The Federal Government is providing $1,500 per eligible employee per fortnight to employers to keep employees connected to their businesses until 27 September 2020. An extension in JobKeeper Payments is also available for eligible organisations and employees until 28 March 2021 at reduced rates.
Payments will be available from the first week in May and will be backdated to the 30th of March. Subsequent payments will be received from the ATO monthly in arrears.
What is GST turnover?
GST turnover for the purposes of the JobKeeper payments is gross income, excluding:
Even if the organisation is not registered for GST, the GST turnover calculation still applies for the purpose of JobKeeper Payment eligibility assessment.
What is the consequence if I get the calculation of the current GST turnover amount wrong?
Entities should make a genuine effort to calculate and report current and projected GST turnover. If you later identify errors in the calculation, you will not be required to re-report to the ATO for JobKeeper, however BAS obligations are still required to be met.
Should we be calculating GST Turnover on a cash or accruals basis?
The ATO has advised that they expect Organisations to use the GST accounting method that is normally used when submitting the BAS. If you normally account for GST on an accruals basis, but seek to calculate on a cash basis (or vice versa), the ATO has advised that they may seek to understand the circumstances for using that basis.
Whichever basis you use must be used consistently in comparing the month or quarter in 2020 with the comparison period.
How do we determine if turnover has decreased by more than 15% or 30% and what is the turnover test period?
The periods for the turnover test comparison can be periods of one month or three months.
If a one month turnover test period is used, it must be one of the following months in 2020:
If a three month period is being used it must be one of the following periods in 2020:
For example, to work out your fall in turnover, you can compare either:
To determine if turnover has decreased by more than 15% or 30% for the first JobKeeper Payment extension period, actual GST turnover must have decreased in the June 2020 quarter and the September 2020 quarter relative to the comparable period (generally the corresponding quarters in 2019).
To determine if turnover has decreased by more than 15% or 30% for the second JobKeeper Payment extension period, actual GST turnover must have decreased in the June, September and December 2020 quarters relative to the comparable periods (generally the corresponding quarters in 2019).
Further information may be provided by the Federal Government on alternative tests where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019.
What is the decline in turnover required to be eligible for the JobKeeper Payment extension?
This has not changed from the first JobKeeper eligibility turnover test.
Actual GST turnover must have dropped by at least 30% for organisations with an aggregated turnover of $1 billion or less (15% for ACNC-registered charities other than universities and non-government schools who are subject to 30%) from a comparable period.
The only difference is that the turnover test will be comparing the actual GST turnover with a comparable period, rather than predicted GST turnover.
I lodge quarterly and for the 2020 June quarter I am predicting my turnover will be down 30% compared to the 2019 June quarter, which month should I select in my application?
You should select the first month of the quarter you predict your quarter will be down, it doesn’t matter which month in the quarter the fall in turnover is expected. For example, select April for the June quarter and select July for the September quarter.
Are donations included in the GST turnover calculations?
Yes, donations that Charities and Deductible Gift Recipients receive or are likely to receive (including the value of non-monetary gifts) are also included in the calculation to work out the current turnover and projected turnover. This means that when Charities and Deductible Gift Recipients have a significant decline in donations they may qualify for the JobKeeper scheme.
Are government grants included in the GST turnover calculation?
Charities (other than schools and universities) are allowed to elect to exclude conditional government grants when calculating the GST turnover for JobKeeper. This will allow employing charities receiving revenue from the government to use either their total turnover, or their turnover excluding government grants, for the purposes of assessing eligibility for the JobKeeper Payment.
Government grants include consideration for supplies you make, received from:
An Australian government agency;
A local government body
The United Nations or its agency
An ACNC-registered charity cannot exclude payments received for providing National Disability Insurance Scheme (NDIS) services from its turnover.
