22 Dec JobMaker Hiring Credit
The Government has introduced a JobMaker Hiring Credit scheme for new employee positions created by eligible employers. The scheme will run from 7 October 2020 to 6 October 2022 and will have a maximum claim period of 12 months per eligible position created.
For an employer to be eligible, the employer must:
- not have paid a levy under the Major Bank Levy Act 2017
- possess an ABN
- be up to date with their tax lodgment obligations
- be registered for PAYG withholding, and
- be reporting payroll through STP.
An employer cannot claim for JobMaker Hiring Credit if they are also claiming JobKeeper for the same period. Also, an employer cannot claim JobMaker Hiring Credit for an employee where the employer is also claiming a federal government apprentice/trainee subsidy.
Employers need to show that a new employee increases the entity’s baseline employee headcount. The credit for a new employee will be:
- $200 per week if the new employee is aged 16 to 29 years old, or
- $100 per week if the new employee is aged 30 to 35 years old.
However, any JobMaker Hiring Credit for a particular quarter is limited to the gross increase of overall payroll for the relevant baseline period. For example, if an employer was eligible to receive $12,000 in JobMaker Hiring Credits, but only had an increase in payroll of $6,000, the JobMaker Hiring Credit is limited the smaller amount.
During the first year of operation, the baseline headcount is the number of employees employed by the entity on 30 September 2020. After the first year of operation, an increase in headcount is based on the previous years’ figure.
|If the period begins on:||The baseline headcount from:|
|7 October 2020||30 September 2020|
|7 January 2021||30 September 2020|
|7 April 2021||30 September 2020|
|7 July 2021||30 September 2020|
|7 October 2021||7 October 2020|
|7 January 2022||7 January 2021|
|7 April 2022||7 April 2021|
|7 July 2022||7 July 2021|
For an employer to be eligible for a JobMaker Hiring Credit, the employee must:
- commence employment with the entity between 7 October 2020 and 6 October 2021
- be between 16 and 35 years of age (inclusive) on the date of commencement
- work at least 20 hours per week over the relevant 3-month period, and
- have been eligible to receive JobSeeker, Youth Allowance or Parenting Payment for at least 28 consecutive days during the 84 days prior to the commencement date of employment.
An individual is taken to be eligible for JobSeeker on a particular day if the individual would have been eligible to receive a payment, but that payment or allowance is reduced to nil by the Social Security Act 1991. This includes a situation where the payment is reduced to nil due to the individual’s partner earning more than the maximum allowable amount under the JobSeeker rules. However, the individual would otherwise need to pass the Assets test and the liquid asset waiting period test.
The scheme will be administered by the ATO, and claims can be made quarterly, commencing from February 2021.
Like JobKeeper, an employee will be required to notify their employer on commencement that they are an eligible employee under the scheme. As part of this nomination, the employee will disclose that they have not provided another nomination form to another employer.
An entity cannot claim JobMaker for the following individuals:
- If the entity is a sole trader — a relative of the sole trader
- If the entity is a partnership — a relative of a partner (including shareholders or directors of corporate partners)
- If the entity is a trust — a trustee or beneficiary of the trust, including their relatives
- If the entity is a company — a shareholder or director, including their relatives
- If the individual was engaged as a contractor or subcontractor at any time during the last 6 months — if the duties or functions are substantially similar to the contracting powers exercised.
Accountants should seek to communicate this scheme to any of their clients that have employees on their payroll. The scheme can subsidise these businesses’ payroll if they decide to take on new employees, which will directly affect the profitability of the business.
Care must be taken to ensure that the new positions are created additionally on top of existing employees on payroll, and not to replace any already existing positions.