JobKeeper Payments Explained

On 30 March 2020 the Federal Government announced the JobKeeper program that is expected to be available to six million Australian workers. It is a further step in supporting the economy and the workforce through the crisis which remains a moving target.

What is the JobKeeper Payment?

  • This is a wage subsidy available to workers of businesses, not for profit organisations and self-employed individuals whose turnover has fallen by 30 percent or more.
  • Businesses with turnover greater than $1 billion would need to have a turnover reduction of at least 50% for their workers to qualify.
  • The payment is a flat rate of $1500 per fortnight per eligible employee and is available to full-time, part-time and casual workers with more than 12 months regular service.

Who is eligible?

  • Other eligibility requirements:
    • currently employed by the eligible employer; or
    • were employed by the eligible employer as at 1 March 2020 but have since been retrenched and then are re-hired;
    • are at least 16 years old;
    • not receiving JobKeeper payments from another employer;
    • are an Australian citizen / permanent resident, or holder of certain visa types.

How does the JobKeeper Payment work?

  • The fortnightly $1500 payment will be made to employers (or former employers in some instances) for on-payment to the employees.
  • Employers have discretion to pay over an above this amount however, this amount applies both for employees who earn more than this amount, and for those who don’t.
  • The payment will be administered by the ATO and is likely to be aligned with the business BAS/IAS cycles.
  • Payments will commence in early May, Backdated to March. The ATO will make the payments fortnightly.
  • The JobKeeper payment is taxable income for the employee.
  • The employer is not required to make superannuation contributions in respect of the subsidy it receives. However, it must continue to make superannuation contributions on any wages the employee is entitled to under the employment agreement or award for the work that they do.

How does an employer make a claim?

  1. Register their interest in the JobKeeper Payment on the ATO website in order to receive relevant updates.
  2. Provide information on eligible employees to the ATO (this will be assisted by pre-population of single touch payroll).
  3. Once the payments start:
    1. Ensure all eligible employees receive at least $1500 per fortnight before tax, even if their previous income was less than this amount.
    2. Notify eligible employees that they are receiving the subsidy
    3. Continue to provide the ATO with relevant information monthly, including the number of eligible employees employed by their business.

Where can I find out more?

Click on the icons below to access key information from the, Australian Taxation Office and the Australian Treasury.

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