JobMaker is a credit available to eligible businesses and non-profit entities that create new jobs (not if you are merely replacing someone who left). The hiring credit is available for jobs created from 7 October 2020 until 6 October 2021 and provides:
$200 per week for new employees between 16 to 29 years of age; and
$100 per week for new employees between 30 to 35 years of age.
Administered by the ATO, JobMaker is a credit that is paid quarterly in arrears from the start date of the employee for 12 months, assuming the business and employee remains eligible (see JobMaker Eligibility).
The credit is an incentive for the employer to support wage costs and is not passed onto the employee.
Unlike JobKeeper, JobMaker can apply to new businesses and the business does not need to satisfy a decline in turnover test to receive payments.
A series of people are excluded from the JobMaker scheme including employers receiving JobKeeper, employees receiving an apprentice wage subsidy, and close associates of the business including some relatives of the business owners (see Who is not eligible for JobMaker?).
Government entities or agencies, banks and other institutions subject to the bank levy, businesses in liquidation, and foreign Government entities (unless a resident entity), are unable to access JobMaker.
If the employer is claiming JobMaker, it cannot also receive any of the following payments for the employee:
Supporting Apprentices and Trainees Wage subsidy;
Australian Apprentice Wage subsidy;
Boosting the Apprenticeship Commencements Wage subsidy; or
Restart, Youth Bonus, Youth, Parents or Long-term Unemployed Wage subsidies.
Certain employees are also excluded. These include:
Employees who commenced employment 12 months or more before the first day of the JobMaker period (even if the employer has claimed JobMaker for less than 12 months, for example where the employee was eligible for JobKeeper). The entitlement to JobMaker is for 12 months from the date the eligible employee commenced employment.
Contractors, subcontractors or labour hire employees.
Employees who were engaged by the business at any time in the 6 months before 6 October 2020, other than as an employee, to perform a substantially similar role or substantially similar functions or duties to those performed as an employee. For example, JobMaker cannot be claimed for a contractor who becomes an employee.
JobMaker also cannot be claimed for:
Sole traders (as they cannot employ themselves);
Partners of a partnership;
Trustees and beneficiaries of trusts (that are not widely held unit trusts); or
Directors or shareholders of companies (that are not widely held).
JobMaker also cannot be claimed for close associates of the business and its owners. A “close associate” is a relative of an individual, partner, trustee, beneficiary, director or shareholder. The rules also apply on a look-through basis. For example, this would mean that a child of a director of a trustee company of a trust is excluded. A relative is:
The spouse of the person;
A parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendent or adopted child of that person, or of that person’s spouse;
The spouse of the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendent or adopted child of that person, or of that person’s spouse.
How to register for JobMaker
Businesses will need to elect to participate in the JobMaker scheme with the ATO. This election can be made at any time before the end of the JobMaker claim period your business wants to claim payments for. For the first JobMaker period (7 October 2020 to 6 January 2021), the claim period ends on 30 April 2021, which means that if your business wants to claim JobMaker for this period it needs to register with the ATO by 30 April 2021.
Your business only needs to register once for JobMaker. This can be done through:
ATO online services through myGov;
The Business portal using myGovID; or
Using your registered tax or BAS agent.
When you register, your business will need to provide:
Payroll for the 3 months up to and including 6 October 2020; and
Each of your eligible employees must give you written notice in the approved form (the JobMaker employee notification) confirming that:
The age condition was met;
They met the social security payments condition; and
They have not provided a notice to another entity of which they are currently an employee, unless that notice has ceased to have effect. A notice ceases to have effect as soon as the relevant employment arrangement ceases.
Each employee will need to be added to Single Touch Payroll three days prior to the end of the relevant JobMaker claim period.
Calculating baseline headcount and payroll
On registration, your business will need to establish your baseline for:
The details you provide as part of the registration process can be amended until the first claim is submitted. However, once the first claim is submitted, it is unlikely the details can be changed so it will be important to ensure that the headcount and payroll figures are correct as these form the basis for calculating the JobMaker payments.
