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JobKeeper payment scheme: what you need to do and required deadlines

Everything you need to know about new tax incentives for early stage investors

The JobKeeper payment scheme has been introduced for eligible businesses to pay their employee’s salary or wages of at least $1500 (pre-tax) per fortnight. These payments begin as reimbursements from the first week of May 2020.

We recognise the JobKeeper payment scheme is by far the largest form of support offered by the government to businesses affected by COVID-19. While the payments will assist with the running of your business, there is an obligation to attend to the administrative requirements in order to access the scheme.

To be eligible for the JobKeeper scheme, employers and their employees must meet a range of criteria. In addition, there are various steps that need to be completed in a particular order, as well as by respective due dates.

Below we have provided a summary of the process. We have identified the step, when it has to be done by, and who is best placed to complete it.

JobKeeper payment scheme process:

Step      Where/how? Deadline                Who actions it?
Register interest, subscribe for JobKeeper updates ATO website N/A Business owner or LDB
Check your business meets eligibility criteria Turnover test May 31 Business owner or LDB
Check your employees meet eligibility criteria Individually May 31 Business owner or LDB
Notify your eligible employees you intend to claim the JobKeeper payment on their behalf Individually May 31 Business owner
Send the JobKeeper Employee Nomination Notice to your eligible employees. Keep on file, provide copy to LDB ATO Website May 31 Business owner
Continue to pay eligible employees at least $1500 per fortnight for the month of April Payroll system May 8 Business owner
Enrol for JobKeeper program, which includes providing bank details, specifying the number of eligible employees for the first and second fortnights Business portal or LDB tax agent portal May 31 Business owner or LDB
Apply for the JobKeeper payment by identifying the eligible employees either via prefilled STP data, or manually entering their details Business portal or LDB tax agent portal From May 4 Business owner or LDB
Confirm each month nominated employees have not changed as well as provide current and projected turnover information, via the monthly JobKeeper Declaration Form Business portal or LDB tax agent portal Monthly Business owner or LDB

How LDB can support you

We will work with all of our clients to ensure that the necessary processes are adhered to, by their due dates. We will liaise with you to coordinate what assistance you require from us. We see ourselves as part of your team, and want this to run as efficiently as possible for your business.

As this is a large project, we ask you to:

  • Correspond with your LDB adviser for any clarification of the process;
  • Tell us which part of the process you are handling yourself, and what you would like us to assist with;
  • Arrange a time with your LDB contact that is convenient for all to run through the process, if you need detailed LDB support;
  • Avoid leaving tasks to the last minute. As the ATO has imposed a short time frame, particularly for April, try to complete required tasks as early as possible. For example, the JobKeeper Employee Nomination Notice can be sent to eligible employees immediately.

We have committed all resources to assist our clients with the process.

We have chosen not to propose a one-off or upfront fee for this service, and will invoice for our time at our usual fee for service charge out rates. This is to capture the fact you are required to be involved in the process. If you require an estimate of fees for completion, please discuss this with your LDB adviser at the initial stages.

Frequently asked questions

Who is eligible?
The eligibility criteria applies firstly to employers, who must show they have been impacted by COVID-19.  They do this by passing a reduction in turnover test, which for most LDB clients is 30 per cent, against a comparable prior year period.

When will the JobKeeper payment commence?
The JobKeeper payment will be available for employees employed from March 30, 2020. If a business cannot establish eligibility from that date, they still have opportunities to access the program at a later date should they then satisfy the eligibility criteria.

How long will the JobKeeper payment last for?
The JobKeeper payment will be available for the period until September 27, 2020.

When will I receive the first payment?
The first payments by the ATO will be received by employers from the first week of May.

To access this program from the very start, what turnover periods am I comparing?
To be eligible from the earliest point, the comparable periods are:

  • March 2020 (actual) v March 2019 (actual)
  • April 2020 (projected) v April 2019 (actual)
  • June quarter 2020 (projected) v June quarter 2019 (actual)

How often will these payments be made?
The payments will be made by the ATO monthly in arrears. That is, you would have to pay your eligible employees the minimum of $1500 per fortnight, and then will be reimbursed at the beginning of the following month by the ATO.

So, I don’t get the JobKeeper payment first and then use that to pay employees?
Correct. You have to pay first and are reimbursed by the ATO later. For some businesses this may present a funding gap.

Do I need to change my pay cycle to align with the ATO fortnightly pay periods? 
No, you don’t. However, the requirement is your employees have been paid the equivalent of $1500 per fortnight.

Once my eligibility has been confirmed, do I need to pass the eligibility test each month? 
No. The decline in turnover test only needs to be satisfied once. The business will remain in the program for the rest of the period. It is not tested again, even if it would not have been met in later periods. However, the ATO has indicated they will want monthly updates of business performance.

Are the self-employed eligible for the payment? What about partners in a partnership, adult beneficiaries of a trust, or directors of a company? 
Yes. People in these categories will be eligible for the payment, provided at the time of applying they satisfy certain eligibility criteria. These people are identified as business participants, and only one business participant per entity can be nominated.

What about the sole trader who also has employees?
Yes, they can receive JobKeeper payments for their employees and themselves.

Are the JobKeeper payments taxable income?
Yes. The payments are taxable income for the employer that receives the subsidy, and for the employees who subsequently receive the amount.

Can an employee receive the JobKeeper payment from more than one employer? 
No. Only one registration per employer. This is why the JobKeeper Employee Nomination Notice form needs to be signed and received from each eligible employee.

Can an employer select which of their eligible employees are covered by the JobKeeper scheme? 
No. Once an employer decides to participate in the JobKeeper scheme, then all of their eligible employees who have agreed to be nominated for the scheme will be participants. It is effectively a “one in, all in” approach.

Are employers obligated to pay superannuation guarantee on any additional payments? 
Employers are only obligated to pay superannuation based on the employee’s actual employment. If the JobKeeper payment provides a top-up to their ordinary pay, employers do not have to pay superannuation guarantee on this additional amount. This will often occur when employees are employed part-time.

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