JobKeeper Part 4 – Paying Wages and Superannuation
In our part 1 article we listed six steps to apply for JobKeeper (Part 1 Jobkeeper). In this article, we will summarise how to meet the wage condition in Step 3.
For this article, please ensure you are an eligible employer (Step 1) and you have identified your eligible employees and received a nomination notice from them (Step 2) prior to proceeding to this step.
Work out which fortnight you will be an eligible employer:
There are 13 fortnights each with a unique code that will be critical for applying the JobKeeper program;
These fortnights are:
|Period||Start Date||End Date|
|01||30 March 2020||12 April 2020|
|02||13 April 2020||26 April 2020|
|03||27 April 2020||10 May 2020|
|04||11 May 2020||24 May 2020|
|05||25 May 2020||07 June 2020|
|06||08 June 2020||21 June 2020|
|07||22 June 2020||05 July 2020|
|08||06 July 2020||19 July 2020|
|09||20 July 2020||02 August 2020|
|10||03 August 2020||16 August 2020|
|11||17 August 2020||30 August 2020|
|12||31 August 2020||13 September 2020|
|13||14 September 2020||27 September 2020|
You need to determine which fortnight you will start in the JobKeeper program and make the appropriate notifications to the Commissioner. (Additional information will be provided regarding notifications in an additional article).
From that fortnight onwards you will be required to meet the “wage condition” to be eligible for Jobkeeper Payments.
Meet a wage condition for each eligible employee for that fortnight onwards:
In order to meet a wage condition, an employer must pay each eligible employee at least $1,500 in that fortnight. The following table provides a high level summary of the amount to pay:
|Employee’s Status||Amount to Pay||Superannuation Guarantee?|
|Employee is working|
||Actual Hours worked x normal hourly rate||Yes|
||Actual Hours worked x normal hourly rate
|Top up amount to get to $1500 per fortnight||No|
|Employee is not working (eg stood down)|
||$1,500 per fortnight||No|
|Employee is on paid annual or sick leave|
||Hours x normal hourly rate||Yes|
||Hours x normal hourly rate
|Top up amount to get to $1500 per fortnight||No|
While employees remain eligible the wage condition must be satisfied for all eligible employees each fortnight. This continues for all employees and employers during the JobKeeper program. Note that employees can cease to be eligible if;
- They cease to be employed by you (e.g. they find another job or their job is terminated).
- You notify the commissioner that you want to leave the program.
The employer cannot choose which employees are paid. All eligible employees must be paid the required wage condition each fortnight. Some complex businesses, for example with certain awards, overtime arrangements, bonuses etc, may need to pay additional amounts and you will need to obtain specific advice on pay amounts. Employers cannot reduce hourly pay rates during this period although hours can be reduced either with agreement or by the employer making a JobKeeper Enabling Direction.
The following amounts can be used to satisfy the minimum $1500 wage condition:
- Salary, wages, commission, bonuses or allowances;
- Salary sacrifice employer contributions to a superannuation fund
- Other amounts applied to or dealt with in any wage agreed to with the employee.
PAYG Tax is required to be withheld from the payment.
It does not matter if your payroll period does not align with the above fortnights. The employer just needs to meet a wage condition in each fortnight.
If you normally pay your payroll weekly on a Wednesday – if you pay your employee $750 on 1 April and 8 April, you will meet the wage condition of paying an employee $1500 in fortnight 01.
If you normally pay your payroll fortnightly on an alternative Friday – if you pay your employee $1500 on 10 April, you will meet the wage condition for fortnight 01.
For April it is acceptable that you might not have paid the $1500 in the first fortnight, you are able to make corrections in the period to 30 April 2020 to rectify any shortfall. Also, it might be necessary to make an adjustment in the final fortnight to ensure you don’t overpay your employees by paying more than 13 x $1500.
Pay the required superannuation guarantee contributions:
The Superannuation Guarantee rules have not been amended, however, based on guidance, our position is that superannuation guarantee payments are required to be paid for normal wages for employees in respect of work done and that superannuation guarantee payments are not required for any additional or top up payments required as a result of JobKeeper. This is summarised in the table above.
