Registrations are now open for the JobMaker Hiring Credit – the federal government’s new wage subsidy scheme which incentivises businesses to employ additional jobseekers aged 16-35 years.
JobMaker aims to boost Australia’s economic recovery by creating new jobs and comes as JobKeeper is set to end on March 28.
It marks a notable shift in how the government aims to support businesses with stimulus packages. While JobKeeper helps to keep existing employees in their jobs, JobMaker encourages businesses to hire new additional employees.
If your business hasn’t registered for JobMaker yet, here’s what you need to know to take advantage of JobMaker:
How does JobMaker work?
Eligible employers can receive payment for up to 12 months for each new young person they hire between the JobMaker period of 7 October 2020 to 6 October 2021.
Employers will be paid $200 a week for each new employee aged 16 to 29 years and $100 a week for those aged 30 to 35 years who meet the eligibility criteria.
Employers will need to register with the ATO and make claims quarterly in arrears. Claims for the first quarter can be made from 1 February 2021.
The scheme is administered by the Australian Tax Office (ATO) and employers will need to report information about their entitlement quarterly through Single Touch Payroll (STP).
Annualised Salary Compliance Survey: Is your business compliant?
If you pay any of your staff a salary, it’s likely you may have new legal obligations regarding how salaries should be calculated and reported upon. Take this quick Annualised Salary Compliance Survey to understand if your business is impacted.
What are the JobMaker eligibility requirements?
It’s critical to carefully assess if your business and employees are eligible for JobMaker.
This was one of the key lessons of JobKeeper. Some businesses received overpayments – which they have been required to pay back – due to incorrectly self-assessing their business or employees.
To be eligible for JobMaker, businesses and not-for-profits must demonstrate that they have increased their employee headcount by at least one person since 30 September 2020. In addition, they must show that their payroll has increased for the JobMaker period, compared to the three months to 6 October 2020.
Employers must also:
- Have an Australian business number (ABN)
- Be registered for pay as you go (PAYG) withholding
- Have a minimum of one employee
- Report through STP
- Be up-to-date with its tax obligations
- Claim the payment in respect of an eligible employee
- Keep adequate records of the paid hours worked by the eligible employee
Employers must not be:
- A Commonwealth, state or local government agency, or a sovereign entity
- An entity that is in liquidation or has entered bankruptcy
- Subject to a major bank levy
- Receiving another Commonwealth wage subsidy (such as JobKeeper) at the same time as claiming a JobMaker payment
For an employee to be eligible for JobMaker, they must:
- Be aged 16-29 or 20 to 35 at the start of their employment
- Have worked at least 20 paid hours per week on average for the time they were employed over the JobMaker period
- Have commenced employment during the JobMaker period
- Be in their first year of employment with their employer, and employed for the quarterly period that their employer is claiming for them
- Have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least 28 consecutive days within the 84 days prior to being hired
Employees are not eligible if they are:
- An employee for whom the employer is also receiving another Commonwealth wage subsidy such as an apprenticeship or traineeship wage subsidy
- An employee for whom another employer is claiming the JobMaker Hiring Credit for
For more information on JobMaker eligibility criteria, please visit the Budget 2020-21 website.
How can your business register for JobMaker?
Your business can register for JobMaker through one of the following:
The next step is to report additional employees through your STP-enabled software. Your business will then need to claim the JobMaker payment every three months, from 1 February 2021 via one of the above avenues.
eBook: Guide to payroll compliance 2021
Download our ebook to get up to speed on the 3 biggest compliance obligations facing Australian businesses in the coming year. You'll also learn 5 tips to help stay on top of ever-changing compliance obligations.
Subscribe to The Access Group newsletter
Effective 1 June 2021, Sage’s accountant and payroll solutions in Australia will be sold to The Access Group. If you would like to continue to receive valuable content such as this to optimise your practice or business, please subscribe to The Access Group newsletter.