New Director ID – Calling All Directors

If you are a director or plan to become a director in the future, regulation updates recently announced by the ATO affect you.
From November 1^st 2021 the Australian Business Registry Services (ARBS) is introducing the Director Identification Number (Director ID).
A Director ID is a 15 Digit unique identifier that will be issued to a director who has verified their identity with the ARBS. These new measures are being put in place to;

help prevent the use of false and/or fraudulent director identities
make it easier for external administrators and regulators to trace directors’ relationships with companies over time
Identify and eliminate director involvement in unlawful activity

The Director ID is linked to the Director – not the company – so this means that you keep the same number forever even if you change companies, are a director of multiple companies, stop being a director, change your name or move to another state or county.

Who needs to apply?

You will need a Director ID if you are a director of:

any Company or corporation
a corporate trustee, for example, of a SMSF
foreign company registered with ASIC and carrying on business in Australia (regardless of where you live)

You will not need a Director ID if you’re:

a company secretary but not a director
acting as an external administrator of a company
running a business as a sole trader or partnership
referred to as a ‘director’ in your job title but have not been appointed as a director under the Corporations Act
a director of a registered charity with an organization type that is not registered with ASIC to operate throughout Australia
an officer of an unincorporated association, cooperative or incorporated association established under state or territory legislation, unless the organization is also a registered Australian body

When do I need to apply?

If you became a Director on or before 31 October 2021 – You must apply by 30 November 2022

If you become a Director between 1 November 2021 and 4 April 2022 – You must apply within 28 days of appointment

If you become a Director from 5 April 2022 – You must apply before appointment

How do I apply?

Step 1: Setup MyGovID

How to Set up MyGovID

Step 2: Gather your documents

You will need the following information from the linked services in your MyGov account:

Your TFN
Your Residential address as held by the ATO
Information from two documents to verify your identity. These can include;

Bank account details
ATO notice of assessment
Super account details
a dividend statement
a Centrelink payment summary
PAYG payment summary

Step 3: Complete your online application

Apply Now with MyGovID

Our recommendation when applying

Whenever a new procedure like this is implemented, we make sure we test it ourselves so that we can assist you through this process as much as possible.

When completing his Director ID application, Mark Lawry found this application system to be poorly designed and the information matching was flawed to the point where he was locked out of the system for an hour!

The big problem lay when matching the PAYG Income Statements and Superannuation Fund Details.

Therefore, Marks recommendation when choosing the type of data to match is to use the following:

Notice Of Assessment: You will need the date of issue and ATO Reference Number which can both be accessed via MyGov.
Bank account details for any bank account that earned interest in previous years. You will need the BSB and Account Number.

Using your Director ID

When your Director ID is issued, please print it and keep it in a safe place and also send it to us via email admin@suntax.com.au and we will add it to your permanent records.

Viewing or updating your details
Using myGovID, you can log into the ABRS Online to view and update your Director ID details whenever you need to.

You can:

check your Director ID number and status – including when it was issued
view things to do, actions in progress and past activity
edit your profile preferences and some of your personal details

As this process must be completed through your MyGov account, this is unfortunately NOT a process that we can complete on your behalf, but if you do have any questions, Suntax is always here to help support you so please give us a call.

Kind regards,

Your Suntax Team

Frequently Asked Questions

What if I cannot apply online?

If you are unable to apply for your Director ID online, you can use one of the alternative options;

Apply by phone:
You will need your TFN and information needed to verify your identity (see step 2 under how to apply)
When you have the information, contact the ABRS
Contact ABRS

Apply with a paper form
Director ID – paper application form
*Note that this is a slower process, and you will need to provide certified copies of your identity verification documents.

Will my Director ID be available to the public?

No.

ABRS can only disclose your Director ID to

Someone you give permission to disclose to
Certain Commonwealth, State and Territory government bodies
Courts and tribunals

The law does not authorize ABRS to disclose director ID’s to the public without the director’s consent. For now, the director ID will not be searchable by the public. The Registrar will consult with the community about what details can be disclosed and searched I the future.

Following on from the recent construction shutdown, the Victorian Government has released a new grant to assist those construction businesses unable to attend worksites due to lockdown restrictions imposed from 21 September to 4 October 2021.

