There are plenty of small businesses, and sole traders, who have been hit hard financially during recent weeks and some still to feel the effects. While I typically have just been dishing up information regarding individuals and the support that is available to them during this pandemic, I realise a number of my clients and followers may be sole traders or have a small business.
You might be confused about what you need to do, how to enrol or whether you even qualify for the JobKeeper payment. I’d like to hope you have a great accountant who is steering you in the right direction, but a lot of you might do your own books and might not be in regular contact with them, so I’ve summarised some key pieces of information for you and provided relevant links so you can more easily find the information you need. I’m certainly not an expert in this area (or a registered tax agent), but I’ve read plenty of threads on various social media pages, and even websites, with inaccurate information, so make sure you go to the ‘source’ for information. If you think you might qualify, it’s worth registering and I’d encourage you to speak with your accountant or tax professional to discuss your situation if you are unsure and agree on who is going to do what.
Quick overview on Jobkeeper eligibility for Employers and Sole Traders
The JobKeeper payment is designed to support businesses who have suffered a decline in turnover, by supporting their employees to remain employed. It includes sole traders.
Your business needs to met eligibility requirements and your employees do also. The details for these can be found here:
The JobKeeper Payment is administered by the Australian Taxation Office (ATO).
The best sources of information can be found on the following websites:
More specific information on Jobkeeper for ‘sole traders’ can be found here
Firstly, how to calculate a fall in turnover:
One of the key criteria is that your business has suffered a decline in turnover (for businesses with turnover under $1billion, the decline needs to be 30% or more). The ATO has detailed information on how to determine the fall in turnover and they provide the following guidance:
To work out your fall in turnover, you can compare either:
- GST turnover for March 2020 with GST turnover for March 2019
- projected GST turnover for April 2020 with GST turnover for April 2019
- projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.
How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, though you can do that if it is easier.
For the detailed overview on the fall in turnover is determined click here to access the ATO site.
A question was raised to me about a sole trader who has suffered a decline in turnover, however they aren’t registered for GST. I haven’t been able to locate any guidance for this situation and from what I can understand, more information will be provided from the ATO on an alternative test. If you are in this situation, it’s worth registering, keeping updated by the ATO and seeking advice from your tax professional.
How to apply
You will be able to enrol in the JobKeeper scheme from 20 April 2020 via the ATO Business portal (details in the ATO’s guide, link below). You or a registered Tax Agent can do this. After you enrol, you will later identify your specific eligible employees and submit the information to the ATO.
The ATO has a step-by-step guide on how to apply for the Jobkeeper payment, with all the steps you need to take and the relevant links to submit your application.
It’s important to note that if you are intending to claim JobKeeper payments for April, you must enrol by the end of April.
You can register your interest and subscribe to updates about the JobKeeper payment here register your interest for the JobKeeper Payment
Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
You can enrol from the 20th of April, by submitting a form on the ATO website, and payments are available up until the 27th of September 2020.
There are monthly ongoing reporting requirements that need to be made to the ATO, but you only need to meet the turnover test on application.