JobKeeper is changing

Here’s what you need to know

Many Australian small businesses say JobKeeper has been a lifesaver in these difficult times, and Xero Small Business Insights data seems to bear that out. So it’s good to hear JobKeeper has been extended, with some notable changes. We’ve tried to capture what’s new with the wage-subsidy program below.

There are some complexities, so we recommend you see your trusted bookkeeper or accountant for the fullest picture, as well as visit the ATO’s JobKeeper extension page.

Eyes on September

If you want the JobKeeper changes summarised in 15 words, the Institute of Certified Bookkeepers has captured them nicely: “Nothing changes before end-September. Then some employers become ineligible, and some receive less.

You may remember that in your original application for JobKeeper, you had to document a one-time drop in business revenue of at least 30%. It only applied to eligible employees who were with you before 1 March 2020.

After end-September 2020, you’ll need to document an ongoing actual decline of 30% or more. And the decline must be quarterly, whereas at JobKeeper’s launch, you had more flexibility in choosing a period. It will still apply only to eligible employees who were with you before 1 March.

What does this change look like in practice?

For employers to be eligible for JobKeeper payments from 28 September 2020 to 3 January 2021, they must have recorded an actual decline in turnover of 30% or more in both:

  • the quarter ended 30 June 2020 (compared with the same quarter in 2019)
  • the quarter ended 30 September 2020 (compared with the same quarter in 2019)

In the new year, the same pattern holds. To be eligible for JobKeeper payments from 4 January to 28 March 2021, you must have also had an actual decline in turnover of 30% or more in the quarter ending 31 December 2020 compared with the same period in 2019. You can rely on the team at Notch Above Bookkeeping to help you crunch the numbers. And note the ATO does allow for alternative tests.

Smaller subsidy

If you remain eligible for JobKeeper payments after September, you’ll find that the wage subsidy is less generous. The $1,500 flat payment per employee, per fortnight, could drop by more than half. There are no changes to employee eligibility requirements. The changes are as follows.

For eligible employees who work 20 hours or more per week:

  • $1,500 per fortnight payment continues until the fortnight ended 27 September
  • $1,200 per fortnight until 3 January 2021
  • $1,000 per fortnight until 28 March 2021

It remains to be seen whether JobKeeper will extend past March 2021.

For eligible employees who work less than 20 hours per week:

  • $1,500 per fortnight payment continues until the fortnight ended 27 September
  • $750 per fortnight until 3 January 2021
  • $650 per fortnight until 28 March 2021

Remember that as an employer, you must pay your staff before claiming the reimbursement from JobKeeper. So you’ll want to take a close look at your revenue, your payroll and determine how these changes will affect your cash flow. Again, it’s advisable to speak with your bookkeeper or BAS agent to ensure you’re factoring in everything.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business payroll covered. If you have questions in relation to eligibility and reporting requirements for the JobKeeper Payment scheme call our team on 1300 015 130 for specific advice regarding your business.

Source: Xero

JobKeeper 2.0

Extension of the JobKeeper payment

It was welcome news that the government has announced the JobKeeper Payment scheme will be extended by six months until 28 March 2021, doubling the length of the initial scheme.

However payments have been reduced and business eligibility will be reassessed:

  • The rate will reduce from $1,500 per fortnight to $1,200 or $750 depending on the hours eligible employees worked in February 2020
  • From 4 January 2021 it will reduce again to $1,000 or $650 per fortnight, again, depending on hours worked in February 2020
  • Turnover is retested each quarter to ensure businesses remain eligible. To be eligible for the first round, a reduction in turnover will need to be shown for the June and September quarters based on prior year.

JobKeeper 2.0 is yet to be legislated but we expect it will be passed into law in late August at which time the finer details will be known.

We will be in touch with all clients currently receiving support in respect of their JobKeeper requirements to ascertain if they continue to be eligible ensuring that they do not miss out on this important stimulus measure.

Please contact your Notch Above consultant directly if you wish to discuss how this affects your business. For further details please see this Treasury factsheet and our video on this page.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business bookkeeping covered. If you have questions in relation to eligibility and reporting requirements for the JobKeeper Payment scheme, read more on the ATO’s website or call our team on 1300 015 130 for specific advice regarding your business.

JobKeeper audits underway

First reports of ATO audits lands one small business in debt

Imagine going through all the rigmarole to apply for JobKeeper when COVID-19 restrictions were rife, only to find your application rejected months later by Tax Office auditors?

That is what has now happened to one small business owner who took a DIY approach to their JobKeeper application.