The grant amount is determined on payroll size:

$2000 for non-employing businesses
$2800 for employing businesses with an annual payroll below $650,000
$5600 for employing businesses with an annual payroll between $650,000 and less than $3 million
$8400 for employing businesses with an annual payroll between $3 million and $10 million

Please note: if you business has already received any of the following grants, your business will not be eligible for this grant.

Business Cost Assistance Program Round Two
Business Cost Assistance Program Round Two July Extension
Small Business COVID Hardship Fund

Businesses can apply when they meet all of the following criteria

The business must:

be located within Victoria (Regional businesses can apply if the construction site was in one of the areas listed below)
have an Annual Payroll of up to $10 million in 2019-2020 on an ungrouped basis
be registered for GST as at 24 September 2021
hold an up to date ABN registration as at 24 September 2021
operate in one of the business sectors listed in the eligible ANZSIC codes
have been contracted (prior to the restrictions being announced) to work or supply workers to a construction site in one of the following areas during the construction shutdown:

– Metro Melbourne

– City of Greater Geelong

– Mitchell Shire

– Surf Coast Shire

Employing business must also:

be registered with Worksafe Victoria

Non-employing businesses must:

hold a WorkSafe Construction Induction Training Card (White card or ‘ticket’) and these details must be supplied in the grant application

You can find out more at Construction Grant FAQ’s

How do I apply?

Easy Way – Let Suntax apply for the COVID Construction grant on your behalf by here. The cost to prepare this application is $450 plus GST, which is fully refundable if your grant application is not successful*

You can apply directly as a business owner via the Business Victoria website.

When do applications open and close?

Applications are open right now and will close on the earlier of Tuesday the 9th of November or when the program funds are exhausted.

The directors of Suntax would like to thank the people who make up our “Expert COVID Grants Team” for their late nights and awesome efforts in processing our clients’ grants. Overall, more than 99% of our clients have survived through the COVID lockdowns with the help of their hard work.

We are really looking forward to seeing our clients’ businesses open back up and getting back to some sort of normality. Please remember to support your local small businesses, they have all been doing it tough and they are the engine room and employers in our local communities.

All going well, Suntax is planning on returning to our offices on Friday November 5th and we look forward to seeing you all in person sometime soon.

The Suntax Team

Commercial Tenancy Rent Relief Scheme – TENANTS

The Victorian Government has issued new regulations to offer further relief for commercial tenants struggling with rent payments.

The scheme will help small and medium-sized businesses with an annual turnover of less than $50 million that have experienced a loss in turnover of more than 30 per cent during the pandemic.

Eligibility for rent relief has been broadened, with tenants now able to choose three consecutive months between 1 April and 30 September 2021 to compare to their turnover in the same three months in 2019.

Businesses will get financial relief in the form of a proportionate reduction in rent. For example, a business with a turnover of 40 per cent of pre-pandemic levels can only be charged 40 per cent of its rent. Of the balance, at least half must be waived, with the remainder to be deferred.

You can find more information on the scheme here: Commercial Tenancy Relief Scheme and Scheme FAQ’s

What Actions Do You Need To Take?

To receive a reduction in your rent you will need to action the following:

Send a letter to your commercial landlord. A template can be found here: Rent Relief Request Template

Complete a Statutory Declaration which can be found here: Victorian Statutory Declaration

Along with your letter and Statutory Declaration, you need to supply one of the following to confirm your reduction in turnover for three consecutive months between 1st of April 2021 and 30th of September 2021 compared to the same periods in 2019:

Reports from your accounting records showing evidence of your turnover comparison figures, or
Business Activity Statements showing evidence of your turnover comparison figures, or
Statements from your bank showing comparative reduced income, or
A statement from your Accountant showing evidence of your turnover comparison figures

If you are on Xero, here is a link to a 3 minute video to show you how to extract your reports to attached to your rent relief letter: Xero COVID Support Report Video

We believe most business owners will be able to prepare this information for the rent relief. If you do need our help, please call our office on 03 8746 7700 and you can book an appointment with one of our COVID Grant team experts. The fee for this work will be dependant on the level of help you need.

