JobKeeper Employer Payments

On Wednesday 8 April 2020 the Federal Government passed legislation for a framework around the JobKeeper wage subsidy scheme. On Thursday 9 April 2020 the Federal Treasurer authorised the Rules for the scheme, leaving some parts still to be advised by the Australian Taxation Office (ATO). On Tuesday 14 April 2020 the ATO released guidance around the Rules and advised that they will continue to issue further guidance as soon as they can.

1. In Brief

The JobKeeper payment is available to eligible employers to enable them to pay their eligible employees at least $1,500 before tax per fortnight effective from 30 March 2020 to 27 September (being 26 weeks). The first payments to the employer will be made during the first week of May (backdated to 30 March) and then continue to be paid monthly in arrears. Some self-employed workers are also eligible.

Employers need to enrol and apply for the JobKeeper Payment if they wish to participate in the scheme. Employers need to pay their eligible employees a minimum of $1,500 (before tax) each fortnight to claim the JobKeeper payment. If an employer does not continue to pay their employees for each fortnightly pay period, they will cease to qualify for the JobKeeper payment in respect of those employees.

The basic eligibility for an employer is that it has (or likely will) suffer a decline in turnover during any month of March 2020 to September 2020 compared to the same month of the previous year by at least:

  • 30% (for an “aggregated” annual turnover of $1 billion or less);
  • 50% (for an “aggregated” annual turnover of more than $1 billion); or
  • 15% (for ACNC registered charities other than universities and schools).

Aggregated turnover is that of the employer entity and of all entities connected or affiliated with the employer, both based in Australia and outside of Australia. The aggregated turnover is relevant only to determine which percentage above to apply to the decline in turnover. The decline in turnover test is then applied to the employer entity only.

Eligible employees are those who:

  • Remain employed by the Eligible Employer (including those stood down or re-hired);
  • Were employed by the employer as at 1 March 2020;
  • Are permanent full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
  • Are at least 16 years of age;
  • Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder;
  • Are not receiving a Job Keeper Payment from another employer; and
  • Have been nominated by the employer and the employee has accepted that nomination in writing on the approved form.    

2.  Eligible Employers & Enrolment in the Scheme

Eligible employers must have carried on a business in Australia as at 1 March 2020 with at least one eligible employee as at 1 March 2020 and have continued to employ those eligible employees for fortnights from 30 March 2020 through to 27 September 2020.

Eligible employers must enrol for the JobKeeper payment scheme with the ATO from 20 April 2020 using an online form which also identifies the employer and the number of eligible employees. Note that a previous registration of interest on the ATO website is not an enrolment. Tax agents can also enrol on behalf of their clients. Enrolment is required by 30 April 2020 in order to qualify for the first payments due in May and is to be done using the Business Portal ( Enrolments after 30 April 2020 will only qualify for payments prospectively. Subsequently, from 4 May 2020, employers must provide to the ATO additional information about each of their eligible employees.

The eligible employer is the actual entity that is employing the staff. This is the entity that needs to enrol and pass the turnover test.

Some sole traders and other self-employed people (including through partnerships, trusts and companies) can also be eligible where they are actively engaged in their business but themselves are not employees. The catch is though that only one person per entity can be nominated. In some cases this can be an anomaly and the ATO will be providing more information about this soon.

Some employers are ineligible, this is generally limited to banks and government agencies.

3. The Turnover Test

The required reduction in turnover (either by the 30%; 50%; or 15% as applicable) only needs to be satisfied once during March 2020 to September 2020 and does not need to be re-tested each month. A quarter period can also be used for the test instead of a month, in that case it will be only for the quarters ended 30 June 2020 and 30 September 2020. Whether a month is used or a quarter, the test compares it to the corresponding period in the previous year.

Other than if the employer can meet the required reduction in turnover for March 2020 (so based on actual results), the employer entity is required to project its future turnover in order determine if it will meet the turnover test before the end of September 2020 in order to enrol in the JobKeeper scheme. In order for the employer to be eligible from the first fortnight commencing 30 March 2020, it will need to meet the required reduction in turnover  by comparing:

  • Turnover for March 2020 to March 2019;
  • Projected turnover for April 2020 with April 2019; or
  • Projected turnover for the quarter April 2020 to June 2020 with the quarter April 2019 to June 2019.   

