On 6 October 2020, the Federal Government announced a new stimulus measure for businesses known as the JobMaker Hiring Credit.
By providing eligible employers with wage subsidies, this program is designed to create more jobs for people aged 35 and under who have experienced unemployment or require additional assistance.
Eligible employers can receive up to $200 per week, for up to 12 months, for each eligible employee hired between 7 October 2020 to 6 October 2021. JobMaker payments will continue to be available until 6 October 2022.
Registrations for the JobMaker Hiring Credit program are now open, with the first claim period being made available from 1 February 2021.
Who is an eligible employer?
To be eligible for JobMaker Hiring Credit payments, an employer must meet all of the following criteria:
• Must hire or have hired an eligible employee (further details below);
• Must operate a business or not-for profit organisation within Australia, or be an eligible deductible gift recipient;
• Must hold an ABN;
• Must be registered for Pay As You Go (PAYG) Withholding;
• Must not receive JobKeeper payments for any fortnight beginning in a JobMaker period;
• Must have no outstanding income tax or GST returns in the last two years to the end of the JobMaker period you’re claiming;
• Must satisfy the headcount increase and payroll increase criteria* (further details below);
• Must satisfy reporting requirements, such as Single Touch Payroll (STP);
• Must be registered for the JobMaker Hiring Credit scheme; and
• Must not belong to an ineligible employer category.
Your total headcount for each Job Maker period will be the number of employees employed by you on the last day of each JobMaker period. This is called the headcount test date.
During the first year of the scheme, a headcount increase means the number of staff employed at the end of each JobMaker period must be higher than it was as at 30 September 2020 (known as the baseline headcount). If you had no employees or started carrying on a business after 30 September 2020, your baseline headcount is zero. The difference in your headcount between these two dates is your headcount increase, which is used in calculating your claim. If your headcount does not change, or it decreases, you are not eligible for a JobMaker Hiring Credit payment.
On the registration date you will be asked to provide your baseline payroll amount, which is worked out by calculating all of your payroll expenses (including salary and wages, allowances other than a reimbursement of expense or a fringe benefit, overtime, shift and penalties, bonuses and commissions, amounts withheld under PAYG withholding and amounts applied under an effective salary sacrifice arrangement) for the three months up to and including 6 October 2020 (a 92-day period). If you are a new business that began after 6 October 2020, your baseline payroll amount will be zero.
Your payroll expenses must have increased in the JobMaker period when compared to the baseline period. If your payroll has not increased, you will not be eligible for a JobMaker Hiring Credit payment.
Who is an eligible employee?
For an employer to be eligible to receive JobMaker Hiring Credit payments for an employee, the employee must meet all of the following criteria:
• Must be aged between 16 and 35 years when they started employment;
• Must have commenced employment between 7 October 2020 and 6 October 2021;
• Must still be a current employee during the JobMaker period;
• Must work or have been paid for an average of at least 20 hours per week during the JobMaker period;
• Must have provided a JobMaker Hiring Credit employee notice to their employer (and cannot provide this notice to more than one of their current employers);
• Must have received JobSeeker, Youth Allowance (except if they were receiving the allowance because they were undertaking full-time study or are a new apprentice) or Parenting Payments for at least two fortnights within the six fortnights (or 84 days) prior to starting employment; and
• Cannot be a business participant, relative or close associate of the business and cannot have started their current employment with an entity 12 months or more before the first day of the relevant JobMaker period.
What are the payment rates?
Eligible employers may receive a wage subsidy of up to:
1. $200 a week – for each eligible additional employee aged between 16 and 29 years old inclusive; or
2. $100 a week – for each eligible additional employee aged between 30 and 35 years inclusive.
The employee’s age will be based on the date they commenced employment with the employer and payments will be made in arrears following each JobMaker period.
What are the JobMaker periods?
A JobMaker period is a three-month period where an employer has hired or continues to hire an eligible employee.
JobMaker commenced on 7 October 2020 and will run in quarterly periods up to 6 October 2022. Please note any employees hired after 6 October 2021 will not be eligible for JobMaker.
You can begin making claims every three months from 1 February 2021. The subsidy payments will be paid in the subsequent quarter to the JobMaker period.
For example, you have a new eligible employee commence employment on 25 January 2021. The employee started during the 7 January 2021 – 6 April 2021 JobMaker period. The employee will be paid their wages by the entity the same as any other employee. You can then submit a JobMaker claim between the 1 May 2021 – 31 July 2021 claim period to receive the subsidy.
How do I apply?
You must be registered for JobMaker Hiring Credits before you are able to make a claim.
Both JobMaker registration and claims can be completed through the ATO Business Portal. Please note baseline headcounts and baseline payroll amounts will need to be submitted to the ATO as part of the registration process.
Alternatively, we at WMS can complete this process on your behalf via the ATO Tax Agent Portal.
Should you have any questions or require assistance in relation to the JobMaker Hiring Credit program, please don’t hesitate to contact our office on (07) 5556 3300 or firstname.lastname@example.org
DISCLAIMER: This article is intended to provide a general summary only and should not be relied on as a substitute for professional advice.
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