Commercial Tenancy Rent Relief Scheme – LANDLORDS

Landlords, you have not been forgotten. Landlords who have provided rent relief to their tenant will be eligible for land tax relief as part of the Victorian Government’s 2021 measures. These measures have not been confirmed but the expectation is that there will be a 25% reduction in land tax for those commercial landlords who provide this rent relief. Keep an eye on our socials for more detailed information once it is released.

Wishing everyone the best of health during these trying times. The full Suntax team are working from home to support you, please be kind to each other, look after each other and try have a laugh every now and then.

We are here for you.

The Suntax Team

In good news for Victorian Businesses, the Victorian Government has released its Small Business COVID Hardship Fund to assist small and medium businesses in need. This fund is for those businesses who didn’t qualify for the Business Cost Assistance Program funding. For this one, you can forget those ANZIC codes!

In an interesting turn of events, businesses are encouraged to compare their best consecutive two-week trading period between 27 May and 10 September 2019, with their worst consecutive two-week trading period between 27 May and 10 September 2021. This will open this grant to many more businesses than we originally expected.

Eligible businesses will receive a grant of $10,000

To be eligible for this funding applicants must:

Operate a business located within Victoria;
have experienced a reduction in turnover of at least 70% for a minimum consecutive two week period comparable to a benchmark period in 2019 as a direct consequence of COVID-19 restrictions since 27 May 2021;
have had an annual payroll of less than $10 million in 2019/20;
be registered for GST on and from 28th July 2021;
not have received any of the current Covid Business Cost Assistance Funding support packages launched on or after 27 May 2021, including: Business Costs Assistance Program Round Two, Licensed Hospitality Venue Fund 2021 or the Victorian Events Support Program.

Employing businesses must also:

be registered with Worksafe Victoria
attest that the business is supporting its workers to access any paid leave entitlements, or that if a person can work from home, to work from home during the COVID-19 restrictions, and supporting their casual workers, where possible.

How do I apply?

This fund is a little different to previous grants. To apply for this fund, your reduction in turnover needs to be demonstrated. This can be done via one of three different ways:

Easy Way – Let Suntax apply for the Small Business COVID Hardship Fund on your behalf by clicking here . The cost to prepare this application is $450 plus GST, which is fully refundable if your grant application is not successful*

You can apply directly as a business owner via Hardship Fund and have Suntax supply the required letter to complete your application. The cost to have your reports reviewed, verified and confirmed via letter is $330 plus GST*

You can apply directly as a business owner without verification from a qualified accountant or registered agent by registering your interest for the program via Hardship Fund. Applicants may receive an Invitation to Apply email from the department. Applications received via the Invitation to Apply process may take up to 25 business days to process, due to the need for additional verification measures

*Note: If you are not on Xero and need Suntax to analyse your fortnightly turnover decline to assess eligibility, you will need to provide backups of your files or log in details. the cost of the ‘non Xero’ assessments will be (an additional) $120 + GST. The only reason for this (extra) charge is that Xero has automated reports that help Suntax assess your eligibility, whereas all other programs do not have this automation.

Example of a business that has a 70% reduction in turnover because of these current Victorian lockdowns:

Jim Bob ran a business as an electrician. In the 2 weeks between 1 June 2019 and 15 June 2019, his business turnover was $100,000. Because of the Victorian lockdowns from the 27th of May 2021, he was unable to perform all his normal services. In the 2 weeks between 1 August 2021 and 15 August 2021 his turnover was only $26,000, resulting in a 74% reduction in turnover. The great news is that Jim Bob would be eligible for this $10,000 grant. It is important to note that we do not need to compare the same fortnights in 2019 and 2021 to be eligible for this grant.

We understand this additional funding will be a great relief to a lot of businesses who previously did not fit into the list of ANZIC codes required for the last few rounds of support.

Here at Suntax we once again would like to thank all of our team for their amazing support as they continue to work remotely through our busy ‘tax time’ period while also doing everything we can do to assist all of our clients with any Government Grants and other funding. As always, we are committed to helping you through this in any way that we can.

Stay safe & stay masked, we are almost there!

The Suntax Team

New Business Cost Assistance Program Round 3 – No action is required if you have already been receiving these payments

The Victorian Government will provide new cash grants for businesses affected by this latest August Lockdown.

If you were eligible and have applied for the Business Cost Assistance Program Grant in May-June 2021 or for the July Extension of this Grant, you will receive an additional payment of $2,800 automatically – NO FURTHER ACTION IS REQUIRED TO RECEIVE THIS PAYMENT

What if I haven’t applied for the Business Cost Assistance Program yet?

