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The Government has updated the Superannuation Guarantee regulations in relations to Jobkeeper payments. These changes provide clarity for employers in regards to how they calculated superannuation guarantee payments for employees receiving Jobkeeper.
The changes to the Superannuation Guarantee (Administration) Regulations 2018 to ensure that:
These changes exclude from ‘salary and wages’ for the purposes of calculating the employer’s superannuation guarantee (SG) shortfall, amounts that are paid to an employee to satisfy the ‘wage condition’ under the Jobkeeper Scheme to the extent that such payments exceed payments for the performance of work. Payments made to satisfy the wages condition would otherwise be considered salary or wages and ordinary times earnings.
The following examples best illustrate how these changes work.
Liz is a full-time employee who usually earns $3,000 per fortnight. As a result of the Coronavirus, her employer issues a Jobkeeper enabling stand down direction and reduces her hours of work. She now earns $2,000 per fortnight for the performance of work. Liz’s employer is entitled to Jobkeeper payments for her.
During the Jobkeeper fortnight beginning on 25 May 2020, Liz takes five days of personal leave at full-pay. Her employer pays her $2,000 for that fortnight: $1,000 for the days she worked, and $1,000 in relation to the taking of personal leave.
Liz’s salary or wages and ordinary time earnings for the fortnight are $2,000.
The Regulations do not apply as the salary or wages paid to Liz do not exceed the amount required to be paid to her for the performance of work.
The minimum superannuation contribution her employer must make to avoid a SG charge liability for the relevant quarter is 9.5 per cent of Liz’s ordinary time earnings. Her ordinary time earnings will include the $2,000 she was paid in respect of the fortnight.
Superannuation Guarantee amount payable: $2,000 x 9.5% = $190
Rachael is a part-time employee who continues to earn her usual wages of $1,000 per fortnight. To satisfy the wage condition for Jobkeeper payment for Rachael, her employer pays her an additional $500 per fortnight so that she is paid a total of $1,500 per fortnight. Rachael’s employer is entitled to Jobkeeper payments for her.
The additional payment of $500 is excluded from being salary or wages because it is paid by Rachael’s employer for the purpose of satisfying the wage condition and is not paid to Rachael for the performance of work. Therefore, Rachael’s salary or wages and ordinary time earnings for the fortnight are $1,000.
The minimum superannuation contribution her employer must make in order to avoid a liability to SG charge for the relevant quarter is 9.5 per cent of Racheal’s ordinary time earnings. Her ordinary time earnings will include the $1,000 she was paid in respect of the fortnight.
Superannuation Guarantee amount payable: $1,000 x 9.5% = $95
Erin is a long term casual employee who was earning approximately $1,750 per fortnight. As a result of the Coronavirus, she has been stood down by her employer. Her employer has a reasonable expectation of participating in the Jobkeeper Scheme and satisfies the wage condition in respect of Erin by paying her $1,500 for the first Jobkeeper fortnight.
After making the payment to Erin, her employer discovers that they are not entitled to Jobkeeper payment for Erin under the Jobkeeper Rules.
However, the Regulations still apply as the payment of $1,500 is considered salary or wages paid to Erin in respect of a Jobkeeper fortnight.
As Erin remains stood down, the entire amount is excluded from being salary or wages as it is paid by her employer for the purpose of satisfying the wage condition and is not paid to Erin for the performance of work.
Therefore, Erin’s salary or wages and ordinary time earnings for the fortnight are nil. This means her employer is not required to make a superannuation contribution in respect of Erin for the fortnight in order to avoid a liability to SG charge.
Superannuation Guarantee amount payable: Nil
Nelson is a long term casual employee who earns $400 in April 2020 for the performance of work. To satisfy the wage condition for Jobkeeper payment for Nelson, his employer pays him $400 for the month, plus an additional $2,600, totalling $3,000 before tax for that month.
Nelson’s employer is entitled to Jobkeeper payments for him.
The additional payment of $2,600 is excluded from being salary or wages because it is not an amount that is required to be paid to Nelson for the performance of work.
The remaining $400 is also excluded from being salary or wages under new s. 12A(3) of the SGA Regs because his earnings in relation to the performance of work during the calendar month are less than $450.
Therefore, Nelson’s salary or wages and ordinary time earnings for the month of April are nil. This means his employer is not required to make a superannuation contribution in respect of Nelson for that month in order to avoid a liability to SG charge.
Superannuation Guarantee amount payable: Nil
The Explanatory Statement is available here.
Although the above intricacies of how superannuation and Jobkeeper payments work together can be complex, fortunately for employers using Xero as their payroll system ensuring the correct payments are made to employees is simplified.
If you have any questions regarding how to calculate superannuation guarantee payments for employees receiving Jobkeeper, please contact your Quill Relationship manager or contact us if you need assistance with your business accounting or payroll needs.
