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JobKeeper Rules

JobKeeper Rules

JobKeeper Rules

The following is a summary of JobKeeper Rules as released by the Treasurer on 11 April. These outline the mechanics of the JobKeeper wage subsidy implementation, however embedded within are several opportunities for the Commissioner of Taxation to exercise his discretion to expand the application of certain rules if it is reasonable to do so. How this discretion will be exercised remains to be seen, however the ATO has been cooperative and generally helpful during the recent weeks, and we hope will continue to be so in the future.

Period covered

30 March 2020 to 27 September 2020

Eligibility for payments is determined in respect of every fortnight, with the first fortnight beginning on 30 March.

Administered by

The ATO, which has now released the first tier of guidance on JobKeeper implementation.

Amount & payment

$1,500 per fortnight per eligible employee – this is a flat reimbursement amount for the payment that must have already been passed on to the eligible employee in full.

The Commissioner must make the payment for a fortnight no later than the later of:

  • 14 days after the end of the calendar month in which the fortnight ends; and
  • 14 days after the Commissioner is satisfied that the employer or business is entitled to the payment for the fortnight.

This means that, while entitlement to a payment is assessed in relation to a JobKeeper fortnight and the amount is a fortnightly amount, an entitled employer or business will receive the JobKeeper payment monthly.

For example, a participating employer with one eligible employee who qualifies for both fortnights in June 2020 will generally receive $3,000 by 14 July 2020.


There are multiple levels and test of eligibility for each entity, tested at different times, described below.

1. Eligibility test – entity existence, activities and turnover

An entity becomes eligible at the time it meets all of the following requirements:

  • On 1 March 2020 the entity carried on a business in Australia, or was a non-profit body that pursued its objectives principally in Australia
  • The entity was not a major bank, a government agency/local government body or owned by one, or in liquidation/bankruptcy proceedings
  • The entity satisfies the reduced turnover test before the end of the fortnight. Note, the turnover test only needs to be satisfied once.
  • JobKeeper payments can only be received in respect of eligible employees
  • The wage condition must be satisfied in relation to passing the payments on to eligible employees
  • The employer must elect to participate and once the employer entity qualifies, it will need to provide monthly reports of its turnover to the ATO while the JobKeeper subsidy is operational, i.e. until 27 September. The reported turnover figures do not affect JobKeeper eligibility.

Additional eligibility criteria are in place for entities that have key individuals working in the business who are paid by means other than wages, e.g. trust or partnership distributions, dividends, directors fees. These are covered below in the Additional rules for business owners section.

2. Reduced Turnover Test

The test needs to be satisfied before an entity becomes eligible for the JobKeeper payment. Once this occurs there is no requirement to retest in later months. If an entity does not qualify for the month of April 2020 because its turnover has not been sufficiently affected, it can test in later months to determine if the test is met.

Requirements to meet the test:

  • A 30%* reduction in projected turnover for the test period as compared to the actual turnover for the corresponding period in 2019
  • The test period is:
    • A calendar month that ends between April and September 2020 OR
    • A quarter starting on 1 April or 1 July 2020
  • The turnover is calculated according to the same principles as for GST reporting purposes and excludes the following:
    • The GST component you charge your customers
    • Sales that aren't for payment and aren't taxable
    • Sales not connected with an enterprise you run
    • Input-taxed sales you make (e.g. residential rental, interest)
    • Sales not connected with Australia.
  • For charities, the turnover calculation will include gifts and donations.
  • The ATO will develop alternative reduced turnover tests that may be available in specific situations. An alternative test for new entities with no 2019 comparison figures is expected.
  • Monthly ongoing reporting of the turnover will be required but will not affect JobKeeper eligibility.

* For businesses with aggregated turnovers above $1b, the turnover reduction must be 50% to qualify. For charities other than schools and universities, the reduction threshold is 15%.

3. Eligible Employees

Test each employee’s eligibility fortnightly, with the first fortnight starting on Monday 30 March. An employee must qualify on or before the end of the fortnight for the employer to receive a JobKeeper payment in respect of them, for that fortnight.