If you have not yet applied for this Business Cost Assistance program but your business is eligible you can do so now to receive both the July extension payment of $4,800 plus the above $2,800. Applications close on Friday the 13th of August.

The list of eligible businesses can be found here: Eligible businesses list.

How To Apply for the Business Cost Assistance Program:

Easy Way – Let Suntax apply for the Business Cost Assistance Program on your behalf by clickinghere. The cost to prepare this application is $220 including GST, which is fully refundable if your grant application is not successful.

Complete the application form yourself via Business Cost Assistance Program Round 2 July Extension Please note, that you will need to confirm that your industry code listed on the Australian Business Register matches the eligible industries for this grant. In order to confirm your industry code, you will need to link your MyGov ID to the Australian Business Register and check your businesses details.

Licenced Hospitality Venue Fund

If you were eligible and have been receiving the Licenced Hospitality Venue Fund you will receive additional payments of between $5,000 and $20,000 graded by venue capacity. These payments will be made automatically – NO FURTHER ACTION IS REQUIRED TO RECEIVE THIS PAYMENT

IMPORTANT: Other Support Payments For Employees

There is other support out there for employees. If you are affected by the lockdown restrictions you may now be eligible for support payments without the ‘assets test’ that had been previously applied. These payments start from the first day of lockdown and are payments of:

$600 for Victorian employees that lose 20 hours or more of work during the period of the lockdown
$375 for Victorian employees that lose between 8-20 hours of work during the period of the lockdown

All applications can be made through: Services Australia

We suggest you pass this information onto your employees if you think they might be eligible.

Once again please know that Suntax is with you as we navigate these testing times. We are ‘business as usual’ with our Virtual Google Meet’s and available on the phone. If there is anything at all that we can help you with please just reach out and let us know.

The Suntax Team

JobKeeper 2.0 – Don’t think you’re eligible? Think again. There are new Alternative Turnover tests which could mean you are

You will no doubt be aware that the JobKeeper scheme has been extended to 28 March 2021.

It has been widely publicised that in order to qualify for this JobKeeper 2.0 a business must have experienced a decline in GST turnover of 30% or more for the September 2020 quarter compared to September 2019 and then the December 2020 quarter compared to December 2019.

But what if you do not pass these tests? Does this mean your business will no longer receive JobKeeper?

MAYBE…… BUT MAYBE NOT

Fortunately, the answer is not a definitive NO. There is still the possibility of qualifying for JobKeeper 2.0 based on the ‘alternative turnover tests’ that the ATO have released.

The alternative turnover tests can be used to determine whether your business has experienced an ‘actual true’ decline in turnover. An example of this would be where the September 2019 quarter is not representative of your actual business performance.

We have listed below two of the alternative turnover tests that are available as well as an example to demonstrate the importance of reviewing all of your business data to seek the possibility of retaining JobKeeper 2.0 assistance.

While there are seven alternate tests available which may help your business JobKeeper 2.0 eligibility, the two selected below are the most widely used:

Irregular Turnover Test

This test can be used where:

The difference in your quarterly business income is more than 50% from the highest to the lowest quarter
between 1 July 2019 – 30 June 2020

The difference in your quarterly business income is more than 50% from the highest to the lowest quarter
between 1 March 2019 – 29 February 2020

Please note: you cannot use this test if your business income is seasonal

Substantial Increase in GST Turnover Test

This test can be used where:

Your business has had a substantial increase in revenue prior to the September 2020 quarter and therefore, doesn’t reflect an appropriate decline when comparing with the September 2019 quarter.

There are two parts (limbs) to this test.

If your business passes the first limb, it then needs to pass a secondary comparison (limb 2) to
become eligible for JobKeeper 2.0

Limb 1

This is used to test one of the following:

12.5% increase in revenue by comparing the 3 months ending June 2020 to the 3 months ending March 2020

25% increase in revenue by comparing the 6 months ending June 2020 to the 6 months ending December 2019

50% increase in revenue by comparing the 12 months ending June 2020 to the 12 months ending June 2019

Limb 2

Your eligibility is then confirmed by establishing a 30% decline in revenue by comparing your September 2020 quarter with either:

The June 2020 quarter

The 3 months from 1 December 2019 and 29 February 2020

Real life example

A client of Suntax that owns a florist business did not pass the basic JobKeeper 2.0 test and she was confident she wouldn’t be eligible for this JobKeeper extension because her turnover had not fallen by 30% in the September 2020 quarter compared to September 2019.