For each JobMaker period, you will need to establish that your headcount and payroll continues to demonstrate that at least one additional employee was employed (see Ongoing JobMaker reporting below).
How is baseline headcount calculated?
The baseline headcount figure is simply the number of employees employed by your business at 30 September 2020. Each employee is counted as one, regardless of whether they are full-time, part-time or casual. Contractors and sub-contractors are not counted. If someone is engaged on a fixed-term contract you will need to check whether they are classified as an employee or contractor.
If your business did not have any employees on 30 September 2020 or started business after 30 September 2020 then the baseline headcount is zero.
The baseline headcount figure will be adjusted in the second year of the JobMaker scheme to ensure new employees are not counted twice.
How is baseline payroll calculated?
Your business’s baseline payroll figure is the total payroll paid within the three months up to and including 6 October 2020 (i.e., a period of 92 days). This figure is also used for the purpose of determining the credit for the first JobMaker period, but adjustments will sometimes need to be made to this figure for future periods.
Salary, wages, commission, bonus, allowances;
PAYG withholding amounts; and
Salary sacrificed super contributions and fringe benefits
The ATO suggests that the following payments do not count towards the baseline or total payroll expenses:
Government Paid Parental Leave (GPPL);
Workers’ compensation absence (not able to work);
Reimbursements of expenses incurred by employees;
Directors’ fees (that are not salary and wages);
Lump sum payments (lump sum A, B, D and E);
Exempt foreign income (exempt from pay as you go withholding);
Eligible termination payments;
Fringe benefits provided to an employee which are not part of an effective salary sacrifice arrangement; and
Amounts contributed as super to meet employer super guarantee obligations.
Baseline payroll appears to focus on when payments are made, rather than the period that they relate to.
Your business’s payroll expenses must have increased in the JobMaker period compared to the baseline payroll amount to be able to access JobMaker for that period. If payroll does not increase, your business will not be eligible for a payment for that period.
The payroll increase amount also provides an upper limit on the JobMaker payments for that period. That is, your business will not be eligible for payments that exceed your increase in payroll.
If your business is a new business that started after 6 October 2020, the baseline payroll amount will be zero. If the business only started employing employees part way through the three months up to 6 October 2020, then the baseline payroll simply includes the payroll expenses up to that date.
New employee example
Mary runs a small bakery business with one full-time employee. Her employee is paid a salary of $30,000 a year. The baseline payroll expenses for the first JobMaker period is the sum of the payroll amounts for the three months (92 days) up to and including 6 October 2020. Mary’s baseline payroll amount is $7,500.
The bakery has had a growth in sales which prompts Mary to hire an assistant manager on 7 October 2020.
The manager is paid $80,000 per year. The bakery’s total payroll expenses for the JobMaker period will be $27,500 ($20,000 for the assistant manager and $7,500 for her other employee). As the total payroll expenses for the JobMaker period exceeds the baseline payroll amount by $20,000, she has a payroll increase.
If Mary satisfies the other requirements, the bakery will be eligible for the JobMaker Hiring Credit payment for the period.
How is the ‘20 hours per week’ requirement calculated
An employee needs to have worked an average of at least 20 hours per week for the full weeks employed for the JobMaker period being claimed. To work out the number of hours that they must have worked or been paid for in the relevant period, start with the total days that the individual was employed by the entity in the JobMaker period. Then, divide this by 7 and round down to nearest whole number. This figure is then multiplied by 20.
Hours of paid work include paid overtime, paid leave and paid absences on public holidays. It does not include any unpaid leave. The number of hours actually worked include any hours worked, including unpaid overtime, paid leave and paid absences on public holidays and might be more appropriate if an employee is not paid on a particular rate (such as salaried employees).
Hiring an eligible employee partway through a JobMaker period
Marco is a 30-year-old labourer who was receiving the JobSeeker payment.
