Sole Trader’s Guide to receiving Jobkeeper Payments - Tax Store Osborne Park
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Sole Trader’s Guide to receiving Jobkeeper Payments

Sole traders and self-employed people have not been forgotten in the Federal Government’s recently announced Jobkeeper package, and you could be eligible to receive $1500 per fortnight per employee.
And, even if you don’t employ any staff, you can still be eligible to receive the money for yourself as a business owner.
The benefit, however, depends upon the severity of any loss in turnover, and the eligibility of your employees.
In other words, both your business and your employees must qualify for the Jobkeeper package.

To assess your eligibility, you need to ask yourself two basic questions:

  1. Is the revenue from the business expected to be at least 30 percent less than in the corresponding period last year (2019)?
  2. Are the employees eligible for Jobkeeper payments?

The following should be helpful in solving your queries:

Which Sole Traders are eligible for Jobkeeper payments?

Any sole trader whose forecast revenue for 2020 is at least 30 percent less than in the corresponding period of 2019, is eligible to receive Jobkeeper payments for eligible employees.
If you do not have any employees, you may also be eligible to receive payments for yourself as a business owner.
Your reduction in business revenue is determined by comparing your forecast revenue for 2020 with the revenue for the corresponding month or quarter, of 2019.

This involves:

  1. Forecasting your business revenue for each of the months from March 2020 through to September 2020
  2. Comparing your forecast with the actual revenue in the same month in 2019. For example, you should compare the revenue forecast for June 2020 with your actual revenue for June 2019
  3. If the revenue forecast is less than 30 percent in any of the seven months of March to September 2020, compared to the corresponding months in 2019, you will satisfy the reduction in turnover test
  4. Alternatively, you can also compare the forecast revenue for any of the two quarters of April-June 2020 or July-September 2020, with the same quarter in 2019. If your forecast revenue is less by at least 30 percent for any of the two quarters, you will satisfy the reduced turnover test.

If your revenue is reduced by at least 30 percent in any of the seven months from March-September 2020, or in the two quarters of June and September – compared to the corresponding month or quarter in 2019 – the business may be eligible for Jobkeeper payments for the full cycle of the stimulus payment, i.e. March to September 2020.

This would add up to a total of $19,500 per employee if eligible for all 13 fortnights.

 

Which employees are eligible for Jobkeeper payments?

To be eligible to receive Jobkeeper payments, the employee must be:

  • An Australian citizen or permanent resident
  • A New Zealand sub-class ‘444 Visa’ holder who is resident in Australia
  • In temporary, part-time or permanent employment
  • In casual employment for a continuous period of one year
  • Receiving at least $1500 per fortnight in gross wages.

 

Sole traders with no employees are also eligible

If you are a sole trader with no employees, you may still be eligible for the Jobkeeper payments if you meet the revenue reduction test.

 

What if I pay my employee less than $1500 per fortnight?

JobKeeper employers must as a minimum, pay the full JobKeeper amount to an employee, even if that employee is normally paid less than the JobKeeper amount.
This means the employer must pay the amount of the JobKeeper payment, or more, for work performed.
In effect, therefore, the employer is required to pass on any difference in the wage subsidy and the actual wage, to the employee.
Employers must also withhold tax on the full $1500, but they are not required to pay superannuation on the increased pay.

 

Anti-Avoidance Rules

There are strict compliance, monthly reporting, due diligence and anti-avoidance provisions in operation.
Therefore, always consult with your accountant to determine your eligibility and compliance requirements.

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