Key Points

• The JobKeeper Payment scheme has been extended until 28 March 2021.
• Existing eligible employers must submit the new decline in turnover form before completing their business monthly declarations from 1 February 2021.
• From 4 January 2021, employers must pay their eligible employees at least the correct JobKeeper amount of either $1,000 for tier 1 or $650 for tier 2.

Full Article

JobKeeper Extension 2 Starts Soon

This extension period will run from 4 January 2021 to 28 March 2021. You will need to show that your actual GST turnover has declined in the December 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).

You also need to have satisfied the original decline in turnover test. However, if you:

• were entitled to receive JobKeeper for fortnights before 28 September, you have already satisfied the original decline in turnover test
• are enrolling in JobKeeper for the first time from 28 September 2020, if you satisfy the actual decline in turnover test, you will also satisfy the original decline in turnover test.  

If there were events or circumstances outside the usual business setting that resulted in the December 2019 comparison period not being appropriate, then an alternative test may apply. See Alternative test.

You can be eligible for JobKeeper Extension 2 even if you were not eligible for JobKeeper Extension 1.

JobKeeper Extension 2 Payments

You must:

• pay your eligible employees at least the JobKeeper amount that applies to them each JobKeeper fortnight – for JobKeeper extension 2, this will be either $1,000 for tier 1 or $650 for tier 2
• You must tell your eligible employees, eligible business participant or eligible religious practitioners which payment rate applies to them within seven days of notifying us of their payment rate.

Note that JobKeeper payments are made to you in arrears. You must have made payments to your employees (met the wage condition) to be reimbursed.

The rates of the JobKeeper payment in this extension period are:

• Tier 1: $1,000 per fortnight (before tax)
• Tier 2: $650 per fortnight (before tax).

Decline in turnover

The actual decline in turnover test is satisfied for JobKeeper extension 2 when your current GST turnover for the quarter ending 31 December 2020 (October, November and December) has declined by the specified shortfall percentage (30%, 50% or 15%) in comparison to your current GST turnover for the quarter ending 31 December 2019.

What is different?

Unlike when you calculated the original decline in turnover test, you do not use your projected GST turnover for the relevant quarter being tested. You use your current GST turnover.

To work out which supplies you have made in the turnover test period, you must use the accounting basis you used for GST reporting purposes. Depending on your circumstances, you could use a cash basis or a non-cash basis.

A GST accounting basis will apply to allocate supplies to a test period regardless of whether:

• you are registered for GST
• the supply was a taxable supply, or
• you report GST on a monthly or quarterly basis.

For many businesses registered for GST, this calculation will match the ‘total sales’ reported at G1 on your BAS minus GST payable (1A), where applicable.

If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting.

New JobKeeper participants

The JobKeeper scheme will remain open to new participants, provided they meet the eligibility requirements for the relevant period.

New employers

If you are enrolling for the JobKeeper Payment for the first time, you will need to complete the following actions by the end of the month that you wish to claim for:

• Enrol for the JobKeeper Payment (be aware that it may take up to 3 days to process before you can submit your decline in turnover form and identify your eligible employees).
• Submit your decline in turnover form.
• Identify your eligible employees or business participant and tell us whether the tier 1 (higher) or tier 2 (lower) payment rate applies to them.

If you are not able to identify your eligible employees or complete the decline in turnover form by the end of the month you wish to claim for, you will need to contact us and we will work with you to complete these steps.

Key Dates:

From 4 January 2021 – new decline in turnover form available

Eligible employers will be able to access and submit the decline in turnover form to determine their eligibility to participate in the second JobKeeper Payment extension period from 4 January 2021 to 28 March 2021.

This new decline in turnover form must be submitted before existing eligible employers can complete their business monthly declarations from 1 February 2021.

4 January 2021 – meet wage condition for JobKeeper Fortnight 20

For JobKeeper Fortnight 20 (21 December 2020 to 3 January 2021), the ATO are allowing employers until the end of Monday 4 January 2021 to meet the wage condition for their eligible employees.

You will need to pay your eligible employees at least the JobKeeper amount that applies to them each JobKeeper fortnight. For JobKeeper extension 2, this will be either $1,000 for tier 1 or $650 for tier 2.

28 January 2021 – business monthly declarations due for December JobKeeper fortnights

Eligible employers can complete their business monthly declaration from 4 January 2021 to be reimbursed for payments made to their eligible employees in JobKeeper Fortnights 18, 19 and 20 (23 November 2020 to 3 January 2021).

The ATO will continue to process monthly declarations to reimburse employers for payments for the month of December past the usual due date of the 14th of the month, until Thursday 28 January 2021.

31 January 2021 – meet wage condition for JobKeeper Fortnights 21 and 22

For the JobKeeper Fortnights 21 and 22 (starting 4 January 2021 and 18 January 2021), the ATO are allowing employers until Sunday 31 January 2021 to meet the wage condition for their eligible employees.

This is to make sure that employers have paid their eligible employees before claiming JobKeeper payments in their February monthly business declarations.

Schedule of JobKeeper Fortnights

The ATO have extended the date that:

• employees need to have been paid for JobKeeper fortnight 20 from Sunday 3 January 2021 to Monday 4 January 2021
• employees need to have been paid for JobKeeper fortnight 21 from 14 January 2021 until 31 January 2021.

Your Payroll Cycle

When paying eligible employees, you do not need to adjust your pay cycle through your existing payroll solution.

If you usually pay your employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner.

If you have any questions or need advice and clarity specific to your situation, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.