The worst part is that they now have a $30,000 debt with the tax office and will not be allowed to recover any JobKeeper payments already paid to their employees.

Because of this, the business is possibly facing bankruptcy.

From the outset of the JobKeeper payment subsidy being made available to eligible Australian employers, the ATO has continually cautioned applicants to keep contemporaneous documentation of their calculations and advice to avoid inevitable audit scrutiny.

While the ATO always declared taking an ‘understanding and sympathetic’ approach when reviewing JobKeeper turnover projections, recipients have been urged to document their application and estimates as much as possible to cover all bases when the ATO comes knocking.

Be assured that the ATO will come knocking. The ATO COVID-19 Taskforce reaffirmed their approach in its Law Companion Ruling 2020/1.

“In terms of our attitude to compliance, this program is about helping Australians who are experiencing financial difficulty and it is not drawn at the hard line in terms of 30 per cent where I go out and investigate the person who is sitting at 29.95 per cent,” the Taskforce Chair said. “The focus is on people who will be deliberately rorting the system.”

Not that the small business owner set out to deceive the tax office. However their misunderstanding or misinterpretation of the rigorous eligibility and reporting requirements caused them to come unstuck, particularly when the rules around the JobKeeper were constantly changing during the first release of the scheme.

Coherent and cogent documentation is the best defence should the ATO start asking you for information. It is being able to produce a piece of paper or record that explains and therefore satisfies an auditor’s demand for proof.

A mistake that many taxpayers make is downgrading the ATO’s seriousness around JobKeeper audits. Thinking ‘I’ll worry about it when it happens’ is compounded by the passing of time which blurs our recollection of events because so much has happened in the interim, so make sure you check that all your pays are correct and on time.*

Had the business owner sought professional advice from a creditable bookkeeping professional, the outcome could’ve been completely different.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business bookkeeping covered. If you have questions in relation to eligibility and reporting requirements for the JobKeeper Payment scheme, read more on the ATO’s website or call our team on 1300 015 130 for specific advice regarding your business.

* If JobKeeper is being processed by Notch Above Bookkeeping on behalf of your business, then be assured this is in hand.

Extension of the JobKeeper Payment

The Government is extending the JobKeeper Payment by a further six months to March 2021

Support will be targeted to businesses and not-for-profits that continue to be significantly impacted by the Coronavirus. 

The payment rate will be reduced and a lower payment rate will be introduced for those who work fewer hours. Other eligibility rules remain unchanged.

Summary

The JobKeeper Payment, which was originally due to run until 27 September 2020, will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.

The payment rate of $1,500 per fortnight for eligible employees and business participants will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021. From 28 September 2020, lower payment rates will apply for employees and business participants that worked fewer than 20 hours per week.

From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).

From 28 September 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the June and September quarters 2020. They will need to demonstrate that they have met the relevant decline in turnover test in both of those quarters to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.

From 4 January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December quarters 2020 to remain eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

  • 50 per cent for those with an aggregated turnover of more than $1 billion;
  • 30 per cent for those with an aggregated turnover of $1 billion or less; or
  • 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020.

The JobKeeper Payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

Other eligibility rules for businesses and not-for-profits and their employees remain unchanged. Further information on those rules is at ato.gov.au/General/JobKeeper-Payment/.

The JobKeeper Payment rate

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:

  • $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:

  • $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $650 per fortnight for other eligible employees and business participants.

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

The Commissioner of Taxation will have discretion to set out alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 reference period. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020.

Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.

The JobKeeper Payment will continue to be made by the ATO to employers in arrears. Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee. This is called the wage condition.

Additional turnover tests

In order to be eligible for the JobKeeper Payment after 27 September 2020, businesses and not-for-profits will have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements for the JobKeeper Payment.

In order to be eligible for the first JobKeeper Payment extension period of 28 September 2020 to 3 January 2021, businesses and not-for-profits will need to demonstrate that their actual GST turnover has significantly fallen in the both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019).

In order to be eligible for the second JobKeeper Payment extension period of 4 January 2021 to 28 March 2021, businesses and not-for-profits will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019).

The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion. Information about the existing discretion is at https://www.ato.gov.au/General/JobKeeper-Payment/Employers/.

Businesses and not-for-profits will generally be able to assess eligibility based on details reported in the Business Activity Statement (BAS). Alternative arrangements will be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).

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, businesses and not-for-profits will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO). 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.

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will need to demonstrate that they have experienced the following decline in turnover (which remains the same as existing rules):

  • 50 per cent for those with an aggregated turnover of more than $1 billion;
  • 30 per cent for those with an aggregated turnover of $1 billion or less; or
  • 15 per cent for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).