If you have elected to exclude government grants in the turnover test, complete and lodge an Election to exclude government grants from turnover for ACNC registered charities form. The form is currently only available to be signed manually and emailed to the ATO, however this can be done in the ATO Business Portal from 14th June. If you enrolled in JobKeeper before 13th June, this needs to be completed before 20th June. If you enrolled in JobKeeper after 14th June, it needs to be completed within 7 days of enrolment.
Our organisation is a charity and employees fully government funded employees. Are there impacts from excluding government grants from turnover?
Where a charity has elected to exclude government grants from its turnover, its fully government funded employees are not relevant employees. Therefore, the charity does not need to notify these employees of its election to participate in JobKeeper and the steps for nomination. However, the charity can choose to receive JobKeeper for these employees and must notify the employees and they must agree to be nominated by the charity.
Where a charity has not elected to exclude government grants from its turnover, all employees including fully government funded employees are relevant employees if they meet the eligibility criteria.
Our organisation is a registered religious institution, are we eligible for JobKeeper?
Yes, JobKeeper Payments are able to be made to religious institutions in respect of religious practitioners, excluding those who are students only.
Turnover hasn’t decreased more than 15% or 30% for March, what if it does in subsequent months?
You can apply to start receiving the JobKeeper Payment at a later time once the turnover test has been met. In this case the JobKeeper payment is not backdated to 30 March 2020.
You must apply for the JobKeeper payment within 7 days of the end of a calendar month if you are entitled to a JobKeeper payment for a fortnight that ends in that month.
Our organisation is a University, are GST turnover calculations applied differently?
Yes, the ATO has provided a modified basic test which applies to Table A and Table B providers within the meaning of the Higher Education Support Act 2003.
Refer to the ATO’s Turnover test for universities here.
Our organisation is less than 12 months old at 1 March 2020. How do we determine if turnover has decreased?
Where there is no corresponding period in 2019, there are two alternative tests which can be applied to calculate the comparative period GST turnover. These are compared with the turnover test period discussed above.
Please refer to the Treasury legislation here for further information if you have been impacted by the Bushfires or received Drought Help concessions.
The organisation went through an acquisition/disposal/restructure which has changed turnover significantly. How do we determine if turnover has decreased?
The ATO has released an alternative test which can be applied to determine the GST turnover. Refer to the Legislative Instrument and Explanatory Statement for more information.
Over the last 12 months our organisation has substantially increased turnover immediately before the turnover test period. How do we determine if turnover has decreased?
An alternative test is available if the organisation has had an increase in turnover immediately before the applicable turnover test period of:
If you use a quarter comparison period, use the total GST turnover for the three months immediately before the applicable turnover test period. If a month comparison period is used, divide this by three.
This is then compared with the turnover test period discussed above.
Our organisation has irregular turnover. How do we determine if turnover has decreased?
An alternative test is available if the organisation’s turnover is not cyclical and for the quarters ending in the 12 months immediately before the applicable turnover test period, the lowest turnover quarter is no more than 50% of the highest turnover quarter.
If you use a monthly comparison period, calculate the average monthly GST turnover for the 12 months leading up to the test period. If a quarter comparison period is used, multiply this by three.
This is then compared with the turnover test period discussed above.
What records do I need to keep to show how I calculated GST turnover for the 2020 turnover test period?
You will need to keep evidence and sufficient records to demonstrate how you calculated your projected GST turnover during the 2020 turnover test period and show how you took reasonable steps in making that calculation.
For purposes of determining projected GST turnover, the ATO will accept calculations based on a bona fide business plan, accounting budget or some other reasonable estimate based on the evidence about the projected facts and circumstances for the remainder of the turnover test period. Examples of evidence which would support projected sales include a decline in sales or being required to close/pause business as a result of government COVID-19 restrictions, evidence of reliance on tourism and economic forecasts.
Does an employer have to be assessed by the ATO as being eligible before any payments are made?
Eligibility for JobKeeper payments is a self-assessment process, however if a payment is made and the ATO later determines that the entity was not eligible, or entitled to a lesser amount, the entity will be required to repay the overpaid amount.
