Paying Employees and Accessing the JobKeeper
The JobKeeper Wage Subsidy has raised many questions from business owners and employees alike. In particular, we have had many enquiries from employers on the eligibility criteria and how to pay employees during the downturn in trade.
Unfortunately there is still some uncertainty until the legislation is released, however, we now have some guidance from Government Treasury which provides some answers to common questions, in particular how to process the payroll from 30 March 2020.
Along with the 30% decline in turnover requirement, to qualify for JobKeeper for the “first period” fortnight 30 March 2020 to 12 April 2020 for an employee, gross wages payments totaling at least $1,500 must be made to an employee during that period.
As mentioned, legislation is still to be formalised and passed through Parliament so this is based solely on the Treasury information and commentary from our professional associations. There should be much greater certainty on payment requirements to access JobKeeper once the legislation is enacted.
Below are some important answers from the Treasury FAQ Fact Sheet (link to all FAQ's also provided):
Q. What are the eligible payment periods for reimbursement for a JobKeeper Subsidy?
A. Employers will need to satisfy payment requirements for their eligible employees in respect of each 14 day period covered by the scheme. The first period starts on Monday 30 March 2020 and ends on Sunday 12 April 2020. The payment requirement is that they pay their eligible employees a minimum of $1,500 per fortnight in the scheme payment periods.
Where an employer pays their staff monthly, the ATO will be able to reallocate payments between periods. However, overall an employee must have received the equivalent of $1,500 per fortnight. The final period will start on Monday 14 September 2020 and end on Sunday 27 September 2020.
Q. What If I have stood down my employees after 1 March 2020, and are no longer paying them, do I need to pay them, for what period and by when?
A. Yes. You can claim JobKeeper for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them a minimum of $1,500 per fortnight (before tax) for the payment periods of the JobKeeper Scheme. The first payment period under the scheme is from 30 March 2020 to 12 April 2020.
Where an employer pays their staff monthly, the monthly payment must be equivalent to the required fortnightly payment. For all following payment periods you will need to continue to pay your employees a minimum of $1,500 per fortnight (before tax), before the end of the payment period.
If you have further questions about the JobKeeper package, you might find this recent release from the Government helpful.
JobKeeper - FAQ Fact Sheet
As per our previous, newsletter, if you are an employer looking to take advantage of the JobKeeper subsidy, and haven't already done so, we strongly recommend you register your interest on the ATO website at the link below:
Click here to register your interest with the ATO for Job Keeper payment
We will continue to provide updates on the stimulus packages and other COVID-19 related financial and business operational issues, as they become available. As always, we are here to help and are happy to address any queries or concerns you have in relation to your particular business or situation.
John and the Transcend Accounting Team