The ATO has provided further guidance and clarification for the Job Keeper subsidy recently announced by the Federal Government.
· Eligible businesses will receive $1,500 per fortnight from the Government in arrears to pay and retain employees for a period of 6 months.
· Employers must pay their employees by the end of April to be eligible for the first payment in May.
· If an employee is normally paid more than $1,500 per fortnight, the employer will continue to pay the normal wages and will receive the $1,500 as a wage subsidy, meaning the employer will have to fund the balance from business funds.
· If an employee was paid less than $1,500 per fortnight, the employer would now pay $1,500 whilst they are receiving the Job Keeper funding.
· The $1,500 is gross wages and tax must be withheld.
· The $1,500 is assessable and businesses will receive a corresponding deduction for wages paid.
· Superannuation is calculated on the employee’s normal fortnightly gross pay.
· The payments will run from 30 March to 27 September 2020.
· To be eligible, the business needs to prove there has been a reduction in turnover of 30% for businesses with less than $1billion turnover or 50% for businesses earning more than $1billion in turnover.
· If an employer is not yet eligible but does subsequently have a reduction of 30% in turnover in subsequent months up to 27 September, they can apply at that time. The payment will not be backdated.
· Enrolment opens Monday 20 April 2020.
Job Keeper – Eligible Business Recipients
· Sole Traders, Partnerships, Trusts and Companies may now be eligible for Job Keeper if they are an eligible business entity.
· The entity may be eligible if they have an eligible business recipient. This is an individual who is actively engaged in the business but not an employee.
· The reduction in turnover test still applies and the entity must have been carrying on a business on 1 March 2020.
· Enrolment opens Monday 20 April 2020
Code of Conduct – Commercial and Retail Leases
· The Government has announced a new code of conduct regarding rent relief.
· Essentially, landlords are expected to negotiate with their tenants regarding rent and outgoings.
· Any deferred rent will be recouped over the duration of the lease period or a minimum period of 24 months.
· Landlords cannot terminate a lease for non-payment.
· Tenants should ensure that if they can pay their rent that they continue to do so.
· In order to obtain rent relief, tenants must prove that their turnover has decreased or will decrease by 30% as a result of COVID-19 (eligibility for the 'Job Keeper' program is evidence of this).
· Up to 50% of the rental amount can be waived, with the reduction proportionate to a business's fall in turnover.
· For deferral of rent, the full amount can be deferred, provided that money is repaid in the lease term.
· If there is six months or less on the lease term, the parties have the pandemic period plus an extra 12 months to repay the amount.
· An independent body will be set up to mandate the new rules, with the states and territories still to announce a full new mandate on residential tenancy agreements.
The announcement comes after the Federal Government announced a six-month moratorium on rental evictions.
Employees Working from Home
The ATO have announced an increase in the home office rate for claiming a deduction for working from home.
You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 if you are:
· working from home to fulfill your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls; and
· incurring additional deductible running expenses as a result of working from home.
You are not required to have a separate or dedicated area of your home set aside for working, such as a private study, if you decide to claim a deduction.
To claim a deduction for working from home, all the following must apply:
· You must have spent the money;
· The expense must be directly related to earning your income; and
· You must have a record to prove it.
It's important to remember that any claim for working from home prior to 1 March 2020 should be calculated under the old method.
If you wish to discuss any of the above further or require assistance with obtaining Job Keeper for your business, please contact our office on 8373 5912.