Registered religious institutions responsible for religious practitioners will continue to be eligible to receive the JobKeeper Payment provided they meet existing eligibility requirements and the additional turnover tests during the extension period.

Further information for employers is at https://www.ato.gov.au/General/JobKeeper-Payment/Employers/ or call the team at Notch Above Bookkeeping on 1300 015 130.

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Source: Australian Government (2020). Retrieved from The Treasury https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-JobKeeper_Payment_extension.pdf
Xero Payroll

Deadline for JobKeeper is extended

Xero users are covered

If you’re one of the 800,000 Australian businesses interested in JobKeeper, be aware that the window to enrol for the subsidy payments from end-March has been extended.

You now have an extra month, as the ATO has set a deadline of 31 May.

Xero has built new tools that make it simple for you to check your eligibility for relief, pay employees a wage subsidy and file required reports to the tax office.

Xero’s developers have build these tools in close consultation with the ATO. The features are designed to streamline the process of applying for and processing government relief. It’s just the start of efforts at Xero to make accessing government help easier, so stay tuned for further updates.

Here’s a brief overview of the steps to take, from getting started to processing JobKeeper payments to your employees.

1. Check whether your business is eligible with our turnover calculator

A key criterion for eligibility is showing that your business’ turnover has dropped by 30%, though there are exceptions. The calculator in Xero can determine how much your revenue has changed over a set period of time.

2. Ensure you’ve set up STP and enrol your business with the ATO 

Single Touch Payroll is the simplest route to receiving a JobKeeper subsidy as you’ll be able to easily report each pay run to the ATO. If you’re not on STP, getting started is simple. Once you’re set up, head over to the ATO website to register your business for JobKeeper. 

3. Enroll employees who may be eligible for JobKeeper payments

Xero Payroll will compare the government’s eligibility criteria and data in Xero to suggest a list of employees who are likely to be eligible. To enrol them, head here and simply click “Start JobKeeper.” Select the fortnight in which you want each employee’s JobKeeper payment to start. While you have until 31 May to enrol, the ATO encourages you to do so by the end of April to ensure you receive your JobKeeper payments as soon as possible. Note the Tax Office plans to pay employers one month in arrears.

4. Report JobKeeper payments you’ve made to employees

Xero added a new pay item, “JobKeeper Payment top up,” so that you can accurately report these payments to the ATO. You just need to add the item to your employee’s payslip. Note that businesses can now process payroll after 30 April and still receive a subsidy. Per the ATO: “For the first two fortnights (30 March – 12 April, 13 April – 26 April), we will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020.”

The ATO also requires that you report details on your revenue and staff numbers each month, which Xero will help you do. Ask the team at Notch about processing payments.

This is a brief overview and we recommend getting in touch with our team at Notch Above Bookkeeping for detailed advice on the JobKeeper program. If you don’t have a business bookkeeper who is across the JobKeeper payment subsidy scheme, contact us today on 1300 015 130.

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Source: Deadline for JobKeeper is extended. Xero has you covered – Xero Blog (2020). Available at: https://www.xero.com/blog/2020/04/deadline-for-australias-jobkeeper-is-approaching-xero-has-you-covered/?fbclid=IwAR1-gXvIdledLRC1-Orsv1ZHMoEtziMDT6Qiblb5CCU8mOu3B4t-pU3z3Ag (Accessed: 28 April 2020).
calculator financials pen

Superannuation guarantee amnesty

Superannuation guarantee amnesty bill passed by Parliament

The superannuation guarantee amnesty bill passed Parliament on 24 February and has now received Royal Assent and is law.

This law change provides a number of incentives for employers to pay any unpaid historical superannuation guarantee (SG) amounts relating to the period 1 July 1992 to 31 March 2018.

Superannuation guarantee amnesty benefits

Provided superannuation guarantee charge (SGC) relating to the period above is paid during the amnesty period of 24 May 2018 until 6 months after the date of Royal Assent (6 September 2020), eligible employers will receive the following benefits:

1. The SGC will be deductible

The SGC, which is usually non-deductible, is comprised of the following amounts:

  • the total SG shortfall – that is, the total of the SG shortfalls for each affected employee;
  • interest on SG shortfalls – currently 10% per annum on each individual SG shortfall; and
  • an administration fee – usually $20 per employee, per quarter (but note point 2 below).

2. The administration fee component of the SGC will be waived.
3. No penalties will be applied for failing to lodge an SGC statement.