An individual is an eligible employee of an entity for a test fortnight if:

  • The individual is employed by the entity at any time in the fortnight; and
  • The individual was, on 1 March:
    • 16 or older
    • A permanent employee or a casual employee who had been employed by the entity on a regular and systematic basis during the period of 12 months up to 1 March (“long-term casual”)
    • An Australian citizen or a permanent resident (or a holder of one of specific visa types)
  • At any time during the relevant fortnight, the individual was:
    • an employee of the employer
    • not receiving Paid Parental Leave or Paid Dad and Partner Pay
    • not incapacitated for work and receiving workers compensation payments
  • The employee has notified the employer by giving a Nomination Notice:
    • Confirming that they satisfy the above requirements
    • The employee agrees to be nominated by the entity as an eligible employee
    • If they are a long-term casual employee, confirming that they are not a permanent employee of another employer
    • Confirming they have not given a Nomination Notice in respect of another employer


  • The employer cannot select which eligible employees will participate in the JobKeeper scheme. This ‘one in, all in’ rule is a key feature of the scheme.
  • Qualifying employers that decide to participate in the JobKeeper scheme must, as a condition of entitlement, notify all employees in writing that they have elected to participate in the scheme and that their eligible employees will all be covered by the scheme.
  • The Rules provide some flexibility for any changes in ownership of a business and movement of employees within the same wholly-owned group.
  • A person who is employed by one or more qualifying employers will need to choose one employer that will receive the JobKeeper payments for their employment.
  • Once an employee has nominated an employer and the employer has received JobKeeper payments in respect of the employee and has paid the employee, they cannot nominate a different employer. If for any reason, the employment relationship between an eligible employee and their nominated employer ends, the employee will not be able to have another employer qualify for the JobKeeper payments in respect of their new employment. Such a person may become entitled to receive other Government support, including the JobSeeker payment.
  • If an employee has nominated more than one employer to receive the JobKeeper payment, the employee does not satisfy the nomination requirements required to be an eligible employee. This means that no employers will be able to nominate the person under the JobKeeper scheme in the future.
  • If an overpayment results from an individual fraudulently nominating more than one employer, the individual will be jointly and severally liable to pay the overpayment and general interest charge on the overpayment.

4. Wage condition

An employer must pay each participating employee at least $1,500 for each relevant fortnight. This reflects the practical operation of the JobKeeper scheme in which the JobKeeper payment is essentially a reimbursement to an employer of $1,500 where the employer has paid a participating employee at least that amount.

The component amounts that together must equal or exceed $1,500 are:

  • salary, wages, commission, bonus or allowances (less PAYG withholding) – generally, this means the employee’s income before tax;
  • amounts withheld from payments made to the employee in the fortnight – generally, this means amounts withheld by the employer for income tax or a HECS-HELP loan;
  • contributions made in the fortnight to a superannuation fund or an RSA (retirement savings account) for the benefit of the employee, if the contributions are made under a salary sacrifice arrangement;
  • amounts that, in the fortnight, are applied or dealt with in any way as agreed with the employee, in return for salary and wages being reduced – generally, this means amounts forming part of salary sacrifice arrangements.


The requirement that the component amounts be at least $1,500 applies regardless of whether the employee ordinarily receives more or less than that amount. For example if an employee:

  • ordinarily receives $1,500 or more in income per fortnight before PAYG withholding and other salary sacrificed amounts, and their employment arrangements do not change they will continue to receive their regular income according to their workplace arrangements. The JobKeeper payment will assist the employer to continue operating by subsidising all or part of the income of the employee;
  • ordinarily receives less than $1,500 in income per fortnight before PAYG withholding and other salary sacrificed amounts, the employer must pay the employee at least $1,500 per fortnight, subject to PAYG withholding and other salary sacrificed amounts to the value of $1,500;
  • has been stood down, the employer must pay the employee at least $1,500 per fortnight, before PAYG withholding and other salary sacrificed amounts to the value of $1,500; or
  • was employed on 1 March 2020, subsequently ceased employment with the employer, and then has been rehired by the same eligible employer, the employer must pay the employee at least $1,500 per fortnight, before PAYG withholding and other salary sacrificed amounts to the value of $1,500.

