I’m here with the COVID-19 continuity update for Australian businesses on 24th September.
It seems that every week that goes by it gets more and more complex to navigate the legislation, grants and support payments that are on offer. I hope that these client briefings along with the knowledge of our coaching team and the Tenfold support team assist you with getting the best outcome for your business. JobKeeper is an example of something that was complex the first time around and has now become even more complex!
JobKeeper Extension payments for full time and part time employees
From 28th September, JobKeeper payments will change for those businesses that continue to qualify for JobKeeper Extension 1.
The first time around in JobKeeper, there was no distinction between part time and full time employees. This time, businesses that qualify for JobKeeper Extension will need to calculate which of their eligible employees are to be classified as tier 1 or tier 2.
As a reminder, there are two payment rates: tier 1 (higher rate) and tier 2 (lower rate).
There are two steps to satisfying the 80-hour threshold.
Step 1: Determine the individual’s reference period:
Step 2: Calculate your employee’s total number of hours during the reference period. This includes the number of hours worked, paid leave and paid public holidays.
For more information, visit the ATO here: https://www.ato.gov.au/General/JobKeeper-Payment/Payment-rates/80-hour-threshold-for-employees/
You must notify each employee in writing of their rate.
Alternative reference period for the 80 hour threshold
There may be circumstances where the 80 hour threshold isn’t met because the reference periods for pre-March or the pre-July are not representative of a typical 28-day period for your employee. In these instances, you can consider using an alternative reference period.
The alternative reference period is the 28-day period:
• ending at the end of the most recent pay cycle for the employee for you before 1 March 2020 or 1 July 2020
• in which the employee’s total number of hours of work, paid leave and paid absence on public holidays was representative of a typical 28-day period.
For more information on alternative reference periods, including an example, see the ATO’s site here: https://www.ato.gov.au/General/JobKeeper-Payment/Payment-rates/80-hour-threshold-for-employees/#Alternativereferenceperiod/
Eligible business participants and sole traders
An eligible business participant is an individual who is actively engaged in the operation of the business and is not an employee of the business. There can only be one eligible business participant for your entity.
The reference period for eligible business participants and sole traders is the month of February 2020. To be eligible for tier 1 payment, you must have been actively engaged in your business for 80 hours or more during the reference period.
Again, the alternative reference period can be applied if the standard reference period is not suitable.
I know for several Australian businesses there are going to be instances where there have been extenuating circumstances for both the reference period and the hours worked. Please speak to your business coach or your accountant about how to navigate the ATO guidelines to get the best outcome for your business and your employee. Like a lot of these support payments, getting the right advice on how to interpret them correctly can be extremely lucrative.
Ashley Thomson B.Eng(Hons), Grad. Dip. Mgmt, MEI
Tenfold Business Coaching