There are three distinct steps in the enrolment and payment of the JobKeeper Payment.  These are:

Step 1:             Enrol for the JobKeeper Payment (see below)

Step 2:             Identify and maintain your eligible employees

Step 3:             Make a business monthly declaration

Step 1 is detailed below. Step 2 is dealt with further on

STEP 1: ENROLMENT IN JOBKEEPER

When you proceed to the Australian Taxation Office Website to enrol in the JobKeeper program, these are the questions that you will; need to answer.

Questions required to enrol in the JobKeeper Program

  1. Login to the Business Portal using MyGov ID 
  1. Select “Manage Employees” then the link for the JobKeeper payment 
  1. Answers to the following questions (depending on type of entity
    1. For entities with less than $1 billion turnover:
      1. Has your turnover for the entity fallen or is likely to fall 30% or more?
        1. Yes/No 
    2. For entities with more than $1 billion turnover
      1. Has your turnover for the entity fallen or is likely to fall 50% or more
        1. Yes/No
    3. For ACNC Registered charities
      1. Has your turnover for the entity fallen or is likely to fall 15% or more
        1. Yes/No 
    4. For which month in 2020 have you experienced or likely to experience a reduction in turnover (select Month from dropdown)  (Call if you need assistance here but imagine it would be March or April 2020 for this initial enrolment for the first 2 fortnight JobKeeper Payments)
    5. If enrolling for April 2020, the number of expected employees for each JobKeeper fortnight in April. Do not include Business Participants here.
      1. You will need number of eligible employees for each JobKeeper fortnight (30 March to 12 April and 13 April to 26 April)
    6. If your business does not have any employees, but does have business participants, enter as “0” here
    7. Are you intending to register as an eligible business participant?
      1. Yes/No
    8. Answer to the following questions:
      1. Does the employing entity’s business participant meet all of the following (Only one YES/NO to cover all below questions):
        1. Relevant individual engaged in the entity’s business
        2. Relevant individual aged 16 or over (18 or over if a beneficiary)
        3. Held an ABN on 12 March 2020
        4. Had assessable income in 2018-2019 income year and provided notice to the Commissioner on or before 12 March (income tax return) 2020 OR made a supply in 1 July to 12 March 2020 and provided notice to the Commissioner on or before 12 March 2020 (BAS)
        5. You are an Australian resident (section 7 of Social Security Act) or resident for income tax purposes and was holder of a special category (Subclass 444) visa
        6. You are not an employee (other than a casual employee) of another entity
    9. Contact and Bank Details
      1. The employing entity’s financial institution details and contact details for payment
        1. Account Name
        2. Account BSB
        3. Account number
      2. Tick check box for account details and confirmed correct

Step 2 does not need to be completed at this point but refer to the information below as businesses that utilise STP will need to adjust their payroll systems immediately (prior to the end of April 2020)

ATO reference: https://www.ato.gov.au/general/jobkeeper-payment/In-detail/JobKeeper-guide---employers-reporting-through-STP/

 

STEP 2 IDENTIFY AND MAINTAIN YOUR ELIGIBLE EMPLOYEES (IMMEDIATELY CRITICIAL FOR STP)

If you are an employer and will enrol for the JobKeeper program from today you will need to read this information and follow the steps precisely.  The steps to follow to process payroll for employees are critical in terms of seeking reimbursement from the Australian Government for the JobKeeper payment. The bulk of identification and maintenance of employees for the purposes of the JobKeeper program will be performed through STP.

If you are an employee, the information contained below is of equal importance.  If you receive a payslip that doesn’t comply with the disclosures below, you will need to notify your employer to amend prior to the 8th of May 2020 to ensure they receive reimbursement of the JobKeeper payment.

Once enrolled in the JobKeeper program the next step is to apply for payment (from 4th May onwards) through a combination of STP (automatic) and manual payroll uploads.  As part of that process, one of the things you will need to report to the ATO are the payments made to employees.  You CANNOT receive the JobKeeper payment where you have not paid each eligible employee as a minimum $1,500 per fortnight in the month of April.

For eligibility for the first two JobKeeper fortnight payments, and given the timelines of release of the JobKeeper rules, the ATO have allowed that the equivalent of $1,500 (gross) per employee per fortnight must be paid to the employee prior to the 8th of May.

Note that the payment rules are stricter for the 3rd and 4th JobKeeper fortnight in May in terms of timing of payment

The changes required in the STP systems steps DO NOT apply to employees earning more than $1,500 per fortnight (gross) for each of the JobKeeper fortnights.  For these employees, continue to pay and process through your payroll system as per normal.

Where an employee effectively receives a payrise through the JobKeeper program in either of the JobKeeper fortnights (that is they do not normally earn $1,500 per fortnight) the payroll process below must be followed to ensure reimbursement of the JobKeeper funds for those employees

Note that these employees can include:

  • any part time or full time eligible employee who does not normally earn more than $1,500 per fortnight
  • any eligible casual employee who does not earn on average more than $1,500 per fortnight
  • any eligible employee who has been stood down regardless of what their previous earning amount were

Most payroll providers have updated their software to allow for the JobKeeper program.  For instructions:

  • For MYOB AccountRight, see here
  • For QuickBooks, see here
  • For Xero, see here

For other payroll provider please contact them or refer to their website.

