JobMaker Hiring Credit Rules & Registration Now Available
Following our earlier post about the JobMaker Hiring Credit from 7 October 2020, we now can provide an update about the specific details of the program and how it will operate.
The JobMaker Hiring Credit is designed to provide a monetary incentive for up to 12 months to those employers who employ additional eligible employees aged between 16 and 35 years of age during the period 7 October 2020 – 6 October 2021, and who experience a corresponding increase in their total payroll expense.
While registrations with the ATO for the JobMaker program are now open, no claims can be made until 1 February 2021 at the earliest, meaning that there is no need for employers to rush into any decisions or actions before the end of the year.
How Do I Know if I Am Eligible to Claim the JobMaker Hiring Credit?
As an employer, you will be eligible to claim the JobMaker Hiring Credit for a JobMaker Period if you can answer YES to each of these statements:
- The employer had an ABN and was registered for PAYG Withholding during the relevant JobMaker Period.
- The employer is not entitled to receive any JobKeeper payments during the relevant JobMaker Period.
- As at each claim date, the employer’s Income Tax Return and BAS filings for the previous two years are all lodged with the ATO.
- The employer is not a major bank, government agency or entity in liquidation/bankruptcy.
- The employer has employed an additional employee on or after 7 October 2020 but no later than 6 October 2021, and the additional employee is aged between 16 and 35 years of age on the date of commencing employment.
- The additional employee’s average hours of work (including paid absences) across the JobMaker Period is equal to or greater than 20.
- The additional employee is not a related party of the employer (e.g. a trustee, beneficiary, shareholder or director of the employer entity, or a relative of these parties).
- In the six months immediately preceding 6 October 2020, the additional employee was not engaged otherwise by the employer to perform substantially similar duties (e.g. as an independent contractor).
- For a period of 28 consecutive days within the 84 days immediately preceding employment commencement, the additional employee received either:
- Parenting Payment;
- Youth Allowance;
- Jobseeker Payment.
- Importantly, the additional employee has given the employer a completed JobMaker Hiring Credit Employee Notice, confirming the employee’s eligibility: https://www.ato.gov.au/assets/0/104/300/362/a8eabf8b-da41-4388-926f-370be7e46d5e.pdf.
Eligibility for each JobMaker Period is assessed independently, so just because you do not qualify initially does not mean that you are excluded from the entire program.
JobMaker Periods & Claim Periods
The program is divided across eight quarterly JobMaker Periods in which the JobMaker Hiring Credit is calculated, with a corresponding Claim Period aligned with each JobMaker Period. The Claim Period is the time within which an employer must submit a form to the ATO (through its online services) in order to receive the JobMaker Hiring Credit for the relevant JobMaker Period.
The breakdown of the JobMaker Periods & Claim Periods is as follows:
|JobMaker Period||Claim Period|
|1||7 October 2020 – 6 January 2021||1 February 2021 – 30 April 2021|
|2||7 January 2021 – 6 April 2021||1 May 2021 – 31 July 2021|
|3||7 April 2021 – 6 July 2021||1 August 2021 – 31 October 2021|
|4||7 July 2021 – 6 October 2021||1 November 2021 – 31 January 2022|
|5||7 October 2021 – 6 January 2022||1 February 2022 – 30 April 2022|
|6||7 January 2022 – 6 April 2022||1 May 2022 – 31 July 2022|
|7||7 April 2022 – 6 July 2022||1 August 2022 – 31 October 2022|
|8||7 July 2022 – 6 October 2022||1 November 2022 – 31 January 2023|
Before an employer can make a claim for the JobMaker Hiring Credit, the employer must register its intent to claim with the ATO through the ATO’s online services. This registration must be completed before the end of the employer’s first applicable Claim Period.
In this registration, an employer will need to declare:
- The total number of employees employed as at 30 September 2020 (the “baseline headcount”);
- The total payroll for the quarter up to 6 October 2020 (the “baseline payroll amount”).
Because the baseline payroll amount needs to be comparable with the total payroll reported in each JobMaker Period, the number of days considered within both periods needs to be the same. This means that the baseline payroll amount is subject to change depending on which JobMaker Period is being considered. Therefore, for ease of reporting in the first period, it is recommended that employers consider the period 7 July 2020 – 6 October 2020 when determining the baseline payroll amount, as this period of 92 days exactly matches the 92 days which fall within the first JobMaker Period.
Claiming the JobMaker Hiring Credit
For each JobMaker Period, an online form needs to be lodged with the ATO before the end of the corresponding Claim Period.
As part of this form, the following information will need to be declared:
- The baseline payroll amount, if it changes from the amount declared as part of the initial registration;
- The total payroll amount for the relevant JobMaker period;
- The total number of employees employed at the end of the JobMaker period.
The online form also will rely upon information submitted to the ATO via Single Touch Payroll (STP), including primarily the dates on which eligible employees commenced and/or ceased employment. It is imperative therefore that employers ensure that their outstanding STP filings are lodged with the ATO at least three days before the end of each Claim Period.
Once the online form is submitted, the ATO will calculate and pay the JobMaker Hiring Credit to the employer. The amount of the credit depends on the number of additional employees throughout the relevant JobMaker Period compared to the baseline headcount, along with the ages of the additional employees ($200 per week for employees aged 16-29 year and $100 per week for employees aged 30-35). However, the credit will be capped at the value of the increase in the total payroll for the JobMaker Period over and above the baseline payroll amount.
What Do I Do Next?
Like the JobKeeper program, the JobMaker program is new and the details are complicated. The first step for any employer is to assess its potential eligibility to claim the JobMaker Hiring Credit in the first JobMaker Period.
The Macro Group team is available to assist you assess your eligibility and navigate the complexity. As your Tax Agent, we also are able to assist you lodge the registration and quarterly claims with the ATO if you need our support.
If you need assistance understanding or actioning this new program, do not hesitate to call us on 07 3844 5555 to discuss with a Macro team member today.
Date published: 11 December 2020.