On 28 November 2020, Marco started employment with a construction company. Marco worked for 25 hours per week for the rest of the JobMaker period.
To satisfy the minimum hours requirement, Marco must work at least 100 hours in the period (being 40 days employed, divided by 7, rounded down and multiplied by 20). Marco will satisfy this requirement, as he has worked 125 hours in the remainder of the period.
Assuming the business and your employees are eligible, and you have enrolled for JobMaker, the next step is to work calculate your JobMaker claim. The ATO will work out the actual amount owing to your business. You are responsible for reporting the headcount and payroll for a period.
Your business is only eligible for JobMaker payments if the headcount and payroll have increased against your baseline for the relevant period.
Calculating the JobMaker amount can be complex. Broadly, the hiring credit payment for a particular period is the lesser of:
The headcount amount for the period; and
The payroll amount for the period.
The headcount amount is based on mixture of factors including:
Total increase in headcount;
Number of days in the period;
Number of days the additional employees were employed in the period; and
Whether the employees are higher or lower rate.
The ATO will calculate the amount based on:
Payroll information provided in the registration and claim form.
The headcount increase condition operates a bit differently depending on which JobMaker period you are dealing with. For the first four JobMaker periods, headcount at the end of the relevant period is measured against headcount at 30 September 2020. From the fifth JobMaker period (in 2022) onwards the baseline headcount figure will be adjusted.
Your total headcount for a particular JobMaker period only includes employees who are employed at the end of the period. Employees who worked during the JobMaker period but were not employed at the end of the last day of the period are not taken into account.
Headcount increase number for first JobMaker period example
ABC Pty Ltd (ABC) has been operating a local grocery since the 1990s. On 30 September 2020, ABC had 15 employees.
On 7 October 2020, in anticipation of an increase in business over the holiday period, ABC takes on an additional 2 employees.
ABC’s new employees (and their existing employees) are still employed by ABC at the end of the first JobMaker period (6 January 2021).
ABC’s headcount increase number for the first JobMaker period is calculated as follows:
17 (employees employed at the end of period) − 15 (baseline headcount for period) = 2
On 31 January 2021, ABC’s temporary employees stop working for ABC, as does one of ABC’s other employees. ABC does not have any other staff movements for the second JobMaker period (7 January 2021 – 6 April 2021).
ABC does not have a headcount increase in the second JobMaker period because the number of employees employed at the end of the period (14) is less than its baseline headcount (15 employees on 30 September 2020).
As ABC does not have a headcount increase in the second JobMaker period, it is not entitled to a JobMaker Hiring Credit payment for this period.
The payroll increase test involves comparing the total payroll amount for the JobMaker period with your baseline payroll amount.
The payroll figure reported as part of the registration process is the total payroll paid within the three months up to and including 6 October 2020 (i.e., a period of 92 days). However, this won’t necessarily be the baseline payroll figure for each JobMaker period. This is because the figure needs to be adjusted if the relevant JobMaker period does not have 92 days.
For example, the first JobMaker period ending on 6 January 2021 has 92 days so the amount reported to the ATO as part of the registration process should be used as the baseline payroll amount. However, the second JobMaker period runs from 7 January 2021 to 6 April 2021 and has 90 days. As a result, the baseline payroll figure needs to be adjusted so that amounts paid / applied on the 7th and 8th of July 2020 are not included. Rather, the baseline payroll amount for this JobMaker period covers the 90 day period from 9 July 2020 to 6 October 2020 (inclusive) – see Key JobMaker dates.
The Federal budget was announced on Tuesday 6th October after a delay due to the coronavirus pandemic.
Treasurer Josh Frydenberg said it would focus heavily on job creation in order to pull the country out of the economic crisis it faces. With uncertainty remaining until a vaccine for Covid-19 is available, there will likely be more announcements as circumstances change over time. Some of the key measures in the budget are:
Lower and middle income earners will receive a tax cut that will be up to $2,745 for singles or up to $5,490 for dual income families in 2020–21.
