JobMaker credit - Info for business owners

JobMaker – The information you need

November 5, 2020 / BY / IN Accounting, Business, Covid-19

With the JobMaker scheme passing Parliament on 11 November 2020, there are a number of key factors in the Government’s latest subsidy that employers should become familiar with. The information below is provided with thanks to the team at Knowledge Shop.

What is JobMaker?

JobMaker is a credit available to eligible businesses for hiring additional employees between 7 October 2020 and 6 October 2021. It is an incentive for businesses to hire additional staff and is not applicable if you are simply replacing an employee who has left.

The credit provides $200 per week for new employees aged between 16 – 29 years, and $100 per week for new employees aged 30 – 35. The credit is not passed onto the employee but is an incentive for the employer to support wage costs, and it will be claimed quarterly in arrears by the employer from the ATO from 1 February 2021.

Eligibility

The table below outlines the eligibility requirements for JobMaker.

Employer eligibility
  • Has an ABN
  • Up to date with tax lodgements
  • Registered for PAYG
  • Reporting through single touch payroll
  • Keeps adequate records of the paid hours worked by the employee they are claiming the credit for
  • Another employer is not claiming JobMaker for the same employee
Employee eligibility
  • Received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one month within the three months before they were hired
  • Between 16 and 35 years of age at the time their employment started
  • Worked at least 20 hours per week on average for the full weeks employed for the period being claimed. If the employee worked less than 20 hours, the employer cannot claim JobMaker for them during that period
  • Started work between 7 October 2020 and 6 October 2021
  • The first year of employment with the employer
  • The employer is not receiving other forms of assistance from the Commonwealth Government for the employee, for example JobKeeper or an apprenticeship subsidy
Additional employee test (additionality test) The employer’s:

  • Total employee headcount on the last day of the reporting period increased by at least one additional employee compared initially to 30 September 2020, then to the previous reporting period.
  • Total payroll for the reporting period increased compared initially to the September quarter 2020 (July, August, September 2020), then to the previous reporting period. The hiring credit cannot exceed the increase in payroll.

What happens if an employee resigns?

Businesses can only receive JobMaker for their eligible employees if the total employee headcount and payroll increases. If an original staff member resigns, leaving you with the same headcount you had at the beginning of the measurement period, you won’t be eligible for the JobMaker credit. Similarly, if your payroll remains the same or only marginally increased (for example, due to a reduction in hours worked by original employees to accommodate the additional employees), then you would only be eligible for the JobMaker credit on the additional payroll amount. The JobMaker credit cannot exceed the increase in payroll.

Each month, employers will need to ensure they pass these additionality tests before claiming.

Your headcount and payroll increase is measured on the last day of each reporting period from the date your first new employee started. For example, if your first new employee joined in October 2020, your baseline is set at that point. If a new employee starts in January 2021, your baseline is measured from the last reporting period – i.e. December 2020 for headcount and the December quarter for payroll.

It’s important to remember that the JobMaker credit and rules could change as the legislation is finalised. Please contact your Client Manager or our office if you would like further information.

 

TJL Accountants & Advisors