We’ve had quite a few questions about the JobMaker hiring credit announced in the 2020-21 Federal Budget. The legislation enabling the JobMaker scheme has not passed Parliament as yet and until this occurs, the JobMaker rules are not certain and may change. More details should be available soon and we’ll let you know as soon as we have some certainty. Here is what has been announced so far:
What is JobMaker?
JobMaker is a credit available to eligible businesses for hiring additional employees (not if you are merely replacing someone who left). The hiring credit is available for jobs created from 7 October 2020 until 6 October 2021.
The credit provides:
- $200 per week for new employees between 16 to 29 years of age, and
- $100 a week for new employees between 30 to 35 years of age.
Payment is from the start date of the employee for 12 months.
When do the credits start?
Assuming the legislation passes Parliament and your business and the employee are eligible, and the ‘additionality’ test is passed, credits can be claimed for employees hired from 7 October 2020 until 6 October 2021. The credit will be claimed quarterly in arrears by the employer from the ATO from 1 February 2021. The credit is an incentive for the employer to support wage costs and not passed onto the employee.
How can we access JobMaker?
There are three tests for JobMaker:
- Has an ABN
- Up to date with tax lodgements
- Registered for PAYG
- Reporting through single touch payroll
- Keeps adequate records of the paid hours worked by the employee they are claiming the credit for
- Another employer is not claiming JobMaker for the same employee
- Received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one month within the three months before they were hired
- Between 16 and 35 years of age at the time their employment started
- Worked at least 20 hours per week on average for the full weeks employed for the period being claimed. If the employee worked less than 20 hours, the employer cannot claim JobMaker for them during that period
- Started work between 7 October 2020 and 6 October 2021
- The first year of employment with the employer
- The employer is not receiving other forms of assistance from the Commonwealth Government for the employee, for example JobKeeper or an apprenticeship subsidy
Additional employee test (additionality test)
- The employer’s:
- Total employee headcount on the last day of the reporting period increased by at least one additional employee compared initially to 30 September 2020, then to the previous reporting period.
- Total payroll for the reporting period increased compared initially to the September quarter 2020 (July, August, September 2020), then to the previous reporting period. The hiring credit cannot exceed the increase in payroll.