This is a step by step guide on how to register for and administer JobKeeper since keeping track of employees can become complicated without the right help. If you would also like to be prepared for any legal matters regarding your employees then consider contacting an employment law firm.
Use this Guide to:
- Determine your eligibility for the JobKeeper program
- Determine your eligible employees
- Enrol your business and employees for JobKeeper with the ATO via Xero
There’s a lot of moving parts, a bit of risk to determine eligibility and is time consuming.
If you want to outsource this to an accounting expert, skip everything here and contact us for assistance.
OVERVIEW OF JOBKEEPER PROGRAM
- Under the JobKeeper Payment, businesses significantly impacted by the COVID-19 outbreak will be able to access a subsidy from the Government to continue paying their employees.
- The Government will provide $1,500 per fortnight per employee for up to 6 months to eligible employers
- Employers (including non-for-profits) will be eligible for the subsidy if:
- their revenue has, or is reasonably likely to reduce by 30% or more, relative to a comparable period a year ago (of at least a month)
- the business is not subject to the major bank levy
- the tax commissioner has discretion to set out alternative tests in specific circumstances
- Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer – including full-time, part-time, long-term casuals and stood down employees. Casual employees eligible for the JobKeeper Payment are those employees who have been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020.
- Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.
- The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
- Registrations for JobKeeper open 20 April 2020
- From 20 April: enrol for JobKeeper payment.
- By 30 April: enrol and pay your employees to claim JobKeeper payments for April.
- 4 May onwards: identify your employees.
- Each month: reconfirm employee eligibility.
- If you need more time, you have until the end of May to enrol and identify your employees.
WHAT YOU NEED TO DO
Phase 1: Determine if you are eligible for JobKeeper
In order to qualify for the JobKeeper program, you must satisfy the decline in turnover test.
The decline in turnover test is:
- their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
- their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
- the business is not subject to the Major Bank Levy.
The steps to determine this are:
Step 1: Identify the Turnover Test period and comparison Period
Choose whether you are comparing your monthly or quarterly turnover. You can choose to compare the relevant month or quarter, regardless of whether you report quarterly or monthly.
If you are on a Cash basis for GST reporting purposes, you may elect to calculate your turnover based on Cash or Accruals basis.
If you are on Accruals basis for GST reporting purposes, you must calculate your turnover based on Accruals basis.
Then compare this turnover test period against the comparison period. The comparison period must be the period in 2019 that corresponds to the turnover test period.
In summary, following test periods are available for your business:
- March-20 against March-19 (cash basis)
- March-20 against March-19 (accrual basis)
- April-20 (projected) against April-19 (cash basis)
- April-20 (projected) against April-19 (accrual basis)
- April to June-20 Quarter against April to June-19 quarter (cash basis)
- April to June-20 Quarter against April to June-19 quarter (accrual basis)
There may be situations where the turnover in the corresponding period in 2019 does not provide an appropriate relevant comparison. In these situations, you will need to consider the alternative test. The details for this test have not yet been released.
More information on the turnover test can be found here.
Step 2: Calculate the shortfall percentage
Calculate the decline in turnover for the test period as a percentage. Most accounting software will allow you to prepare a Profit & Loss, and compare periods. Xero also allows you to easily switch the reporting method between cash and accruals basis.
If you are a small business with less than $1Bn of turnover, this decline in turnover must be 30% or greater. If you are into gardening or farming, you definitely understand the value of a dump cart for lawn tractor around your space. You will most likely spend a good chunk of your time maintaining and taking care of your law
If you are a registered charity, the decline in turnover must be 15% or greater.
You only need to satisfy the fall in turnover test once – you don’t need to test your turnover in the following months or quarters.
Phase 2: Determine your eligible employees
Eligible employees for the JobKeeper program:
- are employed by you (including if they were stood down or re-hired)
- were employed at March 1, 2020
- were 16 or older at March 1, 2020
- are an Australian resident
- didn’t receive paid parental leave
- didn’t receive workers compensation payments
Find more information on eligible employees here.
Phase 3: Notify your employees in writing
Before enrolling your eligible employees for the JobKeeper Payment, you need to complete the JobKeeper employee nomination form notice to:
- notify your eligible employees that you intend to participate in the scheme
- ask them if they agree to be nominated and receive payments from you as part of the scheme.
You can download a copy of the nomination form here:
Both you and the nominated employee need to complete the form. You do not need to send this form to the ATO. It is just a document you retain to prove that your employee has agreed that you claim the JobKeeper Payment for them.
Phase 4: Enrol your Business for JobKeeper with the ATO
Enrol your business with the JobKeeper payment program via your Business Portal via myGovID.
You must do this by the end of April to claim JobKeeper payments for April.
You can register for JobKeeper on or after 20 April 2020.
Phase 5: Enrol your Eligible Employees for JobKeeper
The next Phase is to enrol your eligible employees in Xero for JobKeeper.
The steps are as follows:
- Go to the ‘payroll’ module within Xero.
- Click the ‘payroll support page link’ within the ‘Pay Employees’ screen
Confirm the eligible employees in Xero. Cross check this against your eligible employee checklist as a cross check
Click Start JobKeeper for each eligible employee and select the relevant JobKeeper fortnight
Phase 6: Pay your employees the correct amount!
If you are eligible for JobKeeper and intend to claim it from the 30th of March, you must ensure:
- You have paid at least $1,500 before tax to each eligible employee per JobKeeper fortnight
- The first Jobkeeper fortnight period is 30th of March to 12th of April
- If you paid less than $1,500 per fortnight to your Jobkeeper eligible staff, you have until the end of April to pay the top-up
Find more information on paying your eligible employees here.
Phase 7: Setup JobKeeper income account in Xero
- Go to Settings > Advanced Settings > Chart of Accounts
- Create a new account – call it ‘JobKeeper Allowance’
- Set it up to be as ‘Other Income‘ and GST Free
Reconcile the JobKeeper payments from the ATO to this account.
Phase 8: Report monthly turnover to the ATO
Each month, you must reconfirm the eligibility of your business and your reported eligible employees.
You must also provide information as to your current and projected GST turnover. This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme.
Each month you must:
- Ensure you have paid your eligible employees at least $1,500 per eligible employee per fortnight.
- Log in to the Business Portal to
- review the number of eligible employees for each JobKeeper fortnight
- update your eligible employees if any of your eligible employees change or leave your employment
- provide your current and projected GST turnover
- re-confirm your contact and bank details for payment.
Business Wise can assist you in making the business monthly declaration through the Business Portal.
Would you prefer to outsource this to an expert?
The accounting team at Business Wise can help you:
- Determine if you are eligible for the JobKeeper program
- Register your business for the program on your behalf
- Take care of all ongoing compliance and lodgement requirements by the ATO.
If you want to outsource this to an accounting expert, contact us for assistance.