5. Other Specific ATO - JKP guidelines

What if I have stood down an employee without pay under the Fair Work Act 2009?
These employees may still be eligible for JKP provided they meet the eligibility criteria and were still employed by you as at 1/3/2020. You will need to pay a minimum of $1,500 per fortnight from the date of re –employment to receive the JKP.

 What if I have terminated an employee after 1 March 2020?

You can re-engage a terminated employee and they will be eligible if they met the eligibility criteria as at 1 March 2020.

You will need to confirm they want to be re-hired by you and participate in the JKP with you. Ask them to complete a JobKeeper Employee Nomination Notice and return it to you. Commence paying the minimum $1,500 per fortnight and you then claim for the JKP.

Note: you cannot claim any JKP in relation to employees who were terminated prior to 1/3/2020 even if you re-hire them.

Is JKP income to the employer?
Yes. The ATO payment of a JKP is assessable income to the employer and the employer claims the amount paid to the employee as a deductible expense.

Does a JKP include GST?
No. The JKP is not subject to GST.

 Do I pay the 9.5% super guarantee charge on the JKP paid to the employees?
The normal 9.5% employer super contributions apply to the normal gross wage paid to an employee. There is no extra employer obligation to pay the 9.5% super guarantee charge on a JKP amount which exceeds the normal gross wage for the employee.

 Can I keep the excess JKP above an employee’s normal gross wage?
No. The JKP is paid from the ATO to the employer to pass onto the eligible employee. If the eligible employee normal wage is below the JKP of $1,500 per fortnight they are entitled to be paid the full $1,500 per fortnight. If an employee’s normal wage exceeds the JKP the employer uses the JKP to assist paying the normal wage to the employee.

Is the JKP before tax or after tax?
The JKP is a before tax amount. The ATO pay as you go (withholding) tax rates apply.  The employer retains the appropriate PAYGW amount from the $1,500 per fortnight when paid from the employer to the employee.

If my private practice has multiple business structures can I assess the decreased turnover test including all structures as a single entity?
No. The JKP turnover test is applied to each individual employer entity. The turnover test only includes the turnover of the employer entity, not the other entities in the practice structure.

 What if my turnover increases in the following months after passing the 30% decrease in turnover test?
You continue to qualify for the JKP. It is only a change in eligible employees which effects ongoing JKP amounts.

What if I have not been operating for 12 months?
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (for example, if there was a large acquisition, they were newly established, were scaling up, or their turnover is typically highly variable), the ATO will also have discretion to set out alternative tests that would establish eligibility in specific circumstances.