Wage Stimulus – Understanding the JobKeeper Payments
We understand that these are difficult times and many of your businesses are facing unexpected pressure.
We are doing our best to be proactive and keep you up to date with the relief offered by the government in response to Covd-19. Below we have summarised the latest updates from the government, these include:
- JobKeeper Payments
- Western Australian Government stimulus for Small Businesses
Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
Where employers participate in the scheme, their employees will receive this payment as follows:
- If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
- If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax. If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
Payments will be made to the employer monthly in arrears by the ATO
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.
Employers (including non-for-profits) will be eligible for the subsidy if: their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and the business is not subject to the Major Bank Levy.
- SELF-EMPLOYEDMelissa is a sole trader running a florist. She does not have employees. Melissa’s business has been in operation for several years. The economic downturn due to the Coronavirus has adversely affected Melissa’s business, and she expects that her business turnover will fall by more than 30 per cent compared to a typical month in 2019. Melissa will be able to apply for the JobKeeper Payment and would receive $1,500 per fortnight before tax, paid on a monthly basis.
- WORKER WITH MULTIPLE JOBSMichelle currently works two permanent part-time jobs, at an art gallery during weekdays, and at the local café on the weekend. Due to the impact of the Coronavirus, the gallery has closed and Michelle has been stood down without pay under the Fair Work Act. Michelle continues to work at the café delivering take-away orders. Michelle can only receive the JobKeeper Payment once, from the employer from whom she nominates as her primary employer.As Michelle only claims the tax-free threshold from her job at the art gallery, this will be treated as her nomination of the art gallery as her primary employer. The art gallery is eligible for the JobKeeper Payment. The art gallery will pass the JobKeeper Payment on to Michelle, so she will receive $1,500 per fortnight before tax. During the application process, the art gallery will notify the ATO that Michelle receives the payment from them. The art gallery is also required to advise Michelle that she has been nominated to the ATO as an eligible employee to receive the payment.The café is not eligible to receive the JobKeeper Payment for Michelle. The income that Michelle receives from her job at the café does not change her entitlement to the JobKeeper Payment she receives from the art gallery.
- EMPLOYEE MADE REDUNDANT AFTER MARCH 1Miles worked as a permanent part-time personal trainer at a gym for six months and was made redundant on 20 March 2020 in response to the Government directive that gyms close. Miles was not entitled to redundancy pay due to his length of service. In response to the announcement of the JobKeeper Payment, the gym decides they want to re-engage Miles so they are well placed to resume their operations once the Coronavirus restrictions are lifted.After being made redundant, Miles had registered an intent to claim with Services Australia for access to the JobSeeker Payment and the Coronavirus Supplement. Miles is single, with no children and in total, he would be eligible to receive $1,124.50 before tax per fortnight. If Miles chooses to be re-hired by the gym, under the JobKeeper Payment he will receive $1,500 a fortnight before tax while he is stood down. Miles will need to advise Services Australia of his income.He is no longer eligible for the JobSeeker Payment and the Coronavirus Supplement from Services Australia as a result of receiving the JobKeeper Payment.
- EMPLOYER WITH 5 EMPLOYEES WHO ALL CURRENTLY GET PAID MORE THAN $1,500 PER FORTNIGHTSara runs a landscaping company, and employs five full-time gardeners. Sara is paying her employees $1,700 per fortnight before tax. She expects that her turnover will decline by more than 30 per cent over the coming months and that she will either need to lay staff off, or reduce their wages significantly. As a result of the JobKeeper Payment, Sara will be able to keep employing every gardener, and only needs to pay the $200 wage cost per fortnight before tax per employee above the $1,500 per fortnight (before tax) JobKeeper Payment.
The Western Australian Government has announced measures to support small business during the coronavirus (COVID-19) pandemic.
The small business relief includes:
- $17,500 grants for small businesses with a payroll between $1 million and $4 million.
- The $1 million payroll tax threshold (announced in October 2019) will be brought forward by six months to 1 July 2020.
- The WA Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for six months.
As well as the following measures announced on 31 March 2020:
- One-off $2,500 credit on electricity bills for small businesses that consume less than 50MWh per annum.
- Power and water disconnections will not occur and interest will not be charged on deferred payments until 30 September for small businesses facing financial difficulty due to COVID-19.
- Payroll tax will be waived for four months for businesses with annual wages under $7.5 million (NB: this replaces the previous payroll deferral measure which was announced). Affected businesses can apply for interest free payment arrangements and for late payment penalties to be waved for a range of taxes and duties, including payroll tax, transfer duty, landholder duty, vehicle licence duty or land tax.
A range of business licence fees have been waived, including liquor licence renewal fees for 2020, which will be waived and refunds given to businesses that have already paid.
Payroll Grant payment (Updated 30th March)
Grants of $17,500 will automatically be paid by cheque to eligible businesses from July, however you should log in to Revenue Online to ensure your postal address is up to date. There may be delays for those whose tax status changed in 2018-19 or liability for payroll tax changed in 2018-19 or 2019-20.
Rent relief for WA Government commercial tenants (announced 30 March)
The WA Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for six months to help these lease holders respond to the impacts of COVID-19.
The plan will benefit businesses such as convenience stores in train stations, cafés in government buildings, and restaurants in tourism precincts, such as Elizabeth Quay and Yagan Square. It will also benefit eligible small businesses leasing land from the State, such as caravan park and eco-tourism operators.