You may not have heard the BIG Government headlines in last year’s budget, JOBMAKER, but more specifically it is the JobMaker Hiring Credit. Jobmaker is designed to help accelerate business growth in the employment of young people during the COVID-19 recovery.
The JobMaker Hiring Credit will be available to ALL employers for each new job they create over the next 12 months for which they hire an eligible young person, aged 16 to 35 years old.
This all sounds amazing, right? But there are some eligibility rules, here are the key facts:
- 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.
- The JobMaker Hiring Credit is designed to support new employment. Employers do not need to satisfy a fall in turnover test like JobKeeper, you can simply start employing eligible employees straight away and the systems to claim will be built out shortly.
- Employers CANNOT be claiming JobKeeper to be eligible for the Hiring Credit
- Employers MUST be up to date with ALL tax lodgements obligations in the last two years (includes tax returns and activity statements)
- All payments under the JobMaker Hiring Credit scheme are assessable as ordinary income, therefore include din your businesses taxable income.
The Additionality Criteria
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 be 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.
Employers 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 can 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 any subsequent eligible hires.
The following employers are not eligible for the JobMaker Hiring Credit:
- Entities in liquidation or who have entered bankruptcy.
- Employers who are claiming the JobKeeper Payment.
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.
JobKeeper vs JobMaker
Things are a little tricky when It comes to understanding the interaction between JobKeeper and Jobmaker. Employers cannot claim the JobMaker Hiring Credit for a particular JobMaker period if they have claimed JobKeeper for a fortnight that started during that same JobMaker period.
For example, if an employer claims JobKeeper Ext 1 for any JobKeeper Ext 1 fortnight from JobKeeper fortnight 15 (12 to 25 October 2020) to JobKeeper fortnight 21 (4 to 17 January 2021), they cannot claim the JobMaker Hiring Credit for JobMaker period 1 (7 October 2020 to 6 January 2021).
If they do not claim JobKeeper (you were not eligible for Jobkeeper Ext. 2) for any JobKeeper Ext. 2 fortnight from JobKeeper fortnight 22 (18 to 31 January 2021) to JobKeeper fortnight 26 (15 to 28 March 2021), they can claim the JobMaker Hiring Credit for JobMaker period 2 (7 January 2021 to 6 April 2021).
If your business did not claim any of the JobKeeper Extension, then you can claim JobMaker right now for all eligible employees.
JobMaker To Do List
- Check all business tax obligations are up to date
- Check Employers & Employees Eligibility for JobMaker
- Register for JobMaker – via Business Portal or Tax Agent
- Setup JobMaker for in STP Payroll System
- Have eligible employees complete “JobMaker Hiring Credit Employee Notice” form
- Claim your JobMaker Hiring Credit every three months – via Business Portal or Tax Agent
How By The Numbers Can Help
If you are an eligible employer and you have an eligible employee and you would like us to help, please complete our online form here and we will get to work.