JobMaker is the latest wage subsidy scheme introduced by the Federal Government to help businesses survive while at the same time giving young people access to job opportunities.
Young people (those aged 16 to 35) have been particularly badly hit by restrictions imposed as part of the health response to the Covid-19 pandemic and according to recent surveys, one in three young people are unemployed or under-employed.
The JobMaker Hiring Credit is designed to give Australian employers more of an incentive to create new jobs by subsidising the wages of each additional young employee that they hire. As a result, younger workers should find it easier to access job opportunities.
The Government expects to provide support for 450,000 new jobs for young people at a cost of $4 billion over two 12 month periods (2020-21 and 2022-23) which, in turn, should help rebuild the country’s economy.
How does it work?
Employers will be able to claim JobMaker Hiring Credit for each new job they create over the 12 months from 7th October 2020 to 6th October 2021 which equates to:
- AU$200 every week for employees from the age of 16 to 29; and
- AU$100 each week for employees aged from 30-35 years old
They do not have to pass this payment onto the employee.
How Can Employers Register for the Scheme?
Registration only needs to be done once and can be completed on the ATO website by the employer or they can use an accountant to register on their behalf.
Single Touch Payroll enables an employer to nominate employees and report their details to the ATO who calculate the subsidy entitlement.
Unlike JobKeeper, there is no need to show that their business has suffered a decrease in turnover. Instead, the business needs to show an increase in the number of people employed during the JobMaker program.
It’s not essential to be registered with JobMaker when creating a new job, but an employer will need to be registered when they make a claim.
The JobMaker Hiring Credit will be paid 3 months in arrears to eligible employers and can be claimed from 1st February 2021 for the first JobMaker quarter (7th October 2020 to 6th January 2021) with a 3-month window open for claims.
Is any employer eligible for JobMaker?
To be eligible for JobMaker an employer must show that the total number of their employees has increased since the reference date of 30th September 2020 and that their payroll has increased accordingly. In other words, new people must be hired and existing employees won’t qualify.
They must also:
- Possess an Australian Business Number
- Have their tax lodgements up-to-date
- Be registered for Pay As You Go Withholding
- Report to the ATO through STP (Single Touch Payroll)
- Be employing the person they are claiming for
- Have kept accurate records of the hours worked by the said employee
Who is an eligible employee?
An eligible employee must commence employment between 7th October 2020 and 6th October 2021 and be between the age of 16 and 35 on the date employment begins.
They also need to meet the following criteria:
- They must have worked a minimum of 20 hours per week on average for the time they were employed during the relevant JobMaker quarter.
- Must be in their first year of employment with this employer
- Must be employed in the period that the employer is claiming for them
- Must have received JobSeeker payment, Parenting Payment, Youth Allowance (or another) for 28 consecutive days within the 3 months prior to being hired
Employees can be hired on a permanent, fixed-term, or casual basis.
What if I am a new business?
Under the JobMaker scheme, an employer cannot claim for the first person they hire but they can claim for any additional eligible employees up until the 6th October 2021. However, if they hire an eligible young person on that day they may be able to claim the wage subsidy for the following 12 months of the program.
Claiming in the second year of the scheme
An employer is only able to claim the Hiring Credit for a new employee for 12 months which starts on the date they were hired. Subsequently, the ATO will adjust the baseline headcount in the second year to reflect the new roles created in the first year of the scheme. Thus during the second year, the working credit can only be claimed for new roles that exceed the revised baseline.
If this all sounds a little confusing or time-consuming then why not let us register your business for JobMaker on your behalf and take care of your reporting? Give the friendly team at JSM Accounting a call to discuss how we can help you and your business.