The Australian Taxation Office has reminded employers that they have until 14 October to lodge a business monthly declaration for JobKeeper payments made in September and until 31 October to determine and submit their actual decline in turnover online to be eligible for the JobKeeper extension.
In a notice issued to businesses, the Tax Office reiterated that to be eligible for the JobKeeper payment from fortnight 14 onwards, businesses must now demonstrate a decline in actual GST turnover in the September 2020 quarter.
Speaking on a MyBusiness webcast last month, James O’Halloran, deputy commissioner at the ATO, outlined the process businesses must follow to confirm their eligibility.
“Identify the turnover period, and then there’s what’s called the basic test or the comparison. And in many instances, businesses will in fact be using the G1 label from the activity statement where that’s appropriate and, of course, suitable,” he said.
“They’ll then work at the GST turnover for the periods and, obviously, the shortfall percentages apply, and in most instances, it will be 30 per cent. Then you determine if it has declined by the specified amount.
“So, know your period, know the turnover, and obviously know the relevant test for you.”
He alerted businesses to the one key change, explaining that the turnover test must be based on actual sales made in the relevant quarter and not projected sales, as was the case over the previous six months.
Additionally, JobKeeper payment rates changed as of 28 September, with the wage subsidy now split into a two-tiered system, meaning that employees are to be divided based on hours worked before either 1 March 2020 or 1 July 2020.
The tier 1 rate applies 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 and provide a declaration to that effect.
According to the ATO, actively engaged means an employee that regularly performs, or manages the performance of, services the business provides; sells or manages the sale of goods of the business; performs other activities associated with managing the business; and exercises control over activities related to business strategy and growth.
The tier 2 rate applies to all other eligible employees and business participants.
Mr O’Halloran explained 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. However, he did underline that the ATO will expect businesses to show “in some shape or form” what evidence they based their assessment on.
“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.
In the notice issued on Tuesday, the ATO noted that employers enrolled in the original JobKeeper payment scheme will need to tell the ATO which payment tier they are claiming for each eligible employee or business participant in their November JobKeeper business monthly declaration.
Businesses will need to submit this between 1 and 14 November 2020.
For many employers receiving JobKeeper over the initial six months, the 14 October may be the last time they are required to lodge a business monthly declaration if they find they no longer qualify for the scheme.
For more information on JobKeeper, tune into our webcast here.