In usual circumstances, this penalty can be up to 200% of the SGC amount. A further incentive is that if any SG shortfall relating to the period between 1 July 1992 and 31 March 2018 is not disclosed during the amnesty period (24 May 2018 until 6 months after the date of Royal Assent) and this is subsequently uncovered by the Australian Taxation Office, a minimum penalty of 100% of the SGC will apply.

If you would like to discuss this matter further, including the eligibility criteria and how to make a disclosure in the correct form, please contact Notch Above Bookkeeping on 1300 015 130.

JobKeeper Enrolments Start Monday 20 April

There has been a lot of talk around the JobKeeper payment and at last we have a few more specific details. 

Enrolments will start on Monday and be open for two weeks for the first payment period.

There is a step-by-step process to follow for this scheme which we can do for you to allow you to continue focusing on your business.

The subsidy will be paid for a maximum period of six months, from 30 March 2020 up until 27 September 2020 and may be worth up to $19,500 per eligible employee. It will be paid to eligible businesses monthly in arrears, with the first payment commencing to employers from the first week of May 2020.

Under the scheme, eligible businesses will receive a payment of $1,500 per fortnight per eligible employee and/or for one eligible business participant.

The questions that need to be answered for your business include:

  • Is my business eligible?
  • Has my business met the reduction in turnover test?
  • Which of my employees are eligible?
  • Do I need to provide top-up payments to employees?

There are changes to the Fair Work Act so that Employers can manage their workforce more flexibly over the next six months.  Please see the detailed information sheet from Fair Work here.  We can’t provide HR advice but this document does summarise the changes.

We could have not foreseen the COVID-19 pandemic and the extent of work required in the Jobkeeper enrolment, applications and ongoing administration that is required to be completed on your behalf to ensure you receive your entitlements. Unfortunately, this is additional work that is outside your current Notch Above Bookkeeping Package.

Please see the details of our offer here.

We are looking forward to managing this process for you.  To ensure we schedule time to register your business during the application open period, please accept so we can schedule in your business application for JobKeeper in our next week’s workload.

Got any questions? Just contact Notch Above Bookkeeping for further clarification on the new subsidy on 1300 015 130.

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Brisbane Bookkeeping Notch Above Bookkeeping

JobKeeper – Waiting on Release of Further Details

No doubt you have questions around the JobKeeper payment and how this works

As you probably are aware the Bill has been passed but as yet we do not have any further details. 

We believe this information will be released shortly and as soon as we know more can let you know.

In the meantime, we encourage you to register your intention to apply for JobKeeper at https://www.ato.gov.au/Job-keeper-payment/ if your business has, or expect it will, experience a drop in turnover.

We can assist with the practicalities of claiming and submitting payment to your employees once the details are released.

There appears to be three areas of work being:

  1. Are my employees eligible?
  2. Has my business experienced a 30% decline in turnover?
  3. What reporting is needed ongoing to receive this payment?

Again, we will let you know what is required when we know more.

Have an enjoyable week ahead and one of our team will be in touch with further details as they come to hand.

Got any questions? Just contact Notch Above Bookkeeping for further clarification on the new subsidy on 1300 015 130.

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Coronavirus Jobkeeper Payment

Federal Government offers $130b in coronavirus wage subsidies for businesses to pay workers

The Government has announced a $130 billion JobKeeper payment to help keep more Australians in jobs and support businesses affected by the significant economic impact caused by the Coronavirus.

Around 6 million workers will receive a fortnightly payment of $1,500 (before tax) through their employer. The payment ensures eligible employers remain connected to their workforce and will help businesses restart quickly when the crisis is over.

Information for employers

If your business has been significantly impacted by the Coronavirus you will be able to access a wages subsidy to continue paying your employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. This assistance will help you keep staff and will help you restart when the crisis is over.

To register your interest, please visit the Australian Taxation Office: https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper

What employers will need to do is reach out to their banks knowing that they will have this confirmed money flow coming from tax office, namely from the Government, and then that will give them the ability to pay their employees. 

Information for employees

The JobKeeper payment helps businesses significantly impacted by the Coronavirus cover the costs of their employees’ wages, so more Australians can retain their jobs and continue to earn an income. Your employer will notify you if they intend to claim the fortnightly payment of $1,500 on your behalf.

Got any questions? Just contact us for further clarification on the new subsidy on 1300 015 130.

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Source: JobKeeper payment | Treasury.gov.au (2020). Available at: https://treasury.gov.au/coronavirus/jobkeeper (Accessed: 30 March 2020).