Last updated 28 April 2020

The Government has now introduced legislation and rules to implement the JobKeeper payments to employers.  The legislation has now received royal assent and the statutory rules are now in effect.

To cut through the complexity, Pilot has summarised the various requirements of the JobKeeper scheme below.

Summary of the scheme

Businesses that expect to see their turnovers decline will be able to access a wage subsidy from the Commonwealth Government of $1,500 per eligible employee, per fortnight, from the fortnight beginning 30 March 2020 for a maximum of six months.

The first payments are expected to be received by eligible employers early in May. These payments will be taxable to the employers. They will also be tax deductible when paid to employees.

This measure is designed to keep Australians in work. The scheme also applies to businesses that have stood down employees due to the pandemic.

Note, on 8 May, the ATO released alternative decline in turnover tests. To read more about these alternative tests click here.

When is a business eligible for the payments?

The employing entity needs to have carried on a business in Australia (and had an ABN) on 1 March 2020 and satisfied the ‘decline in turnover test’ at or before the time it qualifies for the JobKeeper payments.

The relevant thresholds for the decline in turnover test are as follows:

Entity Decline in projected GST turnover (of the individual entity)
1 ACNC registered charities 15%
2 Businesses other than those in 1 & 3 30%
3 Businesses with group aggregated turnover > $1 billion 50%


The decline in projected GST turnover applies to either:

(i) Any month from March to September 2020; or
(ii) The June or September 2020 quarters;

As compared with the corresponding period in 2019.

The projected turnover decline must be made in a relevant test period. For example, projected turnover declines for either the month of April or the June quarter can be made in April 2020 to assess an entity’s eligibility for the scheme from that point onwards.

GST turnover includes taxable supplies and GST-free sales but excludes input taxed supplies.

Further, whilst the threshold may be determined by the aggregated turnover of a business, whether or not the decline in projected GST turnover meets the relevant threshold will be a stand-alone entity issue. Put simply, each employing entity will need to assess their declines in projected GST turnover in isolation.

The ATO will have the discretion to apply other tests where the decline in turnover test is not appropriate.

Employers should note that the legislation allows the ATO to recover JobKeeper payments made to businesses which are ultimately ineligible for the concession. Interest may be imposed by the ATO on any overpaid amounts.

Fortnights really matter

Employers will be eligible for the JobKeeper payments in relation to the fortnights beginning from 30 March 2020 and ending on 27 September 2020. The JobKeeper payments will be equal to $1,500 per eligible employee per fortnight.

Eligible employers need to pay eligible employees a minimum fortnightly amount of $1,500 before tax. These payments include wages, bonuses, commissions, allowances and salary sacrificed amounts.

Employers can elect to top up employees on low incomes to meet the fortnightly threshold in order to make the employees eligible. Employers will not be required to pay Superannuation Guarantee on such top up payments, however they have the discretion to do so.

These payments are required to be paid as a part of the employer’s normal payroll cycle for the fortnight. Given the first fortnight commenced on 30 March, employers may have already missed the opportunity to top up some employees to ensure their eligibility.

Responsibilities of employees and employers

The rules require employers to inform the ATO of their eligible employees (and their details) before the end of the relevant fortnight. The exception to this is during the first 2 fortnights that the program will cover, meaning that eligible businesses will need to notify the ATO of their entitlement by 8 May 2020. Applications are now open for this period. Employers or their accountants need to log into the ATO business portal using their MyGov details to access the necessary JobKeeper forms.

Further, the employee must notify the employer (in writing) that on 1 March 2020 they were 16 years or older, either a full-time, part-time or long-term casual employee of the business, that they are an Australian resident or holder of a special category visa, and that they agree to be nominated by the employer for the JobKeeper. An employee can only nominate one employer through which a JobKeeper payment can be received. Employees will be excluded from the scheme if they are owed paid parental leave relating to the relevant fortnight.

The rules do cater for business restructures and changed business ownership in assessing whether a casual employee meets the long-term criteria.

In addition, the employer must also inform the employees that they have applied for JobKeeper payments on their behalf within 7 days of informing the ATO.

Reporting obligations

In addition to informing the ATO of the entity’s eligibility for the JobKeeper payments, the employer must report its monthly GST turnover and projected GST turnover for the following month within 7 days of the end of each month.

Some entities may also make a claim

Businesses that qualify for the JobKeeper payments will also be able to nominate one “eligible business participant” per fortnight to receive an additional $1,500. Eligible business participants cannot be eligible employees of other entities and must be actively engaged in the business conducted by the entity. Eligible business participants must be an individual who is also one of the following:

Employing entity Eligible business participant
Sole trader The sole trader
Partnership A partner
Trust An adult beneficiary of the trust
Company A shareholder or director of the company


The individual must meet the same tests as employees (refer above).

Integrity measures for payments to eligible business participants

In addition to having an ABN on 12 March 2020, meeting (or exceeding) the decline in turnover thresholds, employers will need to satisfy one of the following tests in order to qualify for the JobKeeper payments for eligible business participants:

(i) The entity carried on a business during FY2019 and had lodged its tax return prior to 12 March 2020; or
(ii) The entity made a taxable supply between 1 July 2018 and 12 March 2020 and lodged the appropriate activity statements by 12 March 2020.


The system revolves around eligible entities receiving payments for eligible employees based upon projected falls in turnover.

Ultimately, this is a ‘bright line’ test of entitlement which is based on projected GST turnover compared to the corresponding period last year. That is, it is an all or nothing scheme. A business needs to decide whether to register based upon projected falls in turnover. There is no comparison with actuals built into the rules. The projections, and their reasonableness are key.

Businesses will need to decide early whether they project the requisite fall, register and pay staff accordingly.

The risk being over-estimating the projected falls in revenue and being accountable for JobKeeper receipts accordingly.

Contact Pilot

Should you have any queries in relation to the COVID-19 concessions, please contact your Pilot advisor or Murray Howlett via [email protected]