In the 2020/2021 Federal Budget, the Government introduced a job hiring incentive in a bid to secure and create more job opportunities in the economy. JobMaker provides eligible employers a credit for new employee positions created.
With JobKeeper now ended, it is appropriate to consider JobMaker. JobMaker can provide employers a subsidy of up to $10,400 for each new employee position created.
For an employer to be eligible, it needs to show that a new employee increases the total number of its employees compared to a baseline employee headcount.
For the first year of operation, the baseline employee headcount is the number of employees employed on 30 September 2020. After the first year of operation, an increase in headcount is based on the previous years’ figure.
The employer must also meet various regulatory and compliance hurdles, such as
- be up to date with their tax lodgement obligations;
- be registered for PAYG withholding, and
- be reporting payroll through STP.
Finally, an employer cannot “double dip”. You cannot claim JobMaker for an employee where you are also claiming a federal government apprentice/trainee subsidy.
Eligible employees must:
- commence employment between 7 October 2020 and 6 October 2021;
- be between 16 and 35 years of age (inclusive) on the date of commencement;
- work at least 20 hours per week over the relevant 3-month period, and
- have been eligible to receive JobSeeker, Youth Allowance or Parenting Payment for at least 28 consecutive days during the 84 days prior to the commencement date of employment.
An individual is taken to be eligible for JobSeeker on a particular day if the individual would have been eligible to receive a payment, but that payment or allowance is reduced to nil by the Social Security Act 1991. This includes a situation where the payment is reduced to nil due to the individual’s partner earning more than the maximum allowable amount under the JobSeeker rules (although other conditions apply).
What is the benefit?
The credit varies depending on the age of the new employee:
- $200 per week if the new employee is aged 16 to 29 years old, or
- $100 per week if the new employee is aged 30 to 35 years old.
However, the credit in a particular quarter is limited to the gross increase of overall payroll for the relevant baseline period. For example, if an employer was eligible to receive $12,000 of credits, but only had an increase in payroll of $6,000, during the quarter the allowable credit is limited to the smaller amount.
JobMaker will run from 7 October 2020 to 6 October 2022 and will have a maximum claim period of 12 months, capping at $10,400 per each new position created.
Administration and lodgements
JobMaker is administered by the ATO, and claims can be made quarterly.
Like JobKeeper, an employee will be required to notify their employer on commencement that they are an eligible employee under the scheme. As part of this nomination, the employee will disclose that they have not provided another nomination form to another employer.
The employer must notify the ATO details in relation to each eligible new employee, such as TFN, date of birth, full name, date employment commenced and ceased (if occurred during the JobMaker period) and whether the employee met the average hours of the work requirement.
Each lodgement will also require an employer to disclose the information relevant to the JobMaker period to show employer eligibility, including total payroll expenses for the quarter compared to the baseline payroll amount, total head count at the end of the period compared to the baseline headcount for the period and confirmation that each employee included in the claim calculation is an eligible new employee.