ATO guidance in relation to April wages:

"For the first two fortnights (30 March – 12 April and 13 April – 26 April), we will accept the minimum $1,500 payment before tax has been paid for each fortnight even if it has been paid late, provided it is paid by the end of April. This means that [the employer] can make two fortnightly payments of at least $1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April."

Pay periods less frequent than fortnightly

If an employer’s ordinary arrangement is to pay its employees less frequently than fortnightly, then the payment can be allocated between fortnights in a reasonable manner. For example, if an employer’s ordinary arrangement is to pay an employee every four weeks, it may be reasonable for the purposes of satisfying the wage condition if the employee is paid at least $3,000 for every four week period.

Commissioner's discretion

The Rules provide that the Commissioner of Taxation may treat a particular event that happened in a fortnight as having happened in a different fortnight or fortnights if the Commissioner’s opinion is that it is reasonable to do so. It is envisaged that this discretion may be exercised in case of accidental one-off underpayments, however the ATO guidance will provide further details.

Superannuation guarantee

An employer will only need to make superannuation contributions for any amount payable to an employee in respect of their actual employment, disregarding any extra payments made by the employer to satisfy the wage condition for getting the JobKeeper payment.

For example, if the work actually done by an employee over a period entitled them to be paid $1,000, but the employer instead paid them $1,500 to satisfy the wage condition for a JobKeeper fortnight, then the employer will only be required to make superannuation contributions in relation to $1,000.

An employer will still be required to make the same superannuation contributions for an employee whose pay exceeds the JobKeeper payment. For example, if an employee is entitled to be paid $2,000 for their work, the employer will continue to be required to make contributions in relation to that amount, irrespective of whether they were eligible to receive the JobKeeper payment in relation to the employee.

An employer will not be required to make superannuation contributions for an employee who is stood down. If an employer pays a stood down employee $1,500 to satisfy the wage condition for receiving the JobKeeper payment, then the entire amount will be disregarded for superannuation guarantee purposes.

5. Elections and reporting

Election to participate

An employer must notify the Commissioner in the approved form of the employer’s election to participate in the JobKeeper scheme before the employer can be entitled to a payment for a fortnight.

This election generally needs to be provided to the Commissioner before the end of a relevant fortnight for the employer to be entitled to a payment for that fortnight. Special timing rules apply to the first fortnight:

Fortnight from 30 March - elect by 26 April

Fortnight from 13 April - elect by 26 April

For all subsequent JobKeeper fortnights, the employer will need to notify the Commissioner of the employer’s election to participate in the scheme before the end of the particular fortnight.

Employers that have difficulty meeting the timing requirements may seek such a deferral from the Commissioner.

Reporting - employees

To be entitled to a JobKeeper payment for a fortnight, the employer must have provided the following information to the Commissioner in the approved form:

  • the details of each eligible employee; and
  • other information about their entitlement to the JobKeeper payment.

It is anticipated that the Commissioner may require the following details for each eligible employee in the approved form:

  • the name of the employee;
  • the type of the employee’s employment; and
  • the employee’s citizenship or residency status.

Once an employer has provided details of its eligible employees to the Commissioner, the employer must also notify each eligible employee within 7 days.

Changes to employee information

If the information provided to the Commissioner does not subsequently change in the following fortnights, an employer is not required to provide the same information to the Commissioner again.

However, where there is a change of circumstances – for example, a person who was an eligible employee for the previous fortnight is no longer an eligible employee for the relevant fortnight – the employer must notify the Commissioner of this in the approved form before the end of the relevant fortnight to satisfy the notification requirements for entitlement to a payment for that fortnight.

Monthly reporting - turnover
An entity that is entitled to a JobKeeper payment for a fortnight must notify the Commissioner of:
• its current GST turnover for the reporting month; and
• its projected GST turnover for the following month.

The reporting month is a month in which there is a fortnight for which the entity is entitled to a JobKeeper payment. The report must be made to the Commissioner in the approved form, and must be made within 7 days of the end of the reporting month.