The Queensland Government has activated a new $10,000 COVID-19 Small Business Grants scheme to assist small and micro businesses impacted by Coronavirus to access funding for the purposes of “business adaptation”.
IMPORTANT: This grant is now closed, but Round 2 opens 1 July 2020:
Round 2 of the QLD Small Business COVID-19 Adaption Grants will open 1 July 2020
Apply for round 2 of the grant
To be eligible for the $10,000 COVID-19 small business grants, the business must:
Only 1 application will be accepted from an individual ABN or a financial beneficiary of a business.
Successful applicants cannot reapply for funding under this grant program.
The $10000 COVID-19 small business grants can be used towards the following
Note: Grant funds can also be used towards any of the above activities occurring from 23 March 2020 onwards, keeping in mind the project must be completed within a maximum of 6 months from the date of approval.
Once the program budget has been fully allocated, applications for the program will close. It is estimated that approximately 10,000 small businesses will be supported through this program.
Applying small and micro businesses must meet the eligibility and assessment criteria to be considered for funding.
To apply, complete the following steps:
In addition to meeting the eligibility criteria, applications will be assessed against the following:
Funding will be paid upon approval of your grant application. Within 1 month of completing the project, applicants must:
Grant recipients may be subjected to a random audit by DESBT to ensure that the information provided is true and correct. Where it is found that false or misleading information has been provided, penalties may apply, including refunding to DESBT some or all of the grant funding.
If you need assistance with the application for the QLD Government $10,000 COVID-19 Small Business Grants scheme please contact your Quill Relationship Manager for more information.
This article on business interruption insurance and COVID-19 has been provided by Berren Hamilton from Stone Group Lawyers.
The laws setting out the Federal Government’s response to Coronavirus were introduced into Parliament on 23 March 2020, the bill has now been passed by both just awaiting royal assent, with one measure being the cash flow boost for eligible employers who may receive up to $100,000 tax-free.
Am I eligible for the cash flow boost?
A business (including a charity or not-for-profit) will be eligible for the cash flow boost if it meets the following conditions.
What if the business has not historically paid salary or wages?
We have received good questions about helping clients access the boosts – in some cases where the client has not made payments subject to withholding. This may be because the owners have historically taken dividends or drawings.
The legislation contains integrity rules that prevent businesses from trying to manoeuvre into the eligibility conditions.
One condition for getting the boosts is that the client (and their agents and associates) did not enter into an arrangement for the sole or dominant purpose of getting the boosts, or getting increased boosts.
We will update this article if we receive any guidance as to whether switching from drawings/ dividends to salary, for example, when all of the other conditions are satisfied, will trigger the anti-avoidance provisions.
What do I have to do to get the cash flow boost?
Businesses will need to lodge their BASs showing the payments that are subject to withholding.
If the business is a charity or not-for-profit with no income tax notices of assessment, it will need to notify the Commissioner that it should satisfy the small to medium business entity requirement.
How much are the cash flow boosts?
There are two cash flow boosts. The minimum amount for each cash flow boost is $10,000 – so $20,000 in total. The maximum cap for each cash flow boost is $50,000 – so $100,000 in total.
Subject to the minimum amount and maximum cap, the cash flow boost is 100% of the amount that has been withheld for the period.
However, if the payment is for the month (not quarter) of March 2020, the cash flow boost is 300% of the amount that has been withheld. This means there is no difference between monthly and quarterly reporting.
How do I get the first cash flow boost?
The tax-free payment will broadly be calculated and paid by the ATO as an automatic credit to an employer, upon the lodgment of activity statements from 28 April 2020, with any resulting refund being paid to the employer. This means that:
Note that, the minimum payment of $10,000 will be applied to an entity’s first activity statement lodgment (whether for the month of March or the March quarter) from 28 April 2020.
How do I get the second cash flow boost?
The second cash flow boost is the same amount as the first cash flow boost. There are further eligibility conditions, but most will be satisfied if the business remains in business.
For employers that continue to be active, an additional (tax-free) payment will be available in respect of the June to October 2020 period, basically as follows:
The ATO will automatically calculate and pay the additional (tax-free) payment as a credit to an employer upon the lodgement of their activity statements from July 2020, with any resulting refund being paid to the employer.
If you have any questions, please contact a member of our team to discuss.
See more on the ATO Website here regarding boosting cash flow for businesses.
See the latest updates on COVID-19 and how it may affect you here.
Payroll tax refund COVID-19: At the top of the Victorian economic stimulus package is a refund of payroll tax for small businesses. Effectively, the payroll tax threshold applies to Victorian entities with Australian taxable wages less than $3m for the 2019/20 income year.
As well as the payroll tax refunds, registered businesses in the hospitality, tourism, accommodation, arts/entertainment and retail industries will receive tailored support. This is in the form of a grant, and specifically not a loan.
