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JobMaker Hiring Credit

By Tyler J. Wise|November 29th, 2020|Blog|

Given the current climate, and Governments’ eagerness to assist taxpayers through these uncertain times, it seems only reasonable that the JobMaker initiative has piqued taxpayers interests. However, it should be noted from the outset, there are conditions that need to be satisfied in order to receive JobMaker payments, which from an employer perspective are:

•    Not be a ‘major bank’
•    Have an active Australian Business Number
•    Be up to date with all tax lodgement obligations
•    Already be registered for PAYGW
•    Be actively STP compliant

Should you, as an employer satisfy these requirements, and you actively increase your employee headcount from 7th October 2020 to 6th October 2022 you may  become eligible for either $200 per week or $100 per week, depending on the employee, and the amount paid to the employee. The JobMaker credit cannot exceed the amount actually paid to the employee, and in that regard is different to JobKeeper, with no top-up payment required.

One important matter to be aware of, and one that many taxpayers seem to be glossing over is that in order to qualify for the JobMaker Hiring Credit you cannot be receiving JobKeeper, and you cannot, as an employer obtain the JobMaker Hiring Credit for employees that you are claiming relief for under the federal government apprentice/trainee subsidy.

Assuming, as an employer you are eligible for JobMaker Hiring Credit, the employee requirements are:

•    Must commence employment with you between 7th October 2020 and 6th October 2021
•    Be between the ages of 16 and 29, for the full credit; and 29 and 35 for the partial credit
•    Work a minimum of 20 hours per week over the relevant 3 month period.
•    Have been eligible for JobSeeker, Youth Allowance or Parenting Payment for at least 28 consecutive days during the 84 days prior to the commence date of employment.

Much like JobKeeper, the administration of this hiring credit will be maintained by the ATO, with claims made quarterly from February 2021. To ensure the integrity of the program, a further similarity to the prior concessions is that an employee will be required to notify their employer on commencement that they are an eligible employee under the scheme; and will also disclose they have not provided a secondary declaration to another employer.

Further integrity measures include the following exclusions:

•    Sole Trader – any relative of the sole trader
•    Partnership – a relative of a partner (with a wider expansion for corporate partners)
•    Trust – a trustee of beneficiary of the trust, including relatives.
•    Company – a shareholder or director, including relatives.

Much like with the prior COVID-19 concessions provided by the Government, we anticipate a strong (delayed) compliance review by the ATO, so maintain adequate records, and verify the eligibility of all employees and your entity itself prior to receiving any benefits. Information can be located direct from the ATO, or alternatively, please reach out for assistance from the team at Wise Accounting.

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