Prime Minister Scott Morrison revealed the single largest economic rescue package in Australia’s history on 30 March 2020. The $130b “JobKeeper” wage subsidy is a flat $1,500 fortnightly payment to all businesses significantly affected by coronavirus to retain their employees and provide a cushion for the economy.

Under the original scheme (JobKeeper 1.0), the payments will be made monthly in arrears from 1 May 2020 to cover fortnightly periods commencing 30 March 2020 and ending on 27 September 2020. 

On 21 July 2020, the JobKeeper scheme (2.0) was extended from 28 September to 28 March 2021, with changes to eligibility, including an extended decline in turnover test, an extension to cover employees employed on 1 July 2020 and introduction of two tiers of subsidy based on a 20 hours per week worked by employees in either February 2020 or June 2020.  Further modifications were announced on 7 August 2020.

The JobKeeper subsidy will be administered by the ATO on a self-assessment basis. Businesses can register their interest online now

You can find a detailed JobKeeper guide for employers reporting through Single Touch Payroll here.

Key dates

While we are working with clients to work through a number of the critical steps in this process, you should be aware of a number of enrolment steps that must be taken for your business to qualify for the JobKeeper payments.

  • From 20 April: enrol for JobKeeper payment
  • By 31 May: enrol and pay your employees to claim JobKeeper payments for April
  • 4 May onwards: identify your employees
  • Each month: reconfirm eligibility
  • End date for JobKeeper 1.0 is 27 September 2020
  • JobKeeper 2.0 starts from 28 September 2020 and runs until 28 March 2021

Employee eligibility

Under JobKeeper 1.0 employees must have been in your employment on 1 March 2020, and must continue to be employed while you are claiming the JobKeeper subsidy. This extends to employees who have been stood down or re-hired. As announced on 7 August, JobKeeper will now be extended to employees that were employed as of 1 July 2020. Other eligibility criteria include:

  • Full-time, part-time or fixed-term employees as at 1 July 2020, or casuals employed on a regular and systematic basis for at least 12 months as at 1 July 2020 and not a permanent employee of any other employer.
  • They must be aged 18 years or older at 1 July 2020 (16 and 17 year olds can qualify if they are independent and not undertaking full time study).
  • They are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.
  • They are a resident for Australian tax purposes on 1 March 2020.
  • Not in receipt of a JobKeeper subsidy from another employer.

Self-employed individuals operating through partnerships, trusts or companies may also be eligible to receive JobKeeper subsidy.

Salaries and wages should continue to be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available. If you do not report through Single Touch Payroll, you can still claim the JobKeeper subsidy through a manual claim process.

JobKeeper 2.0

The first phase of JobKeeper was designed to get money out to businesses as quickly as possible. An unintended consequence of this was some employees being paid more on JobKeeper than they had been before COVID. Companies were also able to access JobKeeper if they satisfied the turnover test at any point during COVID, however going forward, there will be much greater scrutiny on changes in revenue.

  • The current turnover test will be substantially tightened for each quarter.
  • To qualify for the December 2020 JobKeeper, businesses must meet the decline in turnover test for the September 2020 quarter.
  • To qualify for the March 2021, JobKeeper, businesses must meet the decline in turnover test for the December 2020 quarter.
  • The decline in turnover must be determined with reference to actual GST turnover (and not projected GST turnover).
  • The flat $1,500 payments will be replaced by a new two-tiered payment system to reflect the pre-COVID working hours of employees.

20+ hours a week

<20 hours a week

Until 27 September 2020

$1,500 a fortnight $1,500 a fortnight

From 28 September 2020

$1,200 a fortnight $750 a fortnight

From 4 January 2021

$1,000 a fortnight $650 a fortnight

The JobKeeper payment will remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

Alternative “turnover decline” tests

On 23 April 2020, the ATO released alternative “turnover decline” tests to assist employers to satisfy the decline in turnover test for JobKeeper 1.0 purposes where they cannot satisfy the existing primary test by comparison to 2019 turnover.

These alternative tests are expected to be modified to accommodate the changes to the decline in turnover test in JobKeeper 2.0.

The alternative tests for JobKeeper 1.0 cover a number of specific classes of “unusual” circumstances including:

  • The business commenced before 1 March 2020 but after the relevant comparison turnover period
  • Business acquisition or disposal has changed the entity’s turnover
  • Business restructure has changed the entity’s turnover
  • Business had a substantial increase in turnover
    • 50% or more in the 12 months immediately before the applicable turnover period
    • 25% or more in the 6 months immediately before the applicable turnover period
    • 12.5% or more in the 3 months immediately before the applicable turnover period
  • Business affected by drought or natural disaster
  • Business has an irregular turnover
  • Sole trader or small partnership with sickness, injury or leave

If one of these classes of circumstances apply, an employer can select the corresponding alternative test(s). Examples of the alternative tests include testing over the most recent 3 months, comparing with a pre-2019 year or using monthly or quarterly averages over the past year.

The above alternative tests do not cover other common circumstances where employers were looking for specific ATO guidance, for example, start-up/exploration employers with no turnover, employers with specific badly impacted divisions or employers who only provide input-taxed supplies. It is unclear if the ATO will introduce further alternative tests to assist employers under these circumstances.

You can read more on the ATO website here.

