Australia: “JobKeeper” program guidance, procedures (COVID-19)

Australia: “JobKeeper” program guidance, procedures

The Commissioner of Taxation on 23 April 2020 released the legislative instrument under the “JobKeeper” program that is intended to provide employment-related relief in response to the coronavirus (COVID-19) pandemic.


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Under the JobKeeper program, employers will need to reconfirm that reported eligible employees have not changed so that employers will continue to receive the JobKeeper payments from the Australian Taxation Office (ATO). An employer does not need to retest the reported decrease in turnover, but will need to provide some information as to its current and projected turnover. This will be done in the employer’s monthly JobKeeper declaration report.

An employer or a registered tax professional can file for the JobKeeper payment. Each month, if the employer’s eligible employees change or leave the employment, the employer will need to notify the ATO through the monthly JobKeeper declaration report.

The Commissioner of Taxation’s legislative instrument sets out how the Commissioner intends to apply a number of discretionary actions under the JobKeeper rules. To be eligible for JobKeeper payments, an employer entity must, among other things, satisfy a decline in turnover test. The Commissioner has the discretion to approve an alternative decline in turnover test for a class of entities, when there would not be any appropriate comparison period under the basic test in the JobKeeper rules. The Commissioner can be expected to use this power sparingly.

If an entity satisfies the basic test, but also would be within the scope of one of the alternative tests, then that entity passes the decline in turnover test, regardless of what the outcome under the alternative test might have been.

The Commissioner has specified the alternative comparison period that entities can use in the following circumstances (note that the summary below is based on a turnover test period of a month; if the entity has a turnover test period of a quarter, then the principles are to be adapted accordingly):

  • An entity that commenced business less than 12 months before the test period can generally use the average monthly goods and services tax (GST) turnover for the whole months of trading ending before 1 March 2020, or the average GST turnover for the three months ending before 1 March 2020.
  • An entity that has acquired or disposed of all or part of a business, or businesses, or has undertaken a business restructure during the 12 months preceding the test period with a consequential impact on the entity’s turnover, can generally use a comparison period of the first month that commences after the most recent acquisition.
  • An entity that has, broadly, experienced an annualised increase in turnover of 50% or more in the quarter, half-year or year immediately preceding the test period can generally use a comparison period of the average of the GST turnover for the three months immediately preceding the test period.
  • An entity for which the lowest GST turnover quarter in the 12 months preceding the test period was no more than 50% of its highest GST turnover quarter (other than due to cyclical factors) can use its average monthly turnover for that 12 month period as the comparison.
  • An entity whose business was operated wholly or partly in a declared drought or natural disaster zone during the comparison period for the basic test can generally use the corresponding period in the year preceding that declaration as its comparison period.
  • A sole trader or small partnership with no employees can use the month immediately after the return to work of a principal or partner as the comparison period, if that individual was unable to work during all or part of the comparison period for the basic test due to sickness, injury or leave.

For more information, contact a KPMG tax professional in Australia:

Andy Hutt | +61 2 9335 8655 |

Jenny Wong | +61 2 9335 8661 |

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