Matthews Steer answers frequently asked questions about the Australian Government's JobKeeper program.
How do I meet the decline in turnover test?
Businesses can compare the GST turnover for each calendar month from March 2020 to September 2020 to the same month(s) in the 2019 financial year OR compare the GST turnover for the June 2020 & September 2020 quarters for the same quarters in the 2019 financial year.
Therefore, to become eligible for the first JobKeeper payment (fortnight beginning 30 March 2020) business can compare either (irrespective of their BAS frequency):
Actual GST turnover for March 2020 with actual turnover March 2019 OR
Projected GST turnover for April 2020 to actual GST turnover for April 2019
Projected GST turnover for June 2020 quarter with actual GST turnover for June 2019 quarter.
Note that a business will only need to satisfy the decline in turnover test once.
What happens if my projected GST turnover doesn’t drop by 30% or my business did not operate in the 2019 financial year?
We are still waiting to hear more information from the ATO regarding this. However, the ATO has indicated that there will be tolerance for businesses who have projected a turnover drop in good faith. Alternatively, businesses can apply for the JobKeeper payments after it has met the decline turnover test. However, where this is the case your entitlement will not be backdated to 30 March 2020.
Where businesses didn’t operate in the 2019 financial year or the relevant comparable period did not represent the usual/average turnover the ATO does have the discretion to consider alternative tests / other information to assess eligibility.
Do I have to pay my employees first before I get any payment from the ATO?
Yes, the JobKeeper payment is made in arrears. To be eligible each participating employee must be paid at least $1,500 per fortnight. Remember that this payment is subject to ordinary PAYG withholding rules. You must withhold the relevant PAYG amount from employees’ wages and remit to the ATO through your BAS/ IAS.
Is there anyone other than an employee eligible for the JobKeeper payment?
Yes, as a business owner (sole trader), a partner of a partnership, an adult beneficiary of a trust or a shareholder / director of a company can be eligible if this individual is not an employee of the entity and for each fortnight he/she was actively engaged in the business carried through the entity. Note that there can only be one business participant per entity.
Does the business need to pay tax on these payments and do I have to pay superannuation for employees?
Yes, the JobKeeper payment is assessable for the business. However, wages/salaries paid to the employees will be considered as a tax deduction.
Yes, superannuation must be paid on payments made to employees to the extent these payments represents ordinary wages/ salaries. Hence where an employee’s ordinary wages are less than $1,500 per fortnight, superannuation needs only to be paid to the extent of their “normal” wages.
Should you require any further information or clarity on any of the measures please do not hesitate to contact the team at Matthews Steer on (03) 9325 6300.