COVID19 & the Impact on Business: Key Dates & What You Need to Know!

As the business world slowly navigates the “new normal” brought upon us by COVID19 there are many dates, lodgements, enrolments and ongoing requirements that are being bantered around.  It is not surprising that the prospect of seeking assistance for many is daunting and the road very bumpy and unknown.

To help remove some of the unknown, we have provided below a summary of the key information for those businesses who have found that they have suffered a downturn and can meet the eligibility requirements for the Jobkeeper payment.

Key Dates

  • 8th May – To receive the full Jobkeeper subsidy for eligible employees for the month of April 2020, all employees must have received the Gross Payment of $1,500 for the two fortnights which finished in April 2020 being 12th April and 26th April

  • 10th May 2020 – The first fortnight to complete for the Month of May whereby a payment of $1500 had to be received for each employee

  • 24th May 2020 – The Second fortnight for the Month of May to which a payment of $1,500 has to be received to qualify for Reimbursement for the month of May

  • 31st May 2020 – The last day a business can Enrol and identify their eligible employees and business participants to receive a reimbursement for the months of April and May 2020

  • Ongoing Monthly Reporting Declaration:  Upon enrolling to the Jobkeeper program there is a requirement following the end of each month to complete the monthly declaration requirement confirming the eligible employees and to provide turnover date.  The turnover date is based on the actual of the Month that has just passed and a projection of the month you are now in.  This must be done at the beginning of each month to allow the reimbursement of the preceding month’s subsidy.  It is recommended that this is done in the first week of each month.


    The importance of the Pay Date
    For many businesses, the key to paying an employee has always been the pay period i.e. the number of hours worked in a set timeframe to enable the payment of a regular wage.  The reimbursement for the Jobkeeper program however is very much focussed on the PAY DATE rather than the period to which the payment relates.  This therefore can create a timing headache for many employers whose normal pay cycles fall outside the set payment periods.  We have provided below the ATO’s summary of the relevant fortnights and the dates for which payments must be received.

ATO’s summary of the relevant fortnights and the dates for which payments must be received

ATO’s summary of the relevant fortnights and the dates for which payments must be received

A further query from many is where an employee is paid on a monthly or fortnightly cycle and how this impacts on the above payment dates.  The ATO guidance provides if you usually pay your employees monthly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a four-week pay cycle, your employees must have received at least $3,000 for every four-week period.  One area to be mindful of moving forward is the month of August where there will be 3 fortnights that will require an additional payment
 
Tax Consequences of the Jobkeeper Payment
It is important for employers and business participants to remember that the payments they are receiving are taxable to the business.  This is particularly important for business participants as the funds will become taxable income to their business entities not to the individual participant receiving the payment.

For employers, it is also important to note that the normal rules for deductibility apply in respect of the amounts your business pays to its employees where those amounts are subsidised by the JobKeeper payment. Additionally for all employers and business participants, the JobKeeper payment is not subject to GST.

Superannuation Guarantee and the Jobkeeper payment
One of the many questions we receive centres around an employer’s obligation to pay superannuation on the Jobkeeper payment.  The Australian Government is currently drafting legislation to confirm that the jobkeeper payment is not subject to Superannuation Guarantee.  However, where an employee has a combination of both hours worked and a Jobkeeper top up there will be an obligation for the employer to meet their obligation for superannuation on actual hours worked.

ATO Jobkeeper guide
The rules around the Jobkeeper Scheme, eligibility and ongoing obligations for employers is ever changing with both interpretation and legislative provisions.  To date there has been significant changes made to the original guidance provided.  We encourage all employers and business participants to ref to the ATO Jobkeeper guide for the most up to date.  The link to the guide is provided below:

https://www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-guides/

If any of the information provided above raises queries for you or we can provide support to your business as we all navigate the current changing conditions, please contact our office and discuss with one of our Accountants.

*pic courtesy of mdlaw.com.au

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