The information provided as part of this report does not affect an entity’s eligibility, including in respect of the decline in turnover test (which only needs to be satisfied once). It is also not intended to verify whether the projection given as part of the decline in turnover test was accurate.

It is intended to ensure that there is good information on which to assess the economic impact of the Coronavirus on a monthly basis across Australia.

Additional rules for business owners

The rules described above apply to business owners who are also employees of their own businesses, however they will not include owners who are not employees. Such individuals, referred to as "business participants" in the rules, may still be eligible for JobKeeper payments.

Additional rules apply to business participants who are not employees, such as sole traders, partners of partnerships, adult beneficiaries of a trust, or directors or shareholders of a company.

Additional entity eligibility tests

  • The entity must have:
    • Had an ABN as at 12 March 2020
    • Had assessable income in the 2019 year in relation to its business as evidenced by:
      • the entity’s 2019 tax return if lodged by 12 March 2020 AND/OR
      • sales disclosures in the Activity Statements lodged up to 12 March 2020 for the periods beginning from 1 July 2018.
  • The entity must not be a non-profit body;
  • An entity must notify the Commissioner of its election to participate in the JobKeeper scheme and the details of the nominated individual.
  • A business is not entitled to a JobKeeper payment under the business participant rules for more than one individual. If a business has more than one eligible participant, the business can only be entitled to receive the JobKeeper payment in relation to one of the individuals. It is up to the business to determine which individual is nominated as the eligible business participant.
  • An individual can only create an entitlement for one entity. A business is not entitled to a JobKeeper payment for an individual if another business is also entitled for the same individual (whether as a business participant or an employee).

Eligible business participant

An individual is an eligible business participant where the individual:

  • is not employed by the business at any time in the fortnight (that is, because the individual is the owner of the business i.e. a nominated business participant, not an employee of the business);
  • satisfies the business participation requirements at any time in the fortnight;
  • satisfies the 1 March 2020 requirements; and
  • satisfies the nomination requirements.

These are discussed below in more detail.

The business participation requirements are that, at any time in the fortnight, the individual is actively engaged in the business carried on by the entity, i.e. the individual must be actively engaged in the operations and activities of the entity.

Further, depending on the type of entity the business is, the individual must have a particular role within the business:

  • sole trader—the individual must be the entity;
  • partnership—the individual must be a partner in the partnership;
  • trust—the individual must be an adult beneficiary of the trust;
  • company—either a director or shareholder in the company.

The 1 March 2020 requirements are that, on that date, the individual:

  • was aged 16 years or over;
  • satisfied the business participation requirements (described above); and
  • satisfied the Australian residency requirement.

The nomination requirements are that the individual has agreed to be nominated by the entity as an eligible business participant and has not agreed to be nominated by another entity. This individual must make this notification in the approved form. Further, the individual must not have given a nomination notice to any other entity.

Also at the time of nomination as an eligible business participant the individual must not also be a permanent employee of an employer. This ensures that individuals do not qualify in relation to a business as an eligible business recipient if they have a separate permanent source of employment income. Individuals who have a permanent source of employment can nominate to receive the JobKeeper payment through their permanent employer.


A person is not an eligible business participant for a fortnight if parental leave pay is payable to the person, the person is paid dad and partner pay, or the person is incapacitated for work and an amount is payable to the person in accordance Australian workers’ compensation law.

Additional information

Treasury factsheets

ATO JobKeeper page

Please don't hesitate to contact us with any questions or concerns.


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The content of this newsletter is general in nature. It does not constitute specific advice and readers are encouraged to consult their Ruddicks adviser on any matters of interest. Ruddicks accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. This information is current as at 14 April 2020, and was published around that time. Ruddicks particularly accepts no obligation or responsibility for updating this publication for events, including changes to the law, the Australian Taxation Office’s interpretation of the law, or Government announcements arising after that time.

Any advice provided is not ‘financial product advice’ as defined by the Corporations Act. Ruddicks is not licensed to provide financial product advice and taxation is only one of the matters that you need to consider when making a decision on a financial product. You should consider seeking advice from an Australian Financial Services licensee before making any decisions in relation to a financial product. © Ruddicks 2020

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