Other measures announced include deferral of certain land tax payments, and rent relief for businesses renting government premises.
Detail:
The Victorian Government has established an economic survival package to support Victorian businesses and workers through the devastating impacts of the COVID-19 pandemic.
The $1.7 billion Economic Survival Package complements the work of the Federal Government.
The package includes the following key programs.
Payroll Tax Refund
Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived. This will support 24,000 businesses and up to 400,000 workers.
The State Revenue Office will directly contact eligible businesses to reimburse them for payroll tax already paid in the financial year.
Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year.
These businesses can also defer paying payroll tax for the first quarter of the 2020-21 financial year.
More information about the administration of these relief measures will be sent directly to eligible businesses.
Visit www.sro.vic.gov.au
Liquor licence fees waived | Payroll tax refund COVID-19
Renewable liquor licence fees for 2020 will be waived. Businesses that have already paid will be reimbursed.
The State Revenue Office will administer the reimbursement, regardless of whether the licence fee was paid to it or the Victorian Commission for Gaming and Liquor Regulation.
Visit www.sro.vic.gov.au
Business Support Fund
The $500 million Business Support Fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.
The Government will work with the Victorian Chamber, Australian Hotels Association and Australian Industry Group to deliver the Fund, which will help these businesses – which may not be eligible for payroll tax refunds due to their size – survive and keep people in work.
Visit www.business.vic.gov.au
Working for Victoria Fund | Payroll tax refund COVID-19
Under the $500 million Working for Victoria Fund, displaced workers will be eligible to apply for different types of work. This presents opportunities for paid work and an opportunity to contribute to Victoria’s ability to manage this event and support the community.
Some displaced workers will have skills that can be readily transferred to new roles. The Government can also assist skills development or help people in obtaining immediate accreditation to commence work.
The Government will work across the public sector, local government, the not-for-profit sector and key private sector employers to facilitate job matching.
Visit www.vic.gov.au/workingforvictoria
Land tax deferral
Landowners that have at least one non-residential property and total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment until after 31 December 2020.
The State Revenue Office will contact all taxpayers who are eligible for this deferral.
Visit www.sro.vic.gov.au
Fast tracking outstanding supplier invoices
The Government will pay all outstanding supplier invoices within five business days – releasing up to $750 million into the economy earlier. The private sector is urged to do the same where possible.
Rent relief for commercial tenants in government buildings
The Government will work directly with commercial tenants in government buildings who can apply for rent relief. Private landlords are also being encouraged to provide rent relief or holidays to help businesses.
Business Victoria HOTLINE
Businesses across the state can now access information on dealing with COVID-19 by calling the Business Victoria hotline on 13 22 15.
Coronavirus (COVID‑19) updates
For the latest updates and advice on the novel coronavirus in Victoria, visit the DHHS website:
www.dhhs.vic.gov.au/coronavirus
Mental health and wellbeing during the Coronavirus COVID-19 outbreak
The outbreak of the coronavirus COVID-19 has impacted people in varying ways on an international scale. It is understandable during times like this that people may be feeling afraid, worried, anxious and overwhelmed by the constantly changing alerts and media coverage regarding the spread of the virus.
While it is important to stay informed, lifeline.org.au and beyondblue.org.au have some mental health and wellbeing tips and strategies to continue looking after ourselves and each other during these difficult times.
To contact Lifeline:
Phone:
13 11 14 (24 hours/7 days)
Text:
0477 13 11 14
(6pm – midnight AEDT, 7 nights)
Chat online:
www.lifeline.org.au/crisis-chat
(7pm – midnight, 7 nights)
To contact Beyond Blue:
Phone:
1300 22 4636 (24 hours/ 7days)
Chat online:
www.beyondblue.org.au/get-support/get-immediate-support (3pm – 12am, 7 days)
Email:
online.beyondblue.org.au/email/
Get a response in 24 hours
Read more:
https://www.premier.vic.gov.au/economic-survival-package-to-support-businesses-and-jobs/
See the latest updates on COVID-19 and how it may affect you here.
The State Government of NSW has released a business support package to alleviate the impact of the COVID-19 outbreak. The State Government has mainly focused on providing assistance through the payroll tax relief, as the intention is to help businesses keep their employees on the payroll.
NSW has opted to waive payroll tax for businesses with Australian taxable wages of up to $10m for the three months leading to 30 June 2020.
The stimulus package will help to protect communities and jobs in the face of the COVID-19 outbreak over the next six months.
Key elements of the NSW COVID-19 package include:
Business support and jobs | NSW COVID-19 business support
Read more:
https://www.nsw.gov.au/news-and-events/news/health-boost-and-economic-stimulus/
See the latest updates on COVID-19 and how it may affect you here.