See below video blog for the latest update on the Job Keeper payments for eligible Employers and Employees:
As per the video blog, there were some points not discussed in the summary. These have been detailed below as well as what had already been noted:
The main takeaway from the update was that you (Employer) can pay your employees $1,500 per fortnight safely now the legislation is in place.
What you must remember when making this payment?
- Deduct tax from the payment to your employees as per normal tax rates. No Superannuation is payable on this.
- Pay the minimum $1,500 before tax to each eligible employee each fortnight (starting with the fortnight 30 March – 12 April) to claim the JobKeeper payment for that fortnight.
- Continue to pay employees they are claiming for either every subsequent fortnight until 27 September 2020 until their employees stop being eligible or you opts out.
IMPORTANT: For the first two fortnights (30 March – 12 April and 13 April – 26 April), the ATO will accept the minimum $1,500 payment before tax has been paid for each fortnight even if it has been paid late, provided it is paid by the end of April. This means that you can make two fortnightly payments of at least $1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April.
Other important notes regarding the JobKeeper claim:
- If your eligible employees earn less than $1,500 per fortnight before tax, you must pay them $1,500 per for each fortnight to claim the JobKeeper payment. This ‘top up’ of their salary or wages will ensure they remain eligible.
- You cannot pay your employees less than $1,500 before tax per fortnight and keep the difference.
- You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 before tax per fortnight.
- If your eligible employees earn more than $1,500 per fortnight, you will only receive $1,500 for each eligible employee and you will pay any additional balance yourself.
- You cannot claim the reimbursement for the JobKeeper payment for employees who were not paid the full amount during each JobKeeper payment period.
Knowing who and how to pay:
- If an employee has been stood down after 1 March, and you re-engage them, you must pay their eligible employee at least $1,500 per fortnight before tax. You will only be eligible to claim for the fortnights after you have re-engaged their employee within the pay period.
- If an employee was employed on 1 March 2020, subsequently ceased employment with you and has since been re-engaged by you, the employee must receive, at a minimum, $1,500 per fortnight, before tax.
- If your ordinary arrangement is to pay its employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if an employer’s ordinary arrangement is to pay an employee every four weeks, it will be reasonable if the employee is paid at least $3,000 for every four-week period.
How does it work for you as the Employer?
- The JobKeeper payment is a reimbursement from the ATO to your client and cannot be paid in advance.
- All JobKeeper payments are assessable income of the business that is eligible to receive the payments. The normal rules for deductibility apply in respect of the amounts a business pays to its employees where those amounts are subsidised by the JobKeeper payment.
- The JobKeeper payment is not subject to GST.
- New rules are being introduced by the government with the intention to not require super guarantee to be paid on additional payments that are made to employees as a result of JobKeeper payments.
We understand that this is a lot of information to digest and so if you have any questions, please do not hesitate to email me firstname.lastname@example.org. Alternatively, there is more information here; www.ato.gov.au/jobkeeper
Stay safe and keep well!