I haven’t received all of the nomination forms back from my employees. Can I still complete Step 2 ‘Identify and maintain your eligible employees’ of the JobKeeper application now for the ones I have received?
Yes, you can. You can either:
If you lodge now, you can add further employees later by contacting the ATO. You should encourage your employees to return their nomination forms to you as soon as possible.
Any eligible employees who do not return their forms by the 31 May (the deadline for enrolment to claim JobKeeper for the JobKeeper fortnights in April and May), will not receive JobKeeper for the JobKeeper fortnights in April. The first option should be selected by the end of May to ensure any eligible employees who have returned their forms can claim JobKeeper for the JobKeeper fortnights in April.
What happens if an employee resigns?
If the employee is one which you’re receiving JobKeeper Payments for, you must notify the ATO and potentially refund some money to the ATO.
Are Employment Termination Payments (ETPs) included as part of the minimum JobKeeper Payment rate amount to be paid?From JobKeeper fortnight 6 (8 June onwards) until the end of the scheme, ETPs cannot be included as part of the JobKeeper Payment rate. However if you claimed JobKeeper payments that included an ETP paid to a terminated employee in any of JobKeeper fortnights 1 to 5 (from 30 March to 7 June), the ATO will not recover an overpayment that has occurred as a result of these payments.
What is the JobKeeper Payment rate?
The JobKeeper Payment rate is the payment for fortnight per eligible employee received from the Federal Government.
For the period 30 March to 27 September 2020 this rate is $1,500 per eligible employee per fortnight.
For the extension period 28 September 2020 to 3 January 2021 this rate will be a maximum of $1,200 per eligible employee per fortnight.
For the extension period 4 January to 28 March 2021, this rate will be a maximum of $1,000 per eligible employee per fortnight.
From 28 September 2020 (the first extension period), lower payment rates will apply for employees that worked fewer than 20 hours per week.
What is included in the minimum JobKeeper Payment rate required to be paid to eligible employees?
The total includes:
The total does not include:
Some employees are on unpaid or paid leave, what do we do?
If these are eligible employees and you are an eligible employer, you will receive the JobKeeper Payment whether the employees are working, on leave or have been stood down.
Employees receiving Parental Leave Pay from Services Australia are not eligible for the JobKeeper Payment. However, employees on paid parental leave from their employee will be eligible.
Can employers select which of their eligible employees are covered by the JobKeeper scheme?
No, once an employer choses to participate in the JobKeeper scheme, all eligible employees (who have agreed to be nominated for the scheme) must participate, including employees who have been stood down.
An employee who was on government paid parental leave in the first few JobKeeper fortnights is now back from maternity leave. Can we claim JobKeeper payments for them?
Provided the employee isn’t receiving Government Parental Leave Payments in the applicable JobKeeper fortnight and meets the eligible employee requirements, you can claim the JobKeeper Payment for the employee for that fortnight. You can then continue claiming it for every JobKeeper fortnight thereafter.
To ensure that you are able to claim it for the employee in question, you will need to make sure that you include them when you identify and maintain your eligible employees.
How do I determine if a casual employee has been employed on a regular and systematic basis?
If there is a clear pattern or roster of hours, this is strong evidence of regular and systematic employment. If there is no clear pattern or roster, evidence can be established where the employer offered suitable work when it was available at times that the employee had generally made themselves available and work was offered and accepted regularly enough that it could no longer be regarded as occasional or irregular.
Am I required to pay PAYG on the JobKeeper Payment?You must pay the minimum JobKeeper Payment rate per fortnight to your eligible employees, withholding PAYG tax as appropriate. The minimum JobKeeper Payment Rate per fortnight per employee is a before tax amount and forms part of the employees’ taxable income.
Am I required to pay Payroll tax on the JobKeeper Payment?
Payroll tax is determined by each state and territory. Refer to our information on State Government Assistance.
Will the JobKeeper Payments impact payments from Services Australia for relevant employees?
