JobMaker, the Federal Government's most recent financial support package for Australian businesses, aims to target and lower the youth unemployment rate through bolstering wage costs of newly created jobs for the younger generations.
Registrations for the federal government JobMaker credit program opened on 7 December 2020 and can be claimed from 1 February 2021 for the first period (7 October 2020 - 6 January 2021).
Credits are payable per each employee that increases your headcount and that meet the requirements outlined below. Now is the time to register your business if you have not already done so!
What is JobMaker?
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.
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
Which employees are eligible?
To be eligible the employee must:
- Have received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least 28 consecutive days (or 2 fortnights) in the 84 days (or 6 fortnights) prior to starting employment
- Be at least 16 years old and less than 36 years of age at the time their employment started
- Started work between 7 October 2020 and 6 October 2021 (inclusive)
- Worked or been paid for at least 20 hours per week on average for the full weeks employed for the period being claimed
- Not be an excluded employee
Who is not eligible?
Certain employees are 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). including employers receiving JobKeeper, employees receiving an apprentice wage subsidy, and close associates of the business including some relatives of the business owners.
How do I access JobMaker payments?
To access JobMaker payments, you will need to:
- Determine if the business is eligible to receive JobMaker payments
- Determine which, if any, employees are eligible and whether the higher or lower rate applies to them
- Ensure the business passes the ‘additionality test’. That is, total headcount and payroll have increased, not just that you have employed new employees. You will need to pass this test in every quarter you make a claim.
- Ensure eligible employees complete the JobMaker employee notice
- Enrol for JobMaker with the ATO
- Establish the baseline payroll and headcount for your business
- Calculate the increase in headcount and payroll for your JobMaker claim
- Ensure the claim is lodged by the end of the claim period
If you have not yet registered your business for JobMaker and would like further information and advice around this please contact any of our experts here at Keeping Company or your account manager directly, we will happily guide you through the process in greater detail.
At Keeping Company, we’re not just accountants, we’re business people too. With our counsel, your business can reach its full potential.
We have a team of experts; Cloud Accountants, Business Advisors, Finance Specialists working together and ready to help, contact us today.
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For all media enquires please contact Tracy Miller, CMO, Keeping Company 0414 898 452.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.