Announcements
We understand 2020 has been difficult and we're here to try and make it easier during tax time. Search posts, read articles or ask a question.

ATO Community

JobKeeper - tax, super and annual leave?

Highlighted

Newbie

Views 9469

Replies 17

When I pay my employees JobKeeper, do I treat it as normal? Do I withhold tax, pay super on it? Should these earnings contribute to the employee earning annual leave?'

1 ACCEPTED SOLUTION

Accepted Solutions
Highlighted

Best answer

ATO Certified

Master

Replies 15

The $1,500 per fortnight is a before tax amount so you'll need to withhold tax along with any other payments each fortnight. 

 

You'll also need to continue paying super for any hours that your employees work (in accordance with applicable super legislation). It looks like the government is going to introduce new super rules to ensure employers only need to pay super in respect to an employee's actual employment ie the hours they have actually worked. So if an employee does work that entitles them to $1000 pay, the employer needs to top the payment up to be $1500 for the fortnight but they'll only need to pay super contributions based on the $1000 earned.  

In terms of annual leave, your employees should continue to accrue this durign Jobkeeper in line with their employment conditions. See Fairwork's website for more info on this: https://www.fairwork.gov.au/leave/annual-leave

17 REPLIES 17
Highlighted

Best answer

ATO Certified

Master

Replies 15

The $1,500 per fortnight is a before tax amount so you'll need to withhold tax along with any other payments each fortnight. 

 

You'll also need to continue paying super for any hours that your employees work (in accordance with applicable super legislation). It looks like the government is going to introduce new super rules to ensure employers only need to pay super in respect to an employee's actual employment ie the hours they have actually worked. So if an employee does work that entitles them to $1000 pay, the employer needs to top the payment up to be $1500 for the fortnight but they'll only need to pay super contributions based on the $1000 earned.  

In terms of annual leave, your employees should continue to accrue this durign Jobkeeper in line with their employment conditions. See Fairwork's website for more info on this: https://www.fairwork.gov.au/leave/annual-leave

Highlighted

Newbie

Replies 4

Thank you! I've been trying to get through to the call centres but haven't had much luck 

Highlighted

Newbie

Replies 3

Can I please state the response above is not correct.

 

Please view the link for the ATO site attached:

 

Information as per the ATO site is: ato.gov.au/general/jobkeeper-payment/employers/paying-your-eligible-employees/#Superannuation

Superannuation guarantee

New rules are being introduced by the government with the intention to not require super guarantee to be paid on additional payments that are made to employees as a result of JobKeeper payments. We will update this information once legislation or regulations are in place.

What you can’t do

You cannot claim the JobKeeper payment on behalf of employees who were not paid at least $1,500 (before tax) during each JobKeeper payment period.

You cannot claim the JobKeeper payment in advance. The JobKeeper payment is a reimbursement from us to an employer in arrears, and cannot be paid in advance in any circumstances.

Highlighted

Initiate

Replies 2

The response seems correct to me.

If an employee earns $1,000.00 for the fortnight, you pay Super on this amount as normal.

In order to claim JobKeeper for this employee, you must top up their wage to $1,500.00.

You are not required to pay Super on the top up amount. I believe the response and the FAQ both address this.

Highlighted

Newbie

Replies 0

That does make sense KelMC,

both my accountant and bookeeper and my QBO site are saying no super payable, but paying on the top up amount does make sense.

 

It seems to be an evolving issue with the ATO. This is current as of today 29/4 on the ATO site.

 

New rules are being introduced by the governemnt with the intention to NOT require super guarantee to be paid on additional payments that are made to employers as a sresult of JobKeeper payments. We will update this information once legislation or regulations are in place.

 

Highlighted

Initiate

Replies 0

I think the confusion here has arisen from the gov's use of the term 'top up' in multiple places.

They've called the JobKeeper funds to businesses to pay wages a 'top up'.

But you can also 'top up' their JobKeeper $1500 to their full wage (if they earned, say, $2000 regularly.) by contributing more funds yourself.


@KelMc wrote:

The response seems correct to me.

If an employee earns $1,000.00 for the fortnight, you pay Super on this amount as normal.

In order to claim JobKeeper for this employee, you must top up their wage to $1,500.00.

You are not required to pay Super on the top up amount. I believe the response and the FAQ both address this.



@KelMc wrote:

The response seems correct to me.

If an employee earns $1,000.00 for the fortnight, you pay Super on this amount as normal.

In order to claim JobKeeper for this employee, you must top up their wage to $1,500.00.

You are not required to pay Super on the top up amount. I believe the response and the FAQ both address this.



@KelMc wrote:

The response seems correct to me.

If an employee earns $1,000.00 for the fortnight, you pay Super on this amount as normal.

In order to claim JobKeeper for this employee, you must top up their wage to $1,500.00.

You are not required to pay Super on the top up amount. I believe the response and the FAQ both address this.


 

Highlighted

Initiate

Replies 3

How does this relate to the FAQ put forth by Treasury? https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_payment_frequently_asked_questions.pdf

 

"AM I REQUIRED TO PAY PAYGW AND SUPERANNUATION ON THE JOBKEEPER PAYMENT? You must pay a minimum of $1,500 per fortnight to your eligible employees, withholding income tax as appropriate. The $1,500 per fortnight per employee is a before tax amount. Where an employee is paid more than $1,500 per fortnight, the employer’s superannuation obligations will not change. Where an employee is having their wages topped up to $1,500 per fortnight by the JobKeeper Payment, it will be up to the employer if they want to pay superannuation on any additional wages paid by the JobKeeper Payment."

 

This suggests to me that the employer is only required to pay super if that wage exceeds $1,500 per fortnight?

Highlighted

Newbie

Replies 2

Yes you are correct WANDER, the information provided seems incorrect.

 

Latest update :ato.gov.au/general/jobkeeper-payment/employers/paying-your-eligible-employees/#Superannuation

 

Superannuation guarantee

New rules are being introduced by the government with the intention to not require super guarantee to be paid on additional payments that are made to employees as a result of JobKeeper payments. We will update this information once legislation or regulations are in place.

Highlighted

Newbie

Replies 1

I find the wording unclear. It appears that if you are still employing an employee and paying them $1000 per fortnight,  you pay them $1500/fortnight instead to qualify for JobKeeper and then continue to pay super on the $1000 you would normally pay. That is sort of straight forward. But what happens if an employer has stood down employees and they are not working at all because the business is not allowed to open due to COVID19 restrictions? The employer pays the employees $1500 per fortnight, the employees take the payment and stay at home because the business is not allowed to open. What super is the employer obligated to pay? As the employees are working no hours for the business, is the answer zero?