Otherwise, the employer needs to wait until another month or quarter to meet the test and then enrol in the scheme, but in that case the JobKeeper payments will only be prospective from the date of enrolment and not backdated to 30 March 2020. Should the employer enrol in the scheme but end up not meeting the turnover test based on its actual monthly or quarterly results, it will need to repay the JobKeeper payments, with interest, unless the ATO applies a discretion. Note that reporting actual monthly turnover will be required to be provided to the ATO at the end of each month.

Turnover is the turnover of the employer entity itself, it does not take into account the turnover of other entities in a group. This can cause an anomaly where a group uses one entity to employ all of its staff, or where a service entity type arrangement exists. The ATO is expected to provide more information around this soon.

The Rules also allow the ATO to set an alternate to the Turnover Test where the employer entity has not been in business for a full year. Again, the ATO is expected to provide more information about this soon.

4. Eligible Employees    

Eligible employees were noted at 1. above. Note that entities that engage contractors are not included in the JobKeeper scheme as contractors are not employees.

Before an employer can enrol in the JobKeeper payment scheme, it must notify each eligible employee that the employer intends to nominate those employees. This is required to be on an ATO Form ( and the employee is then required to complete that form and give it back to the employer before 30 April 2020. The employer must retain the completed form as part of its tax records.

Employees as at 1 March 2020 that have been stood down without pay may still be eligible, as are those that have been terminated if they are re-hired.

5. Paying Eligible Employees

All eligible employees must be paid a minimum of $1,500 (before tax) per fortnight in order for the employer to receive the JobKeeper payment. The $1,500 minimum can be paid in the employer’s usual pay cycle through their existing payroll system, it does not need to match the JobKeeper fortnight from 30 March 2020 to 12 April 2020 and each following fortnight through to  27 September 2020. If the usual pay cycle is monthly, that is fine, employers just need to allocate the 26 fortnights of the minimum $1,500 on a reasonable basis. Income tax must be withheld by the employer when paying the employees.

If the current employees are being paid less than the $1,500 per fortnight, the employer must still pay the minimum $1,500 before tax. For the first two fortnights (30 March to 12 April and 13 April to 26 April), if the employer has not paid the $1,500 minimum, it must do so before 30 April 2020. This could be the case because an employee has been stood down, needs to be re-hired, was working less than their usual week, or otherwise their usual pay is less than $1,500 per fortnight.

With the employer compulsory superannuation, the intention is that if the employer needs to top up wages to an employee to get to the minimum of $1,500 per fortnight, that top up payment is not subject to the superannuation guarantee.

6. ATO Payment of the JobKeeper Amounts

The ATO will pay the employer entity for each eligible employee monthly in arrears, with the payments commencing in the first week of May 2020. An employer will usually get $3,000 per month per eligible employee for the two fortnightly periods in the preceding month, other than for September which will be $4,500 due to three fortnightly periods in August.

7. Recap on Important Dates

  • Employers to assess whether or not they will meet / likely meet the decline in turnover test (this can be done now).   
  • Eligible Employers to advise their Eligible Employees of their nomination (this can be done now on the approved form).
  • Eligible Employer enrolment in the JobKeeper scheme from 20 April and by 30 April 2020.
  • Eligible Employees to complete the nomination notice and give it back to their employer by 30 April 2020.
  • Eligible Employers to pay all Eligible Employees that have not received the minimum $1,500 per fortnight since 30 March the difference by 30 April 2020.
  • Eligible Employers need to provide more detailed information to the ATO about each eligible employee from 4 May 2020.

Eligible Employers will need to provide actual monthly turnover data and projected next month’s turnover to the ATO at the conclusion of each month.

8. Contact us for Help

While we are working closely with our clients on the JobKeeper scheme and other government assistance packages, please don’t hesitate to contact your usual UHY Haines Norton partner or manager if you have any questions.

The material contained in this newsletter is in the nature of general comment and information only and neither purports, nor is intended, to be advice on any particular matter. Readers should not act or rely upon any matter or information contained in or implied by this newsletter without taking appropriate professional advice.