Advivo Business Advisors and Accountants, share insights on the benefits of JobMaker for small businesses.
The JobMaker Hiring Credit was designed to help accelerate growth in employment of young people during the COVID-19 recovery, helping them access job opportunities as the economy recovers.
The government designed the Jobmaker scheme to encourage businesses to employ additional job seekers aged 16 to 35 years and is available for eligible employers who create new positions for eligible young people between 7 October 2020 and 6 October 2021.
Aimed not only to those who are continuing with a business but also to those who are intending to start a business (meeting eligibility requirements), the benefits of JobMaker for small businesses are:
- Easier to invest
- Ability to create jobs
- Improve ease of doing business
- Seize opportunities
- Support economic activity
How much is it worth?
The JobMaker Hiring Credit is worth up to $10,400. Employers will be credited up to $200 a week for additional employees aged 16 to 29 years and up to $100 a week for those aged 30 to 35 years who meet the eligibility criteria.
To be eligible for the JobMaker Hiring Credit, the employee must be in an additional job created from 7 October 2020 and the new employee must have received JobSeeker, Parenting Payment, or Youth Allowance (but not for study) for at least 28 consecutive days in the prior 6 weeks to employment. To demonstrate that the job is additional, specific criteria must be met.
The additional criteria required is that there is an increase in:
- the business’ total employee headcount from the reference date of 30 September 2020; and
- the payroll of the business for the JobMaker period, as compared to a three month baseline period to 6 October 2020.
The amount of the Hiring Credit claim cannot exceed the amount of the increase in payroll for the reporting period. Total employee headcount on 30 September 2020 and payroll in a three month period up to and including 6 October 2020, which is equal to the number of days in the claim period, represent the baseline values for the employer.
Employers are eligible to receive the JobMaker Hiring Credit if they:
- have an Australian Business Number (ABN);
- are up to date with tax lodgement obligations;
- are registered for Pay As You Go (PAYG) withholding;
- are reporting through Single Touch Payroll (STP);
- meet the additionality criteria;
- are claiming in respect of an eligible employee; and
- have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of.
Businesses hiring their first employee
If a business is newly established or has no employees as at 30 September 2020, they can claim the credit for any new eligible employees hired between 7 October 2020 and 6 October 2021, providing eligibility criteria are met.
How is the claim made?
- Employers firstly must register for the JobMaker Hiring Credit through their ATO online portal or their registered tax or BAS agent.
- Secondly, employers need to identify, nominate and report eligible additional employees through their STP-enabled software.
- The claim can then be made by the employer every three months from 1 February 2021 through ATO online portal or registered tax or BAS agent.
Employers are obligated to report through Single Touch Payroll (STP), with the following details to be reported:
- Tax file number (TFN)
- date of birth.
- full name.
- start date of employee (if occurring in the JobMaker period)
- end date of employee (if occurring in the JobMaker period)
- whether your employee met the hours requirement.
As the information is used to populate the claim form and in calculating the employer’s claim, a JobMaker Hiring Credit payment claim cannot be made until it is provided to the ATO through STP. This information will be populated in the claim form within 72 hours and used to calculate the employer’s claim.
Employers that are exempt from STP are to provide the above required information when making a JobMaker claim. They must be up to date with their PAYG withholding obligations due in the two years ending on the last day of the JobMaker period before making the claim. Generally, this will mean that the employer’s Business Activity Statement lodgments will need to be up to date.
The information for a JobMaker period must be submitted during specified corresponding claim periods, which are outlined on the ATO website.
Some points to remember
- Each period the employer’s employee headcount and payroll must remain higher than they were as at 30 September 2020 for them to remain eligible for the credit
- The credit payments can only be received for up to 12 months for each additional position created
- The amount of hiring credit can’t exceed the amount of increase in payroll for the reporting period.
Whilst the end of JobKeeper was expected, the next few months will be crucial for some businesses as they readjust to life without substantial government support. The ATO website has up-to-date information and eligibility requirements. Our team of expert advisors and accountants are also here to help you navigate this information. Please contact us today.