you have paid them the minimum $1,500 per fortnight before 30 April 2020; and
- Check that your payroll system has the correct payroll categories set up. Contact the software provider or Douglas & Harrison if you are unsure if this has been completed or set up correctly;
- Make sure your Pay Runs to date have been reported correctly for Single Touch payroll as per your software provider instructions. This could include a manual transaction to each and every employee’s Pay Run for which you are claiming the JobKeeper payment thus Pay Runs will be more timely during this period and you may need to seek assistance to ensure it has been setup and is being processed correctly in order to avoid delays with payments.
What is GST Turnover
You need to establish that the business has faced either a 30% reduction in your actual or projected ‘GST turnover’. Most businesses would be expected to establish that their turnover has fallen, or will likely fall, for a ’Turnover Test Period’ relative to their turnover for the same period a year earlier (referred to as the ‘current GST turnover’).
The term ‘projected GST turnover’ is defined in the GST legislation and refers to income from ‘supplies’ that you are ‘likely’ to have for a period. Treasury have stated that a supply is ‘likely’ to be made where, on the balance of probabilities, it can be predicted that the supply is more likely than not to be made. The likelihood of a supply being made must be considered in the context of the facts and circumstances of a particular business. This test will be important in relation to the ‘integrity measures’ associated with the JobKeeper scheme.
Where your business has not been in operation a year earlier, or where your turnover a year earlier was not representative of their ‘present day’ usual or average turnover (e.g. because there was a material acquisition over the last year, you were scaling up or your turnover is typically highly variable), the ATO will have the discretion to consider ‘additional information’ that the business can provide to establish that the business has been adversely affected by the impacts of COVID-19.
A pronouncement made by Treasury indicates that the ATO will also have a discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business has ceased or significantly curtailed its operations). There will be some tolerance where employers, in good faith, estimate a greater than 30% reduction in turnover but actually experience a slightly smaller fall. However, employers need to be aware that this discretion was not codified in the Rules and is expected to be one of the items addressed via the additional (i.e. post 20 April 2020) ATO Guidelines and a legislative instrument.
The position remains unclear in respect of ‘service entities’ – i.e. where the employees are employed by a different entity to the one that conducts the business. In elaboration, the issue is that the prescribed reduction in turnover may need to be measured at the ‘service entity’ level rather than by reference to the turnover of the operational business per se. That is to say, the relevant turnover may be the ‘management/service’ fee charged by the service entity to the business. This issue may become especially problematic where the service entity provides services to multiple related employers.
When is the Turnover Test Period?
Any month that you choose from March 2020 to September 2020 inclusive – i.e. a choice of seven months; or
- The quarter ended 30 June 2020; or
- The quarter ended 30 September 2020
Importantly, the Rules do not require an alignment of your selection of the Turnover Test Period with the reporting period used in your BAS (i.e. monthly or quarterly). Thus a ‘quarterly BAS reporter’ could use a single month as the Turnover Test Period and vice versa.
The only restrictions on the choice of Turnover Test Period are that:
- You cannot use projected GST turnover for the quarter ended 30 September 2020 to determine an entitlement to the JobKeeper Payment for the period 30 March 2020 to 30 June 2020; and
- You cannot use projected GST turnover for a month in advance of a particular month for which you are seeking to claim an entitlement to the JobKeeper Payment. Thus, for example, you could not use a projected reduction of turnover in May 2020 to claim an entitlement to the JobKeeper payment in April 2020.
Basis for your Turnover
You may use an accruals basis of accounting to calculate both the current GST turnover and projected GST turnover as both calculations require you to include sales that you have made or are likely to make without any reference to when you are paid.
However, if you prepare your activity statements on a cash basis, the ATO will allow you to calculate both the current and projected GST turnovers on a cash basis. The basis used must be the same for calculating your projected and current GST turnover.
For further assistance please contact our office on 03 9579 3377 or firstname.lastname@example.org.