But, in May 2020 she had a spike in sales. This increase in sales was sufficient to qualify her business to apply one of the alternate testing methods – Substantial Increase in GST Turnover.

The results of this analysis allowed us to compare an alternative quarter’s drop in turnover, making her eligible for JobKeeper 2.0

Click here for Suntax to complete your JobKeeper 2.0 Alternative Testing

The costs to prepare this analysis and provide our expert opinion is $250 + GST.

We cannot guarantee that your business will qualify for JobKeeper 2.0 (even after analysing your data) however, we believe it is well worth the investment to exhaust all potential avenues to gaining this significant Government support.

____________________________________________________________________________________________________________

Additional Tests

The other five ‘Alternate Tests for JobKeeper 2.0’ are very specific to a business’s circumstances and would require even more detailed analysis. If any of these circumstances relate to your business, please call and book in a time to assess these tests with your accountant.

Business Commenced Test

Business Acquisition or Disposal that Changed the Entity’s current GST Turnover

Business Restructure that changed the Entity’s current GST Turnover

Business Affected by Drought or Natural Disaster

Sole Trader or Small Partnership with Sickness, Injury or Leave

You can find out more information on these additional tests here: Alternative Turnover Tests

Regards

Your Suntax Team

In great news for small businesses and employees, JobKeeper has been extended and new rules have been introduced – some which may impact your business now.

Below we will look at the items you need to know now in relation to the new rules.

There are 3 main changes for JobKeeper:

Effective Immediately: More Of Your Employees Are Potentially Eligible For JobKeeper

The immediate change is that the ‘eligible employee date’ has been moved from 1st of March to 1st of July 2020, resulting in many businesses having more employees eligible for JobKeeper from the 3rd of August 2020.

If you had part-time or full-time employees on the 1st of July 2020 that were not previously eligible for JobKeeper, they will now be eligible.

Likewise, if the 1st of July 2020 results in your casuals being employed by the business for a minimum of 12 months, they will now be eligible for JobKeeper, even if they were not eligible under the initial rules.

This change is effective for pay periods that end after the 3rd of August 2020, so this will impact payroll processing immediately. If any employees are paid less than $1,500 per fortnight, they will need to be topped up to $1,500 to be eligible.

From a payroll processing point of view, you will also need to enrol the employee within your payroll software. Please select Fortnight 10 as the start date for JobKeeper for these new employees in your STP enabled payroll software. For instructions on how to enrol employees in JobKeeper in Xero, please click this link Enrol employees for JobKeeper payments

JobKeeper Extended Past 28th of September 2020 With A Relaxed Turnover Test:

JobKeeper has been extended for the December 2020 and March 2021 quarters. In order to receive JobKeeper post 28th September 2020, new tests must be passed by the business.

To qualify for JobKeeper in the December 2020 quarter, businesses will need to demonstrate a decline of 30% in turnover in the September 2020 BAS compared with September 2019. This means that businesses that had experienced a rebound before the stage 4 restrictions won’t be penalised. This is welcome news for many of our clients.

In order to receive JobKeeper in the March 2021 quarter, the business will need to demonstrate a decline of 30% in both the September 2020 and December 2020 BAS’s compared to the same quarters in 2019.

Additionally, the only turnover test is the ‘actual GST turnover’ based on your quarterly turnover reported on your BAS’s. There is no ability to predict turnover or use monthly turnover assessments post 28th September 2020.

Reduced JobKeeper Payments AFTER 28th September 2020

If your business passes the above new turnover tests to receive JobKeeper post 28th of September, the JobKeeper rates have been reduced as follows:-

From 28th of September 2020 to 3rd of January 2021, the JobKeeper Payment rates will be:

$1,200 per fortnight for all eligible employees who were working in the business for 20 hours or more a week on average in the 4 weeks before either 1st of March 2020 or 1st of July 2020.
$750 per fortnight for other eligible employees and business participants who were working in the business for less than 20 hours a week on average in the 4 weeks before either 1st of March 2020 or 1st of July 2020.