For entities still manually recording payroll (such as closely held entities), you can disclose the relevant payments manually to the ATO after the 4th May 2020.

Please note that the JobKeeper program requires you to separately identify things such as:

  • JobKeeper top ups (where an employee receives a payrise because of the JobKeeper payment); and
  • JobKeeper fortnights

Not doing this will affect your ability to claim the JobKeeper Payment.

Under the second step of the process (the payment of the JobKeeper payment from the government), the information will be provided to the ATO as follows:

(Extract from https://www.ato.gov.au/general/jobkeeper-payment/employers/enrol-for-the-jobkeeper-payment/#ApplyfortheJobKeeperpaymentearlyMay2020)

Step 2: Identify and maintain your eligible employees

  • You or your registered tax or BAS agent can identify each eligible employee that you will claim the JobKeeper Payment for and maintain their details each month.
  • If you have STP enabled payroll software, you can identify your employees in one of the following ways:
    • Directly into your STP enabled payroll software if it is updated with JobKeeper functionality.
    • In the Business Portal if your STP payroll software is not updated with JobKeeper functionality
      • If you have 200 employees or less, log in to the Business Portal and select employee details that are prefilled from your STP pay reports.
      • If you have more than 200 employees, you can manually create a pay report, ask the ATO for a prefilled JobKeeper report, or create your own report using JobKeeper Payment Guide file specification (to be released).

 If you don't have STP enabled payroll software, you can identify your employees in one of the following ways:

    • In the Business Portal
      • If you have 40 employees or less, manually enter your eligible employees' details
      • If you have more than 40 employees, you can use the JobKeeper Payment Guide file specification (to be released) to produce your own JobKeeper report and provide it back to us by uploading it using the Business Portal Transfer file functionality, or consider moving to an STP enabled payroll solution.

 

FAQs

  1. Does the decline in turnover test need to be satisfied just once or continually?
    1. The test only needs to be satisfied once but you will need to report continually to the ATO about business performance.
  2.  The turnover test mentions GST turnover. Is this accruals or cash?
    1. If you use the cash basis to normally report GST turnover on your BAS, you can use the cash basis for comparing income or projected income in determining whether you satisfy the turnover reduction test. Alternatively if you use the cash basis in reporting your normal GST obligations, it is still open to you to use accruals for the purposes of the JobKeeper program. However, entities that normally use the accruals method to report on their BAS must use the accruals method for the purposes of the JobKeeper program.
  3. I normally report GST quarterly. Do I need to use the projected quarterly comparison option for measuring the turnover reduction test or can I use the monthly comparison?
    1. You can use any of the stated comparison periods (monthly or quarterly) allowed regardless of the tax periods you normally report under.
  4. If I am eligible as an employer do I need to nominate all eligible employees?
    1. The rules do not state this specifically but the Explanatory Statement includes a specific reference to “one in, all in”. There is some commentary in the marketplace that about the uncertainty of this interpretation. We would recommend that you follow the “one in, all in” stance.
  5. Long term Casuals -what does regular and systematic basis mean?
    1. The ATO have adopted the definition of regular and systematic contained in the Fair Work Act. Some commentators have stated that to be eligible, casuals need to have had regular and recurring shifts (on an almost permanent part time basis). We believe that the definition of “regular and systematic” refers to the premise that casual staff had a “reasonable expectation of ongoing work”.  This is a little more subjective and does allow potentially more casual staff to be eligible
  6. Do I need to pay superannuation on the JobKeeper Payment?
    1. Superannuation is only levied on those amounts normally paid to staff in the process of performing their duties. If a staff member receives an uplift because of the JobKeeper, superannuation does not need to be paid on the uplift amount (see the references to STP changes to deal with this).  If the employee has been stood down, superannuation is not payable on any of the JobKeeper payment (the employer can elect to pay it if they wish)
  7. Is the JobKeeper payment included in the calculation for payroll tax and workcover liabilities?
    1. The Victorian Government have not yet stated whether this will be the case but some other states have indicated it will not be included.
  8. I’m an eligible business participant (self employed), not an employee. Do I need to pay myself $1,500 per fortnight to be eligible for the JobKeeper payment?
    1. No you do not.
  9. I can’t afford to pay my employees to be eligible for the JobKeeper program. What can I do?
    1. You can approach your bank once you are enrolled this week and they may be able to assist. Alternatively some employers are considering requesting employees “loan back” the employer their fortnightly pay.  There are legal and employment law considerations around this so tread carefully

 

LBW Business + Wealth Advisors have dedicated staff to attend to:

  • the enrolment of your business in the JobKeeper program
  • advice in relation to STP and changes required to some employees payroll entries
  • Application for payment where STP pay systems are not utilised

Please contact your LBW representative to get assistance in any steps or processes relating to JobKeeper, or for general advice about eligibility of employers and employees