Please ensure that superannuation guarantee amounts are paid to the required superannuation funds or clearing houses no later (preferable 3 to 4 days before) than 28 April for the March quarter, 28 July for the June quarter and 28 October for the September quarter. There is no ability to get these dates extended under any circumstances. If you cannot pay your superannuation payments on time, please contact us.
Frequently Asked Questions
- When will I receive the JobKeeper reimbursement from the Government?
Provided you meet all of the relevant criteria and have made all of the relevant notifications, you will receive the following amounts per employees:
|Payment Date||Amount per employee|
|14 May 2020||$3,000 – fortnights 1 and 2|
|14 June 2020||$3,000 – fortnights 3 and 4|
|14 July 2020||$3,000 – fortnights 5 and 6|
|14 August 2020||$3,000 – fortnights 7 and 8|
|14 September 2020||$4,500 – fortnights 9, 10 and 11|
|14 October 2020||$3,000 – fortnights 12 and 13|
- What if I terminate an employee?
If you terminate an employee while you are on the JobKeeper program it is our position that you calculate their termination pay in accordance with normal rules without regard to the additional top up payments and notify the commissioner in the relevant fortnight that the termination occurred. There is no requirement to continue to pay the employee under the JobKeeper program after they have been terminated. Please note – termination is different to “stood down”. Employees that have been “stood down” are still employees.
- I have stood down an employee do I need to start paying them again if I want to receive JobKeeper?
Yes. All eligible stood down are required to be paid under JobKeeper unless they have been officially terminated.
- What if I terminated an employee and now want to rehire them and pay them under this program?
This is allowed but not compulsory. Provided the employee meets the eligibility criteria and was a permanent, or long term casual on 1 March 2020, you can rehire them and pay them under the JobKeeper program. However, if you have paid that employee their annual leave, long service leave and redundancy pay we do not believe you can ask for those funds back and it is our view that leave periods begin recalculating. However, this is complex situation and you should get specific advice.
- What if I have a long-term casual that meets the eligibility criteria but I have no hours for them?
It is our view that these employees must be paid under the Jobkeeper program unless they have been officially terminated.
- How do I process this in my payroll?
It will be important for each payroll payment that you make under the STP (single touch payroll) system for each employee includes the following information is provided to the ATO:
- Relevant starting fortnight code
- Eligible jobkeeper top up allowance code with and without Superannuation. Each payroll system will do this differently. Please refer to some common links below:
If you are an ADP customer, we have specific information for you, or please log into your ADP portal.
You can correct payments in April up to 30 April.
- How do I accrue Annual Leave and Long Service Leave for JobKeeper payments?
It is our position that leave will only accrue for normal working hours not additional jobKeeper payments.
- Have the employment laws changed?
Yes, there have been a number of changes to the Fair Work Act and certain awards. Please refer to this website https://coronavirus.fairwork.gov.au/ and seek legal advice if required.
- My employee has applied for JobSeeker and does not want to receive JobKeeper?
If the employee does not give you a nomination notice, https://www.ato.gov.au/uploadedfiles/content/cr/d1aab7f2-fbe8-44b8-9ec1-4885ded1088e.pdf they are not eligible for JobKeeper.
If they received JobSeeker and JobKeeper they may need to pay back the JobSeeker – see here for more information. https://www.ato.gov.au/general/jobkeeper-payment/employees/how-the-jobkeeper-payment-affects-income-support-payments/
- Can I receive the Apprentice and Trainee Subsidy and JobKeeper at the same time?
No, you cannot claim both. You will need to assess which program is better on a case by case basis. https://docs.employment.gov.au/system/files/doc/other/qa_supporting_apprentices_and_trainees_and_the_jobkeeper_payment_01042020_dese.pdf
We trust this information is of assistance and understand this is a confusing and difficult time for employers. We believe the JobKeeper program provides an excellent source of crisis funding to small businesses and although it is complex, we can work through each step with you to ensure you receive the maximum amount of funding to keep your business operating.
Please call us at any time for assistance.
Date published: 20 April 2020