Employees who are receiving payments from Services Australia (such as NewStart or JobSeeker) will need to notify Services Australia if they are receiving a JobKeeper Payment. The payment will form part of the employee’s notifiable income.
I pay my employees under an Award, how will the JobKeeper scheme impact on pay rates?
The rate of pay will be no less than the employee’s current rate or the relevant rate of pay in the employee’s award or agreement – whichever is greater. Refer to the worked examples below for further information.
Employers need to continue to comply with their obligations to employees under contracts, enterprise agreements, modern awards, etc., subject to the implementation of lawful measures such as stand down, etc.
My eligible employee’s contracted duties are no longer required, but I want to keep them on under the JobKeeper Scheme. What can I do?
An eligible employer who qualifies for the JobKeeper scheme may alter the employee’s duties and location of the employee’s work. These directions must be safe, reasonable, within the skills and competencies of the employee, and within the scope of the business’ operations.
An employer can also alter an employees’ hours of work by directing an employee to change either the days the employee works, the number of days the employee works or reduce the employees’ hours to zero (i.e. stand down). This only applies where the employee cannot usefully be employed at their normal days or hours because of changes attributable to COVID-19 pandemic; or government initiatives to slow the spread of COVID-19.
The following conditions also apply:
If employees have been stood down without pay since 1 March 2020, what happens if the employer is able to find a work opportunity where the employees may be able to work, say 3 days per week? Does the employer pay the difference between the earnings that week and the JobKeeper Payment rate?
The JobKeeper payment is not income-tested, so employees may earn additional income without their payments being affected, provided they maintain their employment (including being stood down) with their employer who is entitled to receive JobKeeper payments.
What are the requirements I need to meet as an eligible employer when paying eligible employees?
What happens if we pay employees monthly rather than fortnightly?
If your payroll period is less or more frequent than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay every four weeks, it will be reasonable if the employee is paid at least $3,000 every four-week period, for the initial JobKeeper period.
What is reasonable will depend on your particular circumstances. Refer to the ATO’s information on how much to pay for further information.
What happens if our actual GST turnover for our turnover test period is greater than our projected GST turnover?
The ATO has advised that you will not lose access to the JobKeeper Scheme unless they have reason to believe that your calculation of your projected GST turnover was not reasonable.
However a significant variance between accrual and projected turnover may trigger an enquiry from the ATO.
If the ATO determines that a scheme has occurred with the sole purpose of obtaining a JobKeeper payment, or increased amount of JobKeeper payment, the Commissioner will be able to recover any overpayments and will have the power to impose penalties and interest.
For reporting months other than April, do I need to report my current and projected GST turnover to the ATO by the 14th day of the following month?
Yes, the extended due date only applies to the monthly reporting requirement for April. The ATO have advised that the sooner you make your monthly Business Declaration, the sooner you will receive your JobKeeper Payment.
As I won’t know if we meet the JobKeeper Payment extension eligibility requirements until after the quarter has finished, do I have to pay my eligible employees in advance of hoping to receive the JobKeeper payment in arrears?
Yes, as the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, you will need to assess your eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition.
However, the Commissioner of Taxation will have discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility for the JobKeeper Payment.
Employer with employees on different wages
Adam owns a real estate business with two employees. The business is still operating but Adam expects that turnover will decline by more than 30 per cent in coming months. The employees are:
Adam is eligible to receive the JobKeeper Payment for each employee, which would have the following benefits for the business and its employees:
The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax, and the business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s salary. The business will continue paying the superannuation guarantee on Anne’s income;
The business continues to pay Nick his part-time salary of $1,000 per fortnight before tax and an additional $500 per fortnight before tax, totalling $1,500 per fortnight before tax. The business receives $1,500 per fortnight from the JobKeeper Payment which will subsidise the full cost of Nick’s salary. The business must continue to pay the superannuation guarantee on the $1,000 per fortnight that Nick is earning. The business has the option of choosing to pay the superannuation guarantee on the additional $500 paid to Nick under the JobKeeper Payment.
