Despite the passage of the JobKeeper extension legislation, Treasurer Josh Frydenberg has yet to register the new rules that will set out the new eligibility criteria and further details around the new payment rates.
In the interim, the ATO has published guidance on some key components of the extension, including how to determine which payment rate applies to eligible employees and eligible business participants.
For the first extension period running from 28 September 2020 to 3 January 2021, employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020 will receive $1,200 per fortnight, while all other employees will receive $750.
For the second period running from 4 January 2021 to 28 March 2021, the rate will drop to $1,000 per fortnight and $650 per fortnight, respectively.
Speaking at the Accountants Daily Strategy Week, the Tax Institute’s senior advocate, Robyn Jacobson, said employers should start identifying which rate applies to their employees ahead of the 28 September change.
“A starting point is looking at whether the higher or the lower rate applies to the eligible employee or the eligible business participant,” Ms Jacobson said.
“You need to look at the employee hours worked in February or in June, looking at the four weeks on average in the pay periods that ended before 1 March or 1 July and that will be used to determine whether they’ve worked a higher or lower portion of hours.
“This is a static calculation, so once it is undertaken, you don’t need to keep doing it, but you will need to nominate which rate applies to the employee when you are claiming JobKeeper.”
Eligible business participants will also be subject to the new two-tiered payment rate, with the ATO noting that those who were “actively engaged in the business for 80 hours or more in February and provide a declaration to that effect” will be eligible for the higher rate.
However, Ms Jacobson believes there will be further details in the rules to help eligible business participants calculate their hours.
“They obviously don’t have payroll and there might not even be detailed records of their working hours, so there will be some detailed rules to explain how you would determine whether an eligible business participant is claiming the higher or the lower rate,” Ms Jacobson said.
“There will also be some legislative instruments that will set out what happens if the hours worked were unusual, what happens if someone was ill or if they took leave, or if they were involved in fighting the bushfires in that period earlier this year.
“We are waiting for these detailed rules, but this is going to require working through those hours, working out whether the higher or the lower rate applies and making sure that rate is fed through into the wage condition.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.