From 4th of January 2021 to 28th of March 2021, the JobKeeper Payment rates will be:

$1,000 per fortnight for all eligible employees who were working in the business for 20 hours or more a week on average in the 4 weeks before either 1st of March 2020 or 1st of July 2020.
$650 per fortnight for other eligible employees and business participants who were working in the business for less than 20 hours a week on average in the 4 weeks before either 1st of March 2020 or 1st of July 2020.

Important note:

If you are not currently registered for JobKeeper but the new lockdown conditions will result in a 30% reduction in your business turnover, please call your accountant immediately to discuss your eligibility. You may still be able to apply for August and September 2020.

We really understand the impacts this second wave has had on businesses and the reintroduction of Stage 3 and the move to Stage 4 restrictions will impact almost every business in both Metropolitan Melbourne and Regional Victoria. Small business owners have shown their resilience and ability to overcome the obstacles that COVID-19 has thrown at them. We will get through this with the support of Government, banks, landlords and our support networks. If you are worried that you or your business will not get through this lockdown, we want to be your first point of call. We are here to support you and will do everything in our power to get you through this.

Stay strong and stay safe,

The Suntax Team

As you are probably aware, the Government have released a further $130 billion Economic Support Initiative with the main goal to keep employees on the books and engaged with their employers.

This is an exciting development for business owners and once again we have attempted to summarise the information all in one place for you.

What is a JobKeeper Payment?

The JobKeeper payment is a wage subsidy program introduced to support businesses significantly affected by COVID-19.

The payment is designed to help businesses cover the costs of their employees’ wages so that more employees can retain their jobs and continue to earn an income.

How does it work?

Eligible businesses will be able to access a wage subsidy of $1500 per fortnight before tax for eligible employees for a maximum of 6 months.

Your business will be considered eligible if:

You have an annual turnover of less than $1 billion and your turnover has or will be reduced by 30% to a comparable period a year ago e.g. March 2019 vs March 2020

You have an annual turnover of more than $1 billion and your turnover has or will be reduced by 50% to a comparable period a year ago e.g. March 2019 vs March 2020

Your employee will be considered eligible if:

they were employed by you on March 1st 2020

and

they are currently employed by the eligible employer including those who have been stood down or rehired
are full time, part time or long-term casuals (employed on a regular basis for longer than 12 months as at March 1st 2020)
are at least 16 years of age
are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) visa holder

and

they are not receiving a JobKeeper payment from another employer

How do I register?

Employers must elect to participate in the scheme.

You will need to Register your Intention to apply with the ATO from 30th of March here: JobKeeper Payment Registration. Within 24 hours, you will then receive a SMS message confirming your registration. Shortly after the legislation is passed, you will be requested to complete an online application.

You also need to notify all eligible employees that they will be receiving the JobKeeper payment. Please note at this stage there is no legislation to say you must participate in the JobKeeper scheme.

How Does A Sole Trader Apply?

Sole traders will also need to Register your Intention to apply with the ATO here JobKeeper Payment Registration

When does it start?

The subsidy applies to payments to employees from the 30th of March 2020 and the subsidy will be paid in the first week of May 2020.

How does it get paid?

The employee is still paid directly by the employer through their payroll system and employers will be reimbursed $1,500 per fortnight for each eligible employee, paid monthly in arrears.

Please refer to the examples at the end of this newsletter, but for general information this is how it will work:

If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income. The JobKeeper payment will assist the employer by subsidising $1,500 per fortnight of the employees wage. E.g. The employee usually receives $1,800 in wages per fortnight, the JobKeeper reimbursement will be $1,500, leaving the employer out of pocket $300.

If an employee ordinarily receives less than $1,500 in income per fortnight before tax, the employer must pay their employee the full $1,500 per fortnight before tax. Essentially meaning the employee gets a higher salary than usual.

If an employee has been stood down, the employer can choose to receive and pass on the JobKeeper payments of $1,500 to their employees.

Note: we have included examples at the bottom of the newsletter.

What about Superannuation?

Superannuation is to be paid based on an employee’s normal wage.

