JobKeeper 2.0 Update

JobKeeper 2.0 has officially been passed and will operate from 28 September 2020 until 28 March 2021. There are two separate periods and eligibility needs to be tested for each period.

The extension periods are as follows:
•    Extension 1 – 28 September 2020 to 3 January 2021
•    Extension 2 – 4 January 2021 to 28 March 2021

Eligibility
To be eligible for JobKeeper under Extension 1 or Extension 2 a decline in turnover test (a 30% decline for most businesses or a 15% decline for most not for profits) must be satisfied as follows:

•    Extension 1 – you will need to show that:
– your actual GST turnover has declined in the September 2020 quarter compared to the
September 2019 quarter, and
– you must satisfy the original decline in turnover tests. This would already be satisfied if you are
currently enrolled for JobKeeper or if you satisfy the decline in turnover test for the quarter ended
30 September 2020.

•    Extension 2 – you will need to show that:
– your actual GST turnover has declined in the December 2020 quarter compared to the December
2019 quarter, and
– you must satisfy the original decline in turnover tests. This would already be satisfied if you are
currently enrolled for JobKeeper or if you satisfy the decline in turnover test for the quarter ended
30 September 2020.

To determine whether you have met the decline in turnover for the September 2020 and the December 2020 quarters you must use the same calculation method you use for GST purposes (i.e. cash or accruals). This generally means you compare the total sales at G1 on your BAS to the corresponding prior period. Except in limited circumstances, you cannot choose an alternative calculation method (cash or accruals) to that used on your BAS.

Payment rates
The rate of payment depends on the number of hours worked by an eligible employee or an eligible business participant actively engaged on the business and is split into two rates, Tier 1 and Tier 2.

The Tier 1 rate applies to:
•    eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1
March 2020 or 1 July 2020, and
•    eligible business participants who were actively engaged in the business for 80 hours or more during
the month of February 2020 and can provide a declaration to that effect.

The Tier 2 rate applies to all other eligible employees and eligible business participants.
The payment rates are as follows:

What to do next
•    Determine if your business has met the decline in turnover requirement to be eligible for Extension 1
•    If you are eligible, enrol for JobKeeper. Note that businesses already enrolled do not need
to re-enrol.
•    Work out eligible Tier 1 and Tier 2 employees and/or eligible business participants
•    Notify the ATO and eligible employees the payment rate applicable to them. Notification
to the ATO will form part of the monthly declaration lodged in November.
•    Ensure that the “wage condition” is met by paying eligible employees at least the applicable rate per
fortnight. Note that there is a transitional arrangement for the fortnights starting 28 September 2020
and 12 October 2020 that allows the wage condition to be met so long as payments are made by
31 October 2020. This provides business with time to determine their eligibility before making
payments to employees.

Further information can be found here: https://treasury.gov.au/coronavirus/jobkeeper/extension
If you have any questions please feel free to contact us.

Liam Drady

Associate - West Carr & Harvey

With over 10 years’ experience in accounting, including providing tax and business services to small to medium businesses and individuals, I offer my clients proactive communication and proven outcomes. This includes business structure advice, tax compliance, management and business growth.

My key areas of expertise include:
• Business and individual tax advice and compliance
• Structuring for tax effectiveness and asset protection
• Capital Gains Tax (CGT) including Small Business CGT concessions
• Goods and Services Tax (GST) and other indirect taxes

My approach to clients is to provide opportunities, rather than just solutions. I am passionate about Geelong and I enjoy partnering with businesses in the region to assist them to achieve their goals.

I am a Chartered Accountant (CA), with a Diploma in Financial Planning and a Bachelor’s Degree in Business (accounting).

West Carr & Harvey
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments