Quarterly Newsletter: December 2020
JobMaker Hiring Credit passed
The government has passed legislation to establish the JobMaker Hiring Credit, which is part of the government’s economic response to the COVID-19 pandemic. The JobMaker Hiring Credit is specifically designed to encourage businesses to take on additional young employees and increase employment.
It does this by providing employers with a fixed amount of $200 per week for an eligible employee aged 16 to 29 years and $100 per week for an eligible employee aged 30 to 35 years, paid quarterly in arrears by the ATO.
To be eligible, the employee must have been receiving JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months, assessed on the date of employment. Employees also need to have worked for a minimum of 20 hours per week of paid work to be eligible, averaged over a quarter, and can only be eligible with one employer at a time.
The hiring credit is not available to an employer who does not increase their headcount and payroll.
Employers and employees will be prohibited from entering into contrived schemes in order to gain access to or increase the amount payable. Existing rights and safeguards for employees under the Fair Work Act will continue to apply, including protection from unfair dismissal and the full range of general protections.
Supporting Apprentices and Trainees - Wage Subsidy
The government is extending the Supporting Apprentices and Trainees wage subsidy to include medium-sized businesses who had an apprentice in place on 1 July 2020.
Eligible employers can apply for a wage subsidy of 50% of an eligible apprentice or trainee's wages paid until 31 March 2021. Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small or medium-sized business.
Your small business may be eligible if:
you employ fewer than 20 people; or
you are a small business with fewer than 20 people, using a Group Training Organisation; and
the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020 for claims after this date. Claims prior to 1 July 2020, will continue to be based on the 1 March 2020 eligibility date
Your medium-sized business may be eligible if:
you employ fewer than 200 people; or
you are a medium business with fewer than 200 people, using a Group Training Organisation; and
the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020
Any employer, including small, medium or large businesses and Group Training Organisations, who re-engages an apprentice or trainee displaced from an eligible small or medium business may also be eligible for the subsidy.
Final claims for payment must be lodged by 30 June 2021.
FBT exemption for car parking
Car parking benefits provided by small business employers are exempt if either:
the employer was a small business for the last income year before the relevant FBT year
the employer's total gross income (before any deductions) for the last financial year before the relevant FBT year was less than $10 million
The car parking must not be provided in a commercial car park, and the employer can't be:
a government body
a listed public company
a subsidiary of a listed public company
From 1 July 2016, you are a 'small business entity' if you are a sole trader, partnership, company or trust that:
operates a business for all or part of the income year, and
has an aggregated turnover less than $10 million (the turnover threshold)
From 1 April 2017, the turnover threshold for FBT concessions increased to $10 million.
The $10 million turnover threshold applies to most concessions, except for:
the small business income tax offset, which has a $5 million turnover threshold
the capital gains tax (CGT) concessions, which continue to have a $2 million turnover threshold
For previous income years, you are a small business if your turnover is less than $2 million.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.