Business eligibility subject to “required turnover decline”

  • Businesses (including not-for-profits) with aggregated (ie including global associates and affiliates) annual turnover of up to $1b who estimate their Australian GST turnover has fallen or will likely fall by 30% or more (compared to the prior year’s period) for a month or quarter within the 30 March to 27 September 2020 period.
  • For businesses (including not-for-profits) with an aggregated annual turnover exceeding $1b, the relevant turnover decline threshold is 50%.
  • For Charities registered with the Australian Charities and Not-for-profits Commission (ACNC), the relevant turnover decline threshold is 15%. Non-government schools and higher education institutions do not qualify for the 15% threshold.

Government entities and entities subject to the Major Bank Levy will not be eligible for the package.

The turnover decline will require that turnover of a current period be compared with a comparable period of a year earlier (of at least one-month duration).

How is turnover determined?

The GST turnover test for the purposes of the JobKeeper subsidy is a modified version of the GST turnover test included in the GST law.

Modified GST turnover test for JobKeeper subsidy purposes

The GST turnover test in the GST law is modified for the purposes of the JobKeeper subsidy to:

  • require the inclusion of supplies made by one member of a GST group to another member of a GST group
  • extend the definition of ‘indirect tax zone’ to include external Territories, so that supplies made in the external Territories are captured (such supplies are usually not caught for GST purposes); and
  • extend the definition of ‘supply’ for ‘consideration’ (being two critical requirements for a ‘taxable supply’ to be triggered) to include a gift received or likely to be received (except from an associate) by:
    • a deductible gift recipient, with the value of the gift being equal to the amount of the gift (if the gift is money) or the market value of the gift (if the gift is not money); and
    • an ACNC registered charity (other than a deductible gift recipient), with the gift being equal to the amount of the gift (if the gift is money) or the market value of the gift if the gift is property with a market value of more than $5,000 or listed Australian shares.
GST turnover test in the GST law

In calculating its GST turnover for GST purposes, a business needs to capture all taxable and GST-free supplies, but exclude the following:

  • input taxed supplies (e.g. financial supplies and residential rent);
  • supplies that are not made for monetary and/or non-monetary consideration;
  • supplies made by one member of a GST group to another member of a GST group;
  • supplies not connected with the indirect tax zone (usually considered to mean supplies not connected with Australia);
  • supplies not made in connection with an enterprise being carried on;
  • certain supplies connected with the indirect tax zone; and
  • certain GST-free supplies made by non-residents.

The following are also disregarded when determining GST turnover:

  • settlements of insurance claims;
  • certain ‘reverse charged’ supplies;
  • the transfer of capital assets and termination etc of an enterprise;
  • the value of loans of money or digital currency; and
  • certain supplies of employee services by overseas entities.

In addition to the above, specific consideration also needs to be given to the following in determining GST turnover:

  • principal to principal (subdivision 153B) agency arrangements;
  • the value of non-taxable supplies; and
  • the value of gambling supplies.

Further, whilst the current and projected GST turnover tests for GST purposes essentially refer to a twelve (12) month period, this too is modified for the purposes of the JobKeeper subsidy (refer to the comments below with respect to the ‘turnover test period’).

When is the turnover decline test satisfied?

A business satisfies the decline in the turnover test if, at the time of testing, the entity’s projected GST turnover for a turnover test period falls short of the entity’s current GST turnover for a relevant comparison period.

This shortfall then needs to be expressed as a percentage of the comparison turnover and compared against the turnover decline percentage applicable to the business (i.e. 30%, 50% or 15% turnover decline).

What is the turnover test period?

The turnover test period must be under JobKeeper 1.0:

  • a calendar month that ends after 30 March 2020 and before 1 October 2020; or
  • a quarter that starts on 1 April 2020 or 1 July 2020.

This was extended in JobKeeper 2.0 to include the September 2020 quarter for eligibility until 3 January 2021 and the December 2020 quarter for eligibility until 28 March 2021.

What is the relevant comparison period?

The relevant comparison period must be the period in 2019 that corresponds to the turnover test period.


Impacted Retailer Pty Ltd (“Impacted Retailer”) is a subsidiary of Retailer Group Limited (“Retailer Group”). Retailer Group also has another subsidiary, Online Retailer Pty Ltd (“Online Retailer”).

Impacted Retailer has a GST turnover of less than $1b. Further, the combined GST turnover of Impacted Retailer, Retailer Group and Online Retailer does not exceed $1b.

Impacted Retailer assesses its eligibility for JobKeeper subsidy in respect of its employees on 8 April 2020 based on an actual GST for the September 2020 quarter of $10m.

The comparable period is the September 2019 quarter, for which Impacted Retailer had an actual GST turnover of $15m.

Impacted Retailer’s September 2020 quarter acual GST turnover falls short of the September 2019 quarter turnover by $5m, which is 33.33% of the September 2019 quarter actual GST turnover. This 33.33% shortfall percentage exceeds the specified percentage turnover decline percentage of 30% that applies to Impacted Retailer. Therefore, the decline in the turnover test is satisfied by Impacted Retailer and it is eligible for the JobKeeper subsidy from 28 September 2020 to 4 January 2021.

Impacted Retailer does not need to account for turnover in other group companies in determining whether it is eligible.

Payments subsidised by JobKeeper exempt from Payroll Tax?

NSW Only additional payments that an employer makes to bridge the gap between their employee’s normal wage and the $1500 a fortnight required to qualify for JobKeeper payments.
NT Yes
SA Yes
VIC Only additional payments that an employer makes to bridge the gap between their employee’s normal wage and the $1500 a fortnight required to qualify for JobKeeper payments.
WA Yes