The table above is taken from the Government’s Budget website – talk to us about actual figures for your situation.
Employers and young workers – The JobMaker hiring credit is aimed at increasing employment for young people aged 16-35 years. Employers who demonstrate an increase in overall employment will receive a credit for a period of 12 months for eligible employees.
The instant asset write-off threshold – Businesses with turnover up to $5 billion will be able to write off the full cost of eligible depreciable assets of any value in the year they are first used or installed ready for use. The cost of improvements made during this period to existing eligible depreciable assets can also be fully deducted.
Temporary loss carry-back – Companies with turnover up to $5 billion will be able to temporarily, up to June 2022, offset tax losses against previous profits and tax paid in or after 2018-19.
Research and Development – For small claimants (turnover less than $20 million), the Government will increase the refundable R&D tax offset to 18.5 percentage points above the claimant’s company tax rate.
Fringe Benefit Tax Returns now simpler – employers will be able to use existing corporate records, rather than prescribed records, to complete their FBT return and employer-provided retraining activities will now be exempt when employees are redeployed to a different role in or outside the business. From April 2021, carparks and electronic devices will also see concessions.
Paid parental leave is extended – Parents will now qualify for the payment if they have worked 10 of the 20 months before giving birth or adopting, as opposed to 10 of the past 13 months.
$50 million will go to a Regional Tourism Recovery initiative to support tourism operators market to a domestic audience.
The budget promises $2 billion for concessional loans to help Farmers receiver from drought. There are also plans for improved water infrastructure and support for exporters.
Over the next four years an additional 14 billion is committed for new and accelerated projects in Australia.
Apprenticeships and training
Businesses will receive the 50 per cent wage subsidy, up to a cap of $7,000 per quarter, for commencing apprentices and trainees, including those employed by Group Training Organisations, until 30 September 2021 $252 million will be spent over two years to support the delivery of 50,000 higher education short courses in areas including teaching, health, information technology, science and agriculture.
Superannuation funds will now be linked to employees and move with them in order to stop so the creation of unintended multiple accounts. An online tool named YourSuper will give people the ability to compare funds. Aged care pensions will increase by an extra $250 payment in December and March, and government funding will be provided for 23,000 new home care packages.
There are also commitments across a number of other areas such as for the homeless, investment in dementia care, health, tourism, first home buyers and the environment.
The coronavirus pandemic has forced a significant amount of change and upheaval onto you and your team – in a very short amount of time. We’ve gone from ‘business as usual’ to closed offices, working from home and the full reality of isolation during an emergency lockdown.
To combat this change, it’s important to take steps to care for your employees.
Key ways to take care your teams wellbeing
There’s no single solution when it comes to taking care of your employees’ wellbeing. For your people to cope with their new enforced remote working life, they’ll need to consider everything from work/life balance, to fitness, exercise or their own mental wellbeing.
As a leader, your advice, tips and support will be vital to your workforce during these testing times. Important areas where you can provide guidance may include:
Getting used to remote working – Switching from working in a busy communal workspace to being isolated in your own home is a huge shift. Provide as much guidance as you can and send your team links to useful remote working resources.
Keeping in contact with each other – team spirit is a hugely important thing to preserve, even when your people are spread over different locations. It’s crucial that your employees can communicate with each other in real time, whether it’s instant messaging, like Slack or WhatsApp, or the many different video conferencing platforms, such as Google Hangouts, Zoom, Skype, or Microsoft Teams.
Sticking to some form of routine – a big part of any working day is routine. Having a clear routine provides structure for your employees day and makes it easier for them to know when they should be working, and when they should be relaxing.
Being conscious of work/life balance – as per the previous point, when you work at home, it’s imperative to get the balance right between ‘work time’ and ‘home time’. Give your team a rough idea of what hours they should be working, and between which times, but let them be flexible about how they use that time.
