What a week this week was! Some of the information that I am going to share with you now was provided to me as late as Thursday and in the accountants world (yes, picture thousands of accountants hidden behind screens geeking out about JobKeeper) there is SO MUCH DEBATE about some of these things and there is still alot of information that we are waiting on from the ATO including further clarification.
But that aside, JobKeeper opens for enrolment on Monday. Yes, Monday April 20th. For employers and the self employed who pay themselves wages, the process is pretty clear but for the self employed (including sole traders) who do not pay themselves wages – there’s going to an online form on the ATO website for this process. The process which begins on Monday.
If I am honest, JobKeeper is pretty complicated but it’s going to be pretty awesome for some clients. I encourage every single business owner to get across the JobKeeper information and check if you believe this is available to you and if you do – find out all of the details. The devil is in the details in this process because if you get this one wrong, the penalties are super harsh.
So far, everyone should have registered and then from Monday, everyone can ENROL. The process for applying for employers with employees and self employed is different. If you are self employed but pay yourself as an employee then it is more simplistic to put yourself in the employee category for the purposes of JobKeeper. However, it will be worth reviewing the self employed category if you also have another family member or business partner who is actively involved in the running of the business as you may be eligible to make a claim for them under the self employed category.
Before you enrol – please be aware that it is not mandatory to participate. This is an “opt in” situation.
- Please review your eligibility for JobKeeper. If eligible then –
- Notify your employees you intend to participate
- Provide your employees with a JobKeeper Employee Nomination Notice They will need to complete this and return it to you and this should be kept on their employee file
- You will then need to review your payroll, make decisions about backpaying your employees for JobKeeper (concession only available until the end of April) and/or begin paying $1,500 to each eligible employee per JobKeeper fortnight.
- Enrol for JobKeeper from April 20, 2020
- Applications for claim don’t open until May 4th however there is lots to be done prior so please don’t ignore JobKeeper until then or you will find yourself not eligible.
How do I enrol?
On Monday – self employed will hopefully have a form on the ATO website that they can use to enrol. For all employers will employees, you need to either do this yourself on the business portal or use a tax agent (that’s us!) If you do not have the business portal but wish to do this yourself then check here for information. Anyone who hasn’t yet moved from the auskey to MygovID should also follow these instructions. Warning: I have heard that this is becoming difficult to setup at the moment and recommend that you try this at low peak times.
Why is this so complicated?
I genuinely believe that there will be clients who are eligible for JobKeeper and will miss out because the information has not been able to be clearly laid out all at once due to the timing of the release. There are varying rules and processes between Employers who pay wages and Self Employed and some people will fall into both categories and may have to do both processes.
The ATO is working extremely hard in the rollout and implementation of this system but the constant update of information is really hard to keep track of. This is going to mean that at some stage people are going to think they know whats going on and then miss important updates that could effect their eligibility. A great example of this is me! I logged off around 7pm last night and at 8:30pm got notification there had been an update to an area of “uncertainty” by the ATO that was going to change the eligibility for some of my clients (in a wonderful way!)
As JobKeeper is a reimbursement system, there is a risk of paying employees prior to the ATO reimbursing you and the risk is on the Employer – not on the employee. If you choose to pay the employee and then find out later, you were not eligible for JobKeeper – this is a huge financial outlay. Given that we know that staff who are currently paid less than $1,500 per fortnight must receive the full amount for the employer to be eligible – there is also some uncertainty regarding the treatment of the top up wages for Workcover and payroll tax thresholds. This could end up being quite costly for the employer. Leave and superannuation issues also need to be considered.
Finally, the penalties for getting this wrong are what I would call – on the harsh side.
The IQ team has prepared a JobKeeper supplement that we will be making available to all clients. The JobKeeper supplement sets out in a step by step process for both employers with employees AND the Self Employed (including sole traders) how to navigate the process and obtain the payments. For anyone who has already purchased the Business Action Plan, this has been provided to you as a complimentary addition. The cost of the JobKeeper supplement is $195. We are also doing our COVID rate e-meetings and phonecalls. I really encourage clients (especially those who are self employed) to review the JobKeeper information carefully as there will be many clients who will be able to access these funds (up to $19.500/eligible employee or business person) – we are here to help you.