Client Login

JobMaker Hiring Credit

November 23, 2020

As part of the 2020-21 Federal Budget, the Government has pledged $4 billion towards a JobMaker Hiring Credit (JobMaker) payment for businesses that is designed to accelerate employment growth among the younger population.

Payment Amounts and Time Periods

JobMaker payments will benefit eligible employers and employees as follows:

Age Range

Applicable Rate

16 to 29 years old at time of employment

$200 per week

30 to 35 years old at time of employment

$100 per week

 

There will be 8 total JobMaker periods that each last for 3 months, beginning 7 October 2020 and finishing 6 October 2022. The full list of JobMaker periods are below:

  • JM1 — 7 October 2020 to 6 January 2021;
  • JM2 — 7 January 2021 to 6 April 2021;
  • JM3 — 7 April 2021 to 6 July 2021;
  • JM4 — 7 July 2021 to 6 October 2021;
  • JM5 — 7 October 2021 to 6 January 2022;
  • JM6 — 7 January 2022 to 6 April 2022;
  • JM7 — 7 April 2022 to 6 July 2022; and
  • JM8 — 7 July 2022 to 6 October 2022.

For any single employee, the JobMaker payment will only be applicable for 12 months, despite the payment being available until 6 October 2022.

Eligibility Requirements

The JobMaker eligibility is quite extensive and unlike the JobKeeper payment, will not require a decline in turnover test. However, the following requirements must be satisfied:

  • Elect to participate in JobMaker, by the end of the relevant JobMaker period.
  • Carry on a business in Australia (or be a deductible gift recipient or a non-profit body that pursues its objectives principally in Australia).
  • Have an ABN.
  • Be registered for PAYG withholding.
  • Have lodged all income tax returns & activity statements that were due in the two years immediately preceding the time of the JobMaker claim.
  • Not be subject to the major bank levy or be a member of a consolidated group that is, a Commonwealth, state or local government agency (or wholly owned by such agency), a sovereign entity, in liquidation or entered bankruptcy; and
  • Not be entitled to receive a JobKeeper payment in respect of an individual for a JobKeeper fortnight that begins during the JobMaker period. However, an overlap rule permits an entity to end its participation in JobKeeper where the JobKeeper fortnight ends during a JobMaker period.

Requirements of employment

The employer must take on one or more additional employees who;

    • Commenced employment with the employer between 7 October 2020 and 6 October 2021 (inclusive), and no more than 12 months before the start of a JobMaker period.
    • Received parenting payment, youth allowance or JobSeeker for at least 28 consecutive days during the 84 days (4 out of 12 weeks) before they commenced employment with the employer.
    • Are aged 16 to 35 at the time they commenced employment with the employer
    • Work an average of 20 hours in each week that they are employed by the employer during a JobMaker period. Adequate records must be kept by the employer.
    • Give the employer a notice that they satisfy the age and pre-employment requirements.
    • Confirm they have not given another entity a notice that they wish to participate in the JobMaker program.
    • Are not ‘excluded employees’
      • Relatives of sole traders and partners, shareholders in or directors of companies, trustees or beneficiaries of trusts, and the relatives of such shareholders, directors, trustees or beneficiaries. The specific exclusion depends on the entity making the JobMaker claim.
      • An individual who, in the 6 months from 6 April 2020 to 6 October 2020, was engaged by the entity as a contractor or subcontractor where they worked in a substantially similar role or performed substantially similar functions or duties.
    • The entity’s total employee headcount must increase by reference to the number of employees employed on 30 September 2020. This will be overridden by each JobMaker period as they end. This will only apply to the first 4 periods, the final 4 will require a different headcount eligibility requirement.
    • The entity is required to increase its total payroll amount to prevent employers manipulating the payroll (for example, reducing the hours of an existing older employee). The total payroll in a JobMaker period is compared with the baseline payroll amount, based on a reference period ending on or immediately before 6 October 2020.
    • Employers are also required to determine the ‘headcount amount’ which is designed to ensure that the maximum amount is payable to employers where there are periods of partial employment, thus saving the employer from having to determine the most efficient combination of eligible employees within their headcount for a period. The amount of JobMaker is the lesser of the headcount amount and the payroll amount.
    • The employer must notify the commissioner by the end of the JobMaker period of their choice to participate in JobMaker.
    • The employer is required to provide the Commissioner with certain information when determined by a way of legislative instrument.

JobMaker Particulars

Note that employers do not need to be registered at the time of hiring an employee in order to be eligible for JobMaker.

Employers will also be able to claim JobMaker in arrears from the ATO.

Registrations will open for eligible employers through ATO online services from 7 December 2020 and claims will be able to be submitted from 1 February 2021. Employers will have three months to submit claims following the opening of the claim period.

If an employer is to create a new business after 30 September 2020, they will not be able to claim JobMaker for the first employee. However, the second and each subsequent employee will be able to be covered under the JobMaker scheme, provided they meet the eligibility requirements.

It has also been indicated that employers will be required to repay any overpayments of JobMaker.

Alternatives

If an employee is eligible for the apprentice/trainee wage subsidy (equal to 50% of an eligible apprentice or trainee’s wages paid until 31 March 2021), then this may be more effective or more easily accessed than JobMaker.

What isn’t clear

It is still subject to clarification by the ATO as to whether the tax treatment of JobMaker payments will be subject to GST, constitute ordinary income that is included in the entity’s assessable income, and whether it will form part of the entity’s aggregated turnover.

We are here to help

If you need assistance with determining JobMaker eligibility, pay rates or have questions about the JobMaker Hiring Credit, contact our friendly team today.