Having frequent breaks away from work – another very important element of the working day is breaks. In a normal workspace, tea breaks and catch-ups serve to break up the working day, so make sure your team take regular screen breaks. It’s a chance to relax and let your mind recharge.
Taking regular exercise – when you’re cooped up at home, it’s tempting to sit all day. But we all need some form of exercise during the day to keep us energised, fit and healthy. Whether it’s following a YouTube exercise routine, or running around the block, ensure your team does something to get the blood flowing.
Focusing on mindfulness and mental health – Taking measures to reduce stress and become more calm is vital for your team’s mental health. Try yoga or meditation to destress, and suggest they explore mindfulness apps like Headspace and Calm to introduce them to new techniques.
Limiting exposure to news and social media – watching rolling news reports on the pandemic, or constantly getting notifications from your social media accounts, serves only to add to your team’s stress levels. Suggest that they check the news via one trusted source once a day, but try not to let themselves be bombarded with updates.
If your superannuation fund balance is less than $500,000, a new rule means you are now able to carry forward any unused concessional contribution from prior years into following years. This allows you to maximise the tax benefits of contributing the upper limit concessional amount.
It also gives you some flexibility with being able to contribute more in years that you have the cash flow to do so. This is useful for people whose income has been interrupted or for those who receive larger than usual income some years.
Once your fund balance reaches $500,000 you won’t be able to carry forward unused amounts. Also, unused balances can only be carried forward for up to five years.
The new rule applies from 1 July 2018. This means that the 2020 financial year is the first year in which you can top-up your super contributions by the carry forward amount. This year, there is only one year (2019) of unused cap that can be carried forward. In 2021, there will be two years of unused balance available to carry forward and so on, up to a maximum of five years balance to carry forward in the 2024 financial year. Assuming the law doesn’t change, the five-year expiry rule will continue from then.
What are Concessional Contributions?
Concessional superannuation contributions are those made to your super fund before tax. This includes compulsory employer superannuation guarantee contributions, additional employer before-tax super and salary sacrifice amounts.
It may also include personal contributions you make as tax deductions, for example, sole traders who contribute to their own super fund.
Roll Over Unused Concessional Balance Example
If you contributed $15,000 in the 2019 financial year, and your fund balance is less than $500,000, you can contribute an extra $10,000 in the 2020 financial year, above the usual $25,000 concessional cap, bringing the total for 2020 to $35,000.
As another example, let’s say as a self-employed person you did not contribute any superannuation for 2019 to 2023. In the 2024 financial year, you could then contribute $125,000 to catch up to the allowable concessional contribution cap for the previous five years.
Concessional Contributions Checklist
Check your superannuation balance as at 30 June 2019. Was it less than $500,000?
What did you contribute to super in the 2019 financial year?
If you contributed less than $25,000 in 2019 and you have available cash flow, consider topping up to the threshold, even if you don’t pay the full $25,000 this tax year. You can always carry forward this year’s threshold balance and top up in a future year.
What is the last date your super fund will accept payments? It will probably be at least a week before the end of the financial year.
Get advice before making extra contributions
If you contribute too much to your super fund you may end up with a tax bill! If you’re keen to get the tax benefits of maximum contributions, talk to us now before your super fund deadline and we’ll help you build your super balance. We can also help you start planning for the following year’s contributions.
Devenny Payne is proud to support the 15th David Calleja
Memorial Car Show.
To be held on 2 February 2020, the event is expected to
attract over 2 000 people from all over Victoria with more than 600 car
enthusiasts displaying classic, historic and modified cars, trucks and bikes.
All funds raised are donated to Djerriwarrh Health Services
(DJHS) to purchase medical equipment to improve patient care. The event also
promotes awareness of the health services DJHS provides to the local
communities of Bacchus Marsh, Melton and Caroline Springs.
DJHS relies on the generosity of patients and their carers
(past and present), individual donors, community groups and corporate
supporters to supplement government funding in order to ensure vital
improvements are made to benefit patient care.