As of today, 28 September, employers need to pay their eligible employees a different rate of JobKeeper, with the wage subsidy now a two-tiered system, meaning that the rate is dependent on the number of hours worked.
The tier 1 rate of $1,200 per fortnight will now replace the $1,500 flat payment and will apply to employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, or eligible participants who were actively engaged in the business for 80 hours or more in February.
The tier 2 rate of $750 per fortnight will apply to all other eligible employees and business participants.
Additionally, while those employers already receiving the payment don’t need to re-enrol, they must demonstrate a decline in turnover and notify the ATO which tier they will claim for their employees.
Speaking exclusively on the MyBusiness webcast last week, ATO Deputy Commissioner James O’Halloran stressed that employers will in fact be the ones to determine what tier their employees belong to.
How employers do this is “very much situational”, he noted.
“It’s not a matter of a particular format in its own right. It will very much depend on what’s available, or what comes naturally out of the business action itself, or the manner in which people are in fact record keeping, if you like, for hours worked,” Mr O’Halloran said.
“I think it’s important to recognise that, certainly, Single Touch Payroll in itself contributes, but we’d be looking for what is a natural record or support that does demonstrate that effort of active participation in a business on behalf of businesses and in terms of employees on what basis the hours have been done.”
And to coincide with the start of JobKeeper 2.0, MYOB has said its major payroll products are ready to process the next stage of the wage subsidy.
While the ATO earlier announced it will work with payroll software companies in order to better determine and disclose which businesses are eligible for the extension and which tier of eligibility, MYOB has now revealed it has completed its prep.
“We’ve been working closely with the ATO to ensure our products are ready, as we know a significant number of businesses and individuals will continue to rely on this payment as the country recovers from the economic impacts of the coronavirus pandemic,” Dale Dixon, MYOB’s head of product for small business, said.
A staged rollout, which kicked off on Friday, has seen MYOB AccountRight and MYOB Essentials payroll products feature additional start and finish fortnights through to 28 March 2021, a report to help customers identify which tier their employees belong to, ability to easily report the employee tiers to the ATO and a turnover calculator to help with the quarterly turnover test.
While the extension provides welcome relief for many businesses, Mr Dixon acknowledges the long road to recovery.
“Sixty-one per cent of SMEs anticipate it will take more than six months to recover to pre-COVID levels of productivity and 32 per cent who plan to access JobKeeper 2.0 say they would have to close their business without it,” he concluded.
MyBusiness is hosting another webcast this Friday, 2 October, to answer questions raised during last week’s ATO webcast.