“If you do not actually make payment of at least $1,500 (pre tax) to your eligible employees in a designated fortnight, you the employer will not get the Jobkeeper Payment”
Employers and their employees must meet a number of conditions to be eligible to receive JobKeeper payments. You can check the list here https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_2.pdf or refer to our previous bog https://www.bloomaccounting.com.au/jobkeeper-payment-helping-you-cover-the-cost-of-employee-wages/
There is a particular condition we would like to bring to your attention and that is the “Wage Condition”. Pay periods for the purposes of the JobKeeper Payment are in fortnights and the first fortnight of the scheme commenced on Monday 30 March 2020 and ended on Sunday 12 April 2020. The final fortnight of the scheme will start on Monday 14 September 2020 and will end on Sunday 27 September 2020. The JobKeeper payments to employers by the Tax Office will be made in arrears monthly i.e. after two fortnight periods which will mean that employers will need to self-fund the $1,500 fortnightly payments ($3,000 per eligible employee/month) in the first instance and then will be reimbursed if the employer has met the required conditions. To meet the Wage condition YOU MUST HAVE PAID AT LEAST $1,500 PER ELIGIBLE EMPLOYEE BY THE LAST DAY OF THE FORTNIGHT. The following all count towards the $1,500:
PLEASE NOTE: Superannuation Guarantee payments i.e. 9.5% employer contributions are not counted towards the $1,500 wage requirement condition
If you do not actually make payment of at least $1,500 (pre tax) to your eligible employees in a designated fortnight, you the employer will not get the JobKeeper Payment. What the above means is that you should have paid the qualifying $1,500 for the fortnight ending 12 April already and the current fortnight will need to be paid by the 26th April. The ATO have thankfully recognised the burden this would put on employers who may have stood down staff during April. For the first two fortnights (30 March – 12 April, 13 April – 26 April) they will accept that the minimum $1,500 payment for each fortnight has been paid (even if it has been paid late), provided it is paid by the end of April. This means that you can make a combined payment of at least $3,000 per eligible before the end of April and you will satisfy the wage condition. Please be aware that for all fortnights starting 27 April you must pay $1,500 in the fortnight to get the JobKeeper payment.
What if you pay your employees monthly? There is an accepted exception – if you normally pay your employees in a period that is longer than a fortnight, those payments are to be allocated to a fortnight or fortnights in a reasonable manner. Therefore if your normal pay period is four weeks or a month and a payment in respect of the fortnight is paid later, providing the monthly payment is equivalent to the fortnightly $1,500 requirement you will still meet the wage condition.
Employers must have registered for the JobKeeper Payments before 26 April 2020 to be eligible for the first two fortnights pay periods. Enrollment forms are not available yet but please watch this space. We have been told that tax agents will be able to complete enrollments from 20 April. If you need assistance in enrolling please contact us.