The JobMaker Hiring Credit scheme is an incentive for businesses to employ additional young job seekers between 16 and 35 years of age. Eligible employers can access the JobMaker Hiring Credit for each eligible additional employee hired between 7 October 2020 and 6 October 2021. The first JobMaker period is 7 October 2020 to 6 January 2021 and the claim period for this is 1 February 2021 to 30 April 2021. Registration is open now and can be accessed via ATO online services, the Business Portal or Online services for business.  This must be done before the end of the period being claimed for, ie. for the first period registration needs to be completed before 30 April 2021. Employers cannot claim JobKeeper and the JobMaking Hiring Credit for the same period. Single Touch Payroll (STP) reporting obligations for each period being claimed must be met. For more information and eligibility criteria please follow the link below. https://www.ato.gov.au/General/JobMaker-Hiring-Credit/ If you wish to discuss any of the above information please contact our office.

Click here to download the Business Matters Newsletter Issue Q1 2021

Tax Highlights
The 2020-2021 Budget was described as responding to the urgent needs of NSW now, whilst also looking beyond the current crisis and into the future.

The key factors for NSW businesses are as follows:

• Changes to payroll tax rates and thresholds
• $1,500 digital voucher
• Commercial rent relief
• Jobs Plus program
• Tax reforms

Payroll tax changes
The payroll tax rate will be reduced from 5.45% to 4.85% for the next two years, in addition, the payroll tax threshold will increase from $1m to $1.2m from 1 July 2020.

These changes will take many small and medium businesses out of the payroll tax system and reduce the payroll tax burden on those businesses that continue to be subject to payroll tax.

Please do not hesitate to contact your client manager to conduct a review of your payroll tax circumstances, as this is a regular area of NSW revenue reviews.

$1,500 digital voucher
Small and medium size businesses, which do not pay payroll tax, will be provided with a $1,500 digital voucher that can be applied towards the cost of government fees and charges.

Commercial Rent Relief
The commercial rent relief scheme has been extended until 28 March 2021. The extension will apply to retail tenants with annual turnover less then $50mil that has a downturn of turnover greater then 30%.

Jobs Plus Program
The Jobs Plus Program aims to create or support 25,000 jobs between 15 December 2020 and 30 June 2022. Businesses that create (net) at least 30 new jobs in NSW will be eligible for payroll tax relief for up to a four year period.

Tax reforms
There will also be a review into reforming the property tax system, including stamp duty and land tax.

Stay tuned for further updates as they arise!

Please contact your client manager directly by phone on (02) 8543 6800 or email for more information.

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:

Employer eligibility	Has an ABNUp to date with tax lodgementsRegistered for PAYGReporting through single touch payrollKeeps adequate records of the paid hours worked by the employee they are claiming the credit forAnother employer is not claiming JobMaker for the same employee
Employee eligibility	Received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one month within the three months before they were hiredBetween 16 and 35 years of age at the time their employment startedWorked 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 periodStarted work between 7 October 2020 and 6 October 2021The first year of employment with the employerThe 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.

Government entities or agencies, banks and other institutions subject to the bank levy, businesses in liquidation, and foreign Government entities (unless a resident entity), are unable to access JobMaker.

I can only claim JobMaker if the number of employees and payroll increases. What happens if one of my team resign? Through no fault of the business?

Your business can only receive JobMaker for your eligible employees if total employee headcount and payroll increases. If the headcount or payroll decreases or remains the same, JobMaker cannot be claimed for that period.

For example, if you had three staff at September 2020 and hired an additional two employees in late October 2020, your business can claim JobMaker for the two new employees assuming the business and the employer are eligible and payroll has increased compared to the September 2020 quarter. However, in December 2020, one of your original staff members resigns. As a result, your business can only claim JobMaker for one eligible employee in December as your headcount has increased by one, not two, compared to the September 2020 baseline.

A similar baseline concept applies to payroll. If you employed new eligible employees in October 2020 but your overall payroll remained the same or only increased marginally because the hours of your existing staff reduced when the two new employees were employed, then the JobMaker credit will only be the additional payroll amount. That is, if the JobMaker credit for the two employees for the quarter is $8,960, but payroll compared to the September 2020 quarter only increased by $1,200, then the JobMaker credit you receive would be $1,200. The JobMaker credit cannot exceed the increase in payroll.

Each month, employers will need to ensure they pass these ‘additionality’ tests before claiming.

Your headcount and payroll increase is measured on the last day of each reporting period from the date your first new employee started. For example, if your first new employee joined in October 2020, your baseline is set at that point. If a new employee starts in January 2021, your payroll and headcount baseline is measured from the last reporting period, in this case, December 2020 for headcount and the December quarter for payroll.  That is, your baseline commences from the date your new employee starts and then is reassessed each reporting period to ensure there is an increase.

If I don’t hire new staff until January 2021, can I claim JobMaker for 12 months or only up to 6 October 2021?

JobMaker is available for 12 months for eligible employees hired from 7 October 2020 until 6 October 2021. If you hire new employees from January 2021, JobMaker is available for 12 months for these employees assuming that the employees and business are eligible and the ‘additionality’ test is passed.

The baseline for the ‘additionality’ tests – headcount and payroll – starts from the start date of your new employee. The Government has indicated that the baseline for the ‘additionality’ test will be adjusted in the second year of the program to ensure an employer can only receive JobMaker for 12 months for each additional position created.  The detail of exactly how these rules will work has not been released as yet.

My business did not have employees in September but I hired my first employee in late October. Can I claim the JobMaker credit for them?

Businesses with no employees on 30 September, cannot claim JobMaker for their first employee. However, JobMaker can be claimed for your second and any subsequent employees that started on or before 6 October 2021.

Can the business get JobKeeper and JobMaker?

No. Once your business exits JobKeeper and is no longer receiving JobKeeper payments for any employees or business participants, if eligible, the business could then start to receive JobMaker credits. The business is eligible for the hiring credit in the reporting period following your JobKeeper exit date.

The JobMaker credit and the details of how the rules will apply are subject to change. Please do not make decisions based on the JobMaker information available as the final shape of the legislation could change. We will provide a summary of the rules and how you can claim the JobMaker hiring credit as soon as the rules are confirmed.

Please contact your client manager directly by phone on (02) 8543 6800 or email for more information.