Sourced from: treasury.gov.au
Employer with employees who have been stood down without pay
Zahrah runs a beauty salon in Melbourne. Ordinarily, she employs three permanent part-time employees, but due to the Coronavirus she has temporarily closed her doors as a business and has stood down her three employees without pay.
Zahrah’s turnover will decrease by more than 30%, so she is eligible to apply for the JobKeeper Payment for each employee. She receives $1,500 per fortnight for each of her three employees for up to 6 months and she is required to pass these payments onto the employees. Zahrah will maintain the connection to her employees, and be in a position to quickly resume operations.
Zahrah is required to advise her employees that she has nominated them as eligible employees to receive the payment. It is up to Zahrah whether she wants to pay superannuation on the additional income paid because of the JobKeeper Payment.
If Zahrah’s employees have already started receiving income support payments like the JobSeeker Payment, when they receive the JobKeeper Payment they must advise Services Australia of their change in circumstances online at my.gov.au or by telephone.
Sourced from: treasury.gov.au
Retesting turnover under the JobKeeper extension
Carmen owns and runs the City Café. Carmen started claiming the JobKeeper Payment for her eligible staff and herself as a business participant when the JobKeeper Payment commenced on 30 March 2020. At the time, Carmen estimated that the projected GST turnover for City Café in April 2020 would be 70 per cent below its actual GST turnover in April 2019. To be eligible for the JobKeeper Payment from 30 March 2020 to 27 September 2020, Carmen needed to show the turnover for the City Café was estimated to decline by at least 30 per cent.
As a monthly BAS lodger, Carmen submitted her BAS for the City Café in April, May and June. For each of these, her actual turnover was as follows:
April – June 2020 quarter $170,000 April – June 2019 quarter $600,000
Therefore a decline for June quarter of 72% per cent
From July to September, actual turnover improved as follows:
July – September 2020 quarter $400,000 July – September 2019 quarter $600,000
Therefore a decline for September quarter of 33% per cent
The actual turnover decline for both the June and September 2020 quarters was still greater than 30 per cent, so City Café was eligible for the Jobkeeper Payment for the period of 28 September 2020 to 3 January 2021.
Business continued to improve for the City Café, and actual turnover for the December 2020 quarter was 20 per cent less than the December quarter 2019, so the City Cafe was no longer eligible to claim the JobKeeper for the second extension period starting from 4 January 2021
Working out the JobKeeper Payment rate to be claimed (continued scenario from above)
In the scenario above, Carmen also needs to calculate how much to claim for each of her staff, and for herself as a business participant.
As Carmen was working full-time at the café herself throughout February 2020, she is entitled to claim $1,200 per fortnight from 28 September 2020 to 3 January 2021, as an eligible business participant.
She has three full-time employees who are also eligible to be paid $1,200 per fortnight because they each worked 20 hours or more per week throughout February 2020.
Carmen has an employee, Chris, who works part-time with different hours every other week: 14 hours one week; and 22 hours the next week. During the two pay fortnights prior to 1 March 2020, Chris was employed for 36 hours in each fortnight. On average, Chris worked less than 20 hours per week for City Café. Carmen is eligible to claim $750 per fortnight for Chris, from 28 September 2020 to 3 January 2021.
Cathy is an eligible employee who worked on a long-term casual basis during February 2020. To determine what rate of JobKeeper Payment to claim for Cathy, Carmen looks at pay records for the two fortnightly pay periods before 1 March 2020. She sees that Cathy was employed on average less than 20 hours per week, so Carmen claims $750 per fortnight for Cathy, from 28 September 2020 to 3 January 2021.
Carmen also started employing Charles from September 2020. Because Charles was not employed at City Café on 1 March 2020, Carmen cannot claim the JobKeeper Payment for Charles.
Sourced from: treasury.gov.au
Subscribe to the NFPAS email newsletter to receive not for profit industry news and special updates.