Released in the Federal Budget last year, the Government announced the JobMaker Hiring Credit scheme which is an incentive for businesses to employ additional job seekers aged 16-35 years. This scheme received royal assent on 4 December 2020 and registrations are now open. Eligible employers may be able to access the JobMaker Hiring Credit for each additional employee they hire between 7 October 2020 and 6 October 2021. See below for a list of eligibility criteria for both the employer and employee.
You will notice the scheme is complicated. We recommend you contact your accountant to request assistance to confirm eligibility before you hire your new employees and to ensure you correctly lodge the required documents to receive any eligible payments.
Employers may be eligible for JobMaker payments if ALL of the following apply.
- has registered for the JobMaker Hiring Scheme (note applications are now open)
- operates a business in Australia
- is a not-for-profit organization operating in Australia
- is a deductible gift recipient
- holds an ABN
- is registered for PAYG
- is up to date with their income tax return and GST lodgements for the two years up to the end of the JobMaker period for which they are claiming
- satisfies the payroll increase and the headcount increase conditions (see below)
- satisfies reporting requirements including up to date Single Touch Payroll reporting
- does not belong to one of the ineligible employer categories
- has not claimed JobKeeper payments for a fortnight that started during the eligible JobMaker period
Employees are eligible if they:
- are an employee of the entity during the job maker period
- are aged between 16 to 35 years at the time they commenced employment (must be on or after 7 October 2020 and before 7 October 2021)
- worked or have been paid for an average of at least 20 hours per week they were employed during the JobMaker period
- have given a JobMaker Hiring Credit employee notice to the employer
- have not already provided another notice to a current employer
- received the Parenting Payment, Youth Allowance (other than if undertaking full-time study or is a new apprentice) or JobSeeker payment for at least 28 consecutive days in the 84 days prior to stating employment
Conditions for making a claim
The aim of this scheme is to subsidise an increase in your number of employees, not reduce the cost of replacing them. As an employer, to receive payments you must prove you are creating new employment positions. You do this each JobMaker period by showing an increase in your employee headcount and in employee payroll.
There must be an increase in the number of eligible employees at the end of the JobMaker period compared to the baseline headcount.
- includes all employees (full-time, part-time, casual)
(Note contractors or subcontractors are excluded)
- In the first year of the scheme, your baseline headcount is your total headcount on 30 September 2020
- Your total headcount for each JobMaker period will be the total number of ELIGIBLE EMPLOYEES employed on the last day of each JobMaker period.
Note – if you had no employees or are a new business (started carrying on a business after 30 September 2020), your baseline headcount is zero.
At the time of registration, you will be required to provide your baseline payroll. There must be an increase in baseline payroll in order to be eligible. The calculation is complicated, and we recommend you seek assistance from your accountant to ensure you perform it correctly.
How payment amounts are calculated and the JobMaker Periods
Similar to the JobKeeper reporting requirements, JobMaker credit payments will be calculated automatically from the information provided. This is done via the ATO Business Portal each time you lodge a claim. The payment is based on:
- the information you provide via Single Touch Payroll (STP)
- your headcount
- the information your payroll provided at the time of registration in the claim form
The first claim period is open, and you can begin to receive payments from 1 February 2021 as long as you have registered and meet all the eligibility requirements.
If you need assistance to determine your eligibility, are uncertain if some employees meet the criteria, or need help to determine your baseline headcount or payroll expense, please contact your trusted advisor at Hoffman Kelly who will be happy to assist you with this.