JobMaker Hiring Credits
JobMaker hiring credits
In this years Budget, the Government announced a JobMaker hiring credit scheme, providing employers with funds to subsidise eligible employee’s wages as a hiring credit. The $4.0 billion wage subsidy scheme is designed to encourage businesses to hire additional young employees aged between 15 to 35, with the aim to support around 450,000 jobs and get young Australians back to work after many lost their jobs as a result of COVID-19.
- From 7 October 2020, eligible employers will be able to claim $200 a week for each additional eligible employee they hire aged 16 to 29 years old; and $100 a week for each additional eligible employee aged 30 to 35 years old.
- New jobs created until 6 October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created.
- To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring.
- The JobMaker Hiring Credit will be claimed quarterly in arrears by the employer from the Australian Taxation Office (ATO) from 1 February 2021.
- Employers will need to report quarterly that they meet the eligibility criteria.
- The JobMaker Hiring Credit is designed to support new employment. Employers do not need to satisfy a fall in turnover test.
- To attract the JobMaker Hiring Credit, the employee must be in an additional job created from 7 October 2020.
- To demonstrate that the job is additional, specific criteria must be met. The additionality criteria require that there is an increase in:
- the business’ total employee headcount (minimum of one additional employee) from the reference date of 30 September 2020; and
- the payroll of the business for the reporting period, as compared to the three months to 30 September 2020.
- The amount of the hiring credit claim cannot exceed the amount of the increase in payroll for the reporting period.
- Total employee headcount on 30 September 2020 and payroll in the three months to 30 September 2020 represent the baseline values for the employer.
- The baseline headcount will be adjusted in the second year of the program to ensure an employer can only receive the JobMaker Hiring Credit for 12 months for each additional position created.
Employees are eligible to receive the JobMaker Hiring Credit if they:
- have an Australian Business Number (ABN);
- are up to date with tax lodgement obligations;
- are registered for Pay As You Go (PAYG) withholding;
- are reporting through Single Touch Payroll (STP);
- meet the additionality criteria;
- are claiming in respect of an eligible employee; and
- have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of.
Newly Established Businesses
Newly established businesses and businesses with no employees at the reference date of 30 September 2020 are able to claim the JobMaker Hiring Credit where they meet the criteria. The minimum baseline headcount is one, so employers who had no employees at 30 September 2020 or who were created after this reference date will not be eligible for the first employee hired, but will be eligible for the second and subsequent eligible hires.
The following employers are not eligible for the JobMaker Hiring Credit:
- Commonwealth, state and local government agencies, and entities wholly owned by these agencies.
- Sovereign entities (foreign Governments, their agencies and wholly owned foreign resident subsidiaries). However, Australian resident entities owned by a sovereign entity that meet all other eligibility criteria are eligible.
- Entities in liquidation or who have entered bankruptcy.
- Employers who are claiming the JobKeeper Payment.
- Employers subject to the major bank levy.
To be an eligible employee, the employee must:
- be aged either:
- 16 to 29 years old, to attract the payment of $200 per week; or
- 30 to 35 years old to attract the payment of $100 per week at the time their employment started;
- have worked at least 20 paid hours per week on average for the full weeks they were employed over the reporting period;
- commenced their employment between 7 October 2020 and 6 October 2021;
- have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one month within the past three months before they were hired;
- be in their first year of employment with this employer, reflecting that the hiring credit is only available for 12 months for each additional job; and
- must be employed for the period that the employer is claiming for them.
- Employees may be employed on a permanent, casual or fixed term basis.
The following are not eligible employees for the JobMaker Hiring Credit:
- employees aged under 16 years or over 35 years at the time their employment started;
- employees for whom the employer is also receiving a wage subsidy under another Commonwealth program such as the Boosting Apprenticeship Commencements wage subsidy, Supporting Apprentices and Trainees subsidy and the Australian Apprentice Wage Subsidy Trial;
- employees that another employer is claiming the JobMaker Hiring Credit in respect of; and
- employees that worked on average less than 20 hours per week, for the full weeks they were employed during a reporting period will be ineligible for that period.
How to register for the JobMaker Hiring Credit?
Registrations will open for eligible employers through ATO online services from 7 December 2020. Employers do not need to be registered at the time that they hire an employee in order to be eligible. Registration can occur at any time before a claim is made.
How and when to lodge a claim for the JobMaker Hiring Credit?
Employers can submit claims from 1 February 2021 (for new jobs created in the first reporting period of 7 October 2020 to 6 January 2021). Employers will have three months to submit claims following the opening of the claim period.
When will the JobMaker Hiring Credit be paid?
The JobMaker Hiring Credit will be paid quarterly in arrears.
Further detailed information is available in the information links below –
- JobMaker factsheet
- ATO guidance on JobMaker credits
- Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020
Please contact the team at Mukiwa if you have any questions or need assistance to register.