If an employee normally receives less than $1,500 the employer is only required to pay superannuation on their lower regular wage. They may choose to pay superannuation on the full $1,500 if they wish. Adjustments will need to be made to most employers payroll systems to be able to process this correctly.

JobKeeper vs JobSeeker

As employers you must advise your employees if you are applying for the JobKeeper payments for them.

Some employees may have already applied to Centrelink for JobSeeker payments and the Coronavirus Supplement. They will need to notify Centrelink as soon as they begin to receive JobKeeper payments as they may no longer be eligible for the income support through Centrelink.

EXAMPLES OF HOW THE JOBKEEPER PAYMENT WORKS FOR BUSINESSES:

Example 1.

Sarah runs a Sunbury florist. She is a sole trader and does not have any employees.

Sarah’s business has been going well for a few years but due to the Coronavirus her business turnover has fallen by more than 30% compared to the same month in 2019.

Sarah will be able to apply for the JobKeeper payment and will receive $1,500 per fortnight before tax (paid on a monthly basis)

Example 2.

Janet worked as a permanent part time personal trainer at an Essendon gym for six months but was made redundant on the 20th of March due to the Government directive to close gyms. She was not entitled to any redundancy pay due to her short length of service.

After the JobKeeper announcement the gym decided to re-hire Janet as they will be able to resume their operations once the Coronavirus restrictions on gyms are lifted.

Janet had applied for JobSeeker payments after being made redundant and was due to receive payments of $1,124 per fortnight. If she chooses to be re-hired by the gym, she will receive $1,500 per fortnight before tax under the JobKeeper plan. She will need to advise Centrelink of this income as she may no longer be eligible to receive the JobSeeker payment and the Coronavirus supplement.

Example 3.

Lovonne runs a Macedon Ranges Landscaping company and employs 5 full time gardeners. She currently pays them each $1,700 per fortnight before tax but has been expecting her turnover to decline rapidly over the coming months and has been considering laying off her staff or reducing their wages.

By receiving the JobKeeper payment Lovonne will be able to keep employing all five of her gardeners and only needs to provide the $200 wage cost per fortnight before tax per employee above the $1,500 per fortnight before tax JobKeeper payment.
Example 4.

Carolyn works in a retail store as a permanent part time employee who earned $1,100 per fortnight before tax. She was stood down without pay due to the coronavirus impact on the business and applied for Centrelink JobSeeker payments.

Carolyn’s employer has decided to apply for the JobKeeper payments for all of their employees. This would entitle Carolyn to receive $1,500 per fortnight before tax – more than her normal wage. Her employee must advise Carolyn that she has been nominated to receive the JobKeeper payment and Carolyn must advise Centrelink as she may no longer be eligible to receive the JobSeeker payment and the Coronavirus supplement.

Example 5.

Lauren runs a real estate agency with two employees. While the business is still running at this stage, she expects that her turnover will decline by more than 30% in the coming months.

Her employees are:

Rhonda who is a permanent full-time employee who earns $3,000 per fortnight before tax and Sam who is a permanent part-time employee who earns $1,000 per fortnight before tax.

Lauren applies for the JobKeeper payments from the Government. She continues to pay Rhonda her $3,000 per fortnight before tax as normal while receiving $1,500 per fortnight before tax to subsidise her salary and will continue to pay her superannuation on her income.

Lauren also receives $1,500 per fortnight before tax to subsidise Sam’s salary. She continues to pay Sam his $1,000 per fortnight before tax and an additional $500 per fortnight before tax totalling the $1,500. Lauren is required to continue to pay Sam’s superannuation based on his $1,000 per fortnight salary and has the option of paying superannuation for the additional $500 before tax.

We hope that the information provided here will assist you in understanding the new JobKeeper initiative. We welcome this initiative as it will help keep the employer and employee relationship during this downturn and will also allow for businesses to resume operations quickly when the businesses are in a position to re-open. It also provides that much needed ‘life-line’ for many businesses to continue operating their business and to continue employing.

As always, please contact us if you have any questions or wish to discuss any of the above matters further. Our full team are working remotely from home at the moment and have been conducting virtual meetings all week. Our phone system is set-up so our mobile phones have replaced our office desk phones so it is business as usual for Suntax. If you need to contact us, just call our normal phone number (03 8746-7700) and we will do everything we can to help you through this unusual time.