In this sponsored post, chartered accountant GAIL FREEMAN has some useful advice about getting through the JobKeeper application maze.
In these unforeseen times, I am dealing with many financial questions from clients seeking clarity around issues arising from government programs aimed at helping to get us through this pandemic. If readers, especially business owners and employers, need information or have financial questions, please send them to firstname.lastname@example.org and my accounting team will provide answers.
For example, I’ve had a lot of questions around the JobKeeper program, which provides a payment of $1500 a fortnight for “eligible employees” subject to certain conditions being met.
Only an “eligible employer” can receive this. An eligible employer needs to meet the decline-in-turnover test. If annual turnover is less than $1 billion, there needs to have been a drop of at least 30 per cent.
In addition, a business has to have held an ABN on or before March 12 and employed at least one eligible employee on March 1.
Businesses can trade as a sole trader, partnership, company or trust. There are special rules that apply to new or changed businesses and tax professionals are best placed to provide advice. There are also special rules for not-for-profits.
Turnover drop is self-assessed, so it’s important to get it right and not run foul of the anti-avoidance provisions. There are three test periods that can be used to calculate the 30 per cent turnover drop: March, 2020, against March, 2019; projected income April, 2020, against actual income in April, 2019, and projected income April to June, 2020, against actual income April to June, 2019.
Turnover is the GST turnover of a business, even if it’s not registered for GST.
Eligible employees must have been employed by the business on March 1 on a permanent basis, either full time or part time, or a casual over the age of 16 employed on a regular or systematic basis for at least 12 months and not have a permanent job elsewhere.
In addition, eligible employees must be either an Australian citizen, the holder of a permanent visa or a Protected Special Category visa. An eligible employee can only receive JobKeeper from one eligible employer. Eligible employees must not be receiving government-funded parental leave.
An employer needs to have paid all eligible employees at least $1500 a fortnight from March 30. Anyone stood down needs to have been re-engaged effective March 30 in order to receive JobKeeper.
The payment is a reimbursement of wages that have been paid by the employer. As JobKeeper is a wage payment, it will need to be included on the income statement issued at the end of the year, tax will be deducted each fortnight and superannuation needs to be paid for hours worked. The subsidy must be paid to employees.
Each eligible employee has to provide a signed form that is kept on file. Employers need to register with the ATO (a tax professional can do this) stating the number of employees and sign a declaration. The ATO needs to be advised of the amount a company pays each fortnight, through single touch payroll. The ATO also needs to be advised of turnover, it will not matter if this goes up; you only need to satisfy the decline in turnover test at the relevant time.
For advice on JobKeeper and other subsidies, contact the friendly team at Gail Freeman & Co Pty Ltd on 6295 2844 or visit gailfreeman.com.au
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser.