The ATO has released long-awaited draft guidance on its proposed compliance approach to the allocation of professional firm profits. The preliminary guidance is contained in the draft Practical Compliance Guideline PCG 2021/D2 (the draft Guideline). The ATO...
JobMaker reporting obligations
On 4 December 2020, the Treasurer registered a Legislative Instrument titled the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 9) 2020 (the Amendment Rules) to set out the details of the JobMaker Hiring Credit scheme (the Scheme). These rules are summarised in our Banter Blog article titled JobMaker Hiring Credit scheme explained.
On the same day, the Commissioner registered a Legislative Instrument titled the JobMaker Hiring Credit Reporting Obligations Instrument 2020 (the Instrument) which sets out what, how and when employers must report in relation to the Scheme. This article outlines employers’ administrative obligations as set out in the Instrument and in ATO guidance.
Employers must register with the ATO before making a JobMaker claim, using Online services or the Business Portal. They do not need to be registered before hiring eligible employees.
Employers can register at any time before the end of their first claim period.
The reporting requirements
The Amendment Rules require the employer to:
- notify the Commissioner, in the approved form, of its election to participate by the end of the period — e.g. notice for the first JobMaker period must be provided by 6 January 2021; and
- give information about the entitlement for the period to the Commissioner in accordance with the requirements in the Instrument.
The following summarises the notification and reporting requirements in the Instrument and the ATO guidance.
Part 1 — Employee reporting prior to claim
If an employer is subject to Single Touch Payroll (STP) reporting, it must give certain information to the Commissioner for the JobMaker period before the reporting deadline:
The employee details to be reported are:
- tax file number;
- date of birth;
- full name;
- date employment commenced (if during the JobMaker period);
- date employment ceased (if during the JobMaker period);
- whether the employee met the average hours of work requirement.
As the information is used to populate the claim form and in calculating the employer’s claim, a JobMaker Hiring Credit payment claim cannot be made until it is provided to the ATO through STP. This information will be populated in the claim form within 72 hours and used to calculate the employer’s claim.
The ATO is developing specifications setting out the JobMaker functionality for STP-enabled software. Information will become available on the ATO website.
Employers that are exempt from STP are to provide the above required information when making a JobMaker claim. They must be up to date with their PAYG withholding obligations due in the two years ending on the last day of the JobMaker period before making the claim. Generally, this will mean that the employer’s Business Activity Statement lodgments will need to be up to date.
Part 2 — Information to be provided as part of claim
When an employer makes a claim for a JobMaker Hiring Credit payment, it must provide the following details in relation to the period:
- the total payroll expenses for the period;
- the baseline payroll amount for the period;
- the total headcount at the end of the period;
- the baseline headcount for the period;
- confirmation that each employee included in the claim calculation is an eligible additional employee (including that the minimum hours test has been satisfied);
- a declaration that the information is true and correct, made by the lodger (the employer or an authorised agent);
- an electronic signature (if using the ATO’s online services) or proof of record ownership (if providing information via phone for those exempt from STP reporting); and
- the details of the employer’s financial institution account.
How and when to report claim information
An employer must lodge the claim information via ATO Online services for Individuals, ATO Online Services for Business, Business Portal or Online Services for Agents or the Business Portal as part of the claims process, unless the employer is exempt from reporting through STP.
The information for a JobMaker period must be submitted during the corresponding claim period:
No exemptions or extensions are available. Once the claim period has ended, an employer can no longer make a claim for that period. Claim information cannot be amended after the claim period but amendments can be made during the claim period.
Other administrative matters
The Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (the Act) established the legislative framework under which the Commissioner has general administration of the JobKeeper Payment scheme and now the JobMaker Hiring Credit scheme. Therefore, the provisions in the Act which apply to JobKeeper in relation to matters including payments, liability for repaying overpayments, record keeping and contrived schemes will also apply to JobMaker. The ATO may issue specific guidance on how it will administer these rules in the JobMaker context.
JobMaker employee notice
Eligible employees must complete a JobMaker employee notice as part of the eligibility requirements.
The notice must be completed before the employer makes a claim and the employer must receive a separate notice for each eligible employee for whom they intend to make a claim.
The ATO does not require the employee’s signature but the employer may choose to request it.
Employers may use the ATO’s JobMaker employee notice, or they may create their own employee notice containing the required information.
The ATO’s JobMaker employee notice and guidance for creating an employee notice are here.
JobMaker payments are made in arrears following each JobMaker period. The ATO states that employers can generally expect to receive their payment within five days of their claim being processed.
An employer that receives a JobMaker amount to which it was not entitled or that was more than the entitlement is liable to repay the amount plus General interest charge (GIC).
If any overpayment results from an individual giving a notice to more than one entity, the individual may be jointly and severally liable to pay the overpayment and any general interest charge.
The ATO advises that employers should keep records of employment and hours worked by employees. Employers do not need to provide employee notices to the ATO but should retain them for their records.
If the ATO reviews an employer’s assessment of their eligibility, it will request supporting documentation which may include:
- the JobMaker employee notice;
- employment records — e.g. a contract, payslips, payroll data, rosters and time sheets;
- business diaries, appointment books and logbooks; and
- invoices and records prepared for other business purposes.
Integrity rule — contrived schemes
The Act allows the Commissioner to determine that an entity never became entitled to the payment, or that the amount to which the recipient was entitled was a different amount where the entity entered into or carried out the scheme for the sole or dominant purpose of obtaining or increasing the amount of the JobMaker payment.
ATO compliance action
The ATO states that it will check for concerning and fraudulent behaviour and claims, and will actively pursue those claims.
Behaviours that will concern the ATO include:
Businesses that have:
- manipulated employee headcounts or payroll amounts;
- made claims for employees that are not genuinely employed or have not been in paid work for the required average 20 hours per week;
- knowingly made claims for employees who did not receive income support payments as required before they commenced employment;
- knowingly made claims for employees who are not between 16 and 35 years old;
- attempted to manipulate the reported age of employees;
- knowingly made claims for relatives or close associates;
- engaged in phoenix-like behaviour by starting a new business in order to access payments;
- transferring or hiring new employees to a new employment entity within a consolidated group to access JobMaker payments and/or continue to access JobKeeper payments; or
- reduced hours or terminated employment of existing employees for the purpose of accessing JobMaker payments for new employees.
Employees who have:
- falsely declared receipt of income support payments for 28 days within the 84 days before commencing employment; or
- falsely declared their age.
Intermediaries, including tax or BAS agents, that have:
- provided aggressive planning advice or otherwise facilitated access to JobMaker payments to ineligible clients; or
- exhibited any of the above behaviours in their own affairs.
Further info and training
Join us at the beginning of each month as we review the current tax landscape. Our monthly Online Tax Updates and Public Sessions are excellent and cost effective options to stay on top of your CPD requirements. We present these monthly online, and also offer face-to-face Public Sessions at locations across Australia. Click here to find a location near you.
We can also present these Updates at your firm (or through a private online session) with content tailored to your client base – please contact us here to submit an expression of interest or visit our In-house training page for more information.
The JobKeeper payment scheme – your questions, answered
TaxBanter is offering a tailored 1 hour online training session in which our expert trainers will guide your firm through the practical application of the JobKeeper package to your clients’ businesses.
Who is this session designed for?
Existing TaxBanter clients:
Coverage of the JobKeeper package will take place in your next scheduled training session. If you require training sooner, please contact us immediately to schedule an additional JobKeeper session ($770 per firm).
For other firms wishing to arrange a JobKeeper session, please contact us via email or phone us at 03 9660 3500 ($990 per non-client firm).
All sessions will be supported by comprehensive JobKeeper training material.