Australian Taxation Office

JobKeeper Payments – Enrolling & Applying

The ATO have released more information relating to the recent JobKeeper payments as part of the Government stimulus package.

 

Please follow the below steps to ensure that your business can receive these payments for eligible employees:

  1. Register your interest at https://www.ato.gov.au/Job-keeper-payment/
  2. Check that your business and your employees are eligible through https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Eligible-employers/ and https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Your-eligible-employees/
  3. Ensure that you pay the minimum of $1,500 per fortnight (before tax) to eligible employees from 30th of March – if you already pay them this amount or more then you just need to continue as usual. If you pay any employees less than the minimum amount then you will need to ensure that you include the difference in their payroll and pay them the net amount. Note that the difference is not subject to superannuation so you do not have to accrue extra super for employees. Also note that you are still eligible if the minimum amounts are paid late but you will need to ensure that they are paid by the end of April – these payments are unfortunately just a reimbursement so you will only get paid after you make the minimum payments to employees first.
  4. Notify your employees if you are intending to claim the payment for them
  5. Complete the JobKeeper employee nomination notice with your employees by the end of April through https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/
  6. Enrol with the ATO for the payments either through your business portal or your tax agent from 20th of April – please email us at admin@chestertonaccounting.com if you require us to enrol your business
  7. Apply to claim the first monthly payment with the ATO either through your business portal or your tax agent from 4th of May (ensure that you have paid the minimum payments to your employees first)
  8. Reconfirm each month with the ATO your payroll details and any changes that have occurred to continue receiving monthly payments

 

Below is an ATO link which provides more detailed information regarding the above steps.

 

https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Enrol-and-apply-for-the-JobKeeper-payment/

Working From Home Deductions

The ATO has announced a new easier method for claiming home office expenses due to the increase of people working from home due to the COVID-19 lockdown.

Workers will now be able to claim hours worked in their home at a rate of 80 cents per hour. This method will cover all home office expenses from 1st of March 2020.

If a person worked from home prior to this date then the usual method of claiming home office expenses would be used. However, you can still choose to use the pre-existing method after March if you prefer to do so or it will result in a higher claim.

 

Examples of the two different methods are listed below:

Pre-existing method

Hours spent working at home (this covers electricity and home office furniture) = 456 hours x 52 cents per hour = $237.12

Home internet – 60% for work purposes = $162

Mobile phone – 40% for work purposes = $84

Depreciation of laptop – 70% for work purposes = $116

Total claim = $599.12

 

New method

Hours spent working at home (this covers all home office expenses) = 456 hours x 80 cents per hour = $364.80

 

As seen in the above calculations, in this instance the pre-existing method will result in a higher claim.

We recommend that if you are working from home then you keep records of all hours spent in your home office as well as receipts for home office expenses. This will allow you to then compare which method will be best to claim at tax time.

https://www.ato.gov.au/Media-centre/Media-releases/New-working-from-home-shortcut/

JobKeeper Payments

The Government has just announced it’s third stimulus package update in response to the coronavirus outbreak.

A wage subsidy will be available to eligible businesses and not-for-profit entities who can demonstrate a loss in revenue of 30 per cent or more when compared to the relative period a year ago. Businesses with a turnover of $1 billion or more would need to demonstrate a loss in revenue of 50 per cent.

The subsidy would include a payment of $1,500 per fortnight for each eligible employee for a period of 6 months maximum. Eligible employees are those that were employed by the business from 1st of March 2020, including those that have been stood down and sole traders. They also have to be employed under a full-time, part-time or long-term casual contract and be over 16 years of age.

If a business receives this subsidy then they must pay at least $1,500 to the employee (before tax) each fortnight. Examples below.

  • If an employee usually receives $1,000 per fortnight (before tax) then the business would now pay them $1,500 per fortnight (before tax)
  • If an employee usually receives $2,000 per fortnight (before tax) then the business would continue to pay that amount to them
  • If the business operates as a sole trader without employees and they can demonstrate a 30 per cent loss in revenue then they would receive $1,500 per fortnight

You can register your interest with the ATO by clicking on the below link. Once parliament has passed this new package, the ATO will contact you to make arrangements for the application and information required.

https://www.ato.gov.au/general/gen/JobKeeper-payment/

Economic Response to the Coronavirus

 

The Federal Parliament voted last night in acceptance of the $84 billion economic stimulus package. The bills have been passed in both the House of Representatives and the Senate.

Below is the list of key tax measures and payments that are included in the package.

Business:

  • The instant asset write-off threshold is set to be increased from $30,000 (for businesses with a turnover of less than $50 million) to $150,000 (for businesses with a turnover of less than $500 million) from 12th of March to 30th of June 2020
  • Immediate 50% deduction of the cost of an eligible asset with the balance to be depreciated under current depreciation rules for assets purchased from 12th March 2020 to 30th June 2021
  • Tax-free payments from $20,000 to $100,000 for eligible small and medium businesses that employ staff based on their PAYG withholding obligations – this will be applied as a credit of 100% of the PAYG withheld when lodging an activity statement from March to June 2020 with the ATO
  • Relief from the ATO for some tax obligations for persons affected by the Coronavirus outbreak – deferral of certain lodgements and payments
  • Temporary relief for directors from any personal liability for trading whilst insolvent
  • Wage subsidies to support employers who pay apprentices and trainees – employers who employ less than 20 full-time employees may be entitled to apply for a wage subsidy that will cover 50% of an apprentices or trainees wages for up to nine months from 1st January to 30 September 2020 with a maximum subsidy of $21,000 for each employee

Individuals:

  • Coronavirus supplement being paid by Centrelink at a rate of $550 per fortnight for eligible individuals
  • Tax-free payments of $1500 to social security, veteran and other income support recipients and eligible concession card holders
  • Temporary early release of superannuation of up to $10,000 during the 2020 financial year and a further $10,000 in the 2021 financial year – these payments will be tax-free and will not affect Centrelink payments
  • Government assistance to regions and communities that have been severely affected by the outbreak

Timing of Assistance:

  • Immediately, with deductions to be included in 2019-20 tax returns – Increased instant asset write off, accelerated depreciation
  • As soon as practicable – Support for Coronavirus-affected regions and communities
  • From 31 March 2020 – First round of $750 payments to support households
  • Applications from early-April – Assistance for existing apprentices and trainees
  • Applications from mid-April 2020 – Temporary early release of superannuation
  • From 27 April 2020 – Income support and a Coronavirus supplement
  • From 28 April 2020 – First phase of Boosting Cash Flow for Employers (tax-free PAYG credits)
  • From 13 July 2020 – Second round of $750 payments to support households
  • From 21 July 2020 – Second phase of Boosting Cash Flow for Employers (tax-free PAYG credits)

For more details, please visit the treasury website at https://treasury.gov.au/coronavirus

August Monthly Newsletter

Welcome to our August Monthly Newsletter! 

The low and middle income tax offset has now become law and will be available until 2022. The maximum offset is $1,080 and is calculated on your income level. You will receive some of this offset if your taxable income is less than $126,000.

If your taxable income:

  • does not exceed $37,000, then you will be entitled to an offset amount of $255 on any tax payable
  • exceeds $37,000 but is not more than $48,000 then you will be entitled to an offset amount of $255, plus 7.5% of the excess above $37,000 to a maximum offset of $1,080 on any tax payable
  • exceeds $48,000 but is not more than $90,000, then you will be entitled to the maximum offset amount of $1,080 on any tax payable
  • exceeds $90,000 but is not more than $126,000, then you will be entitled to an offset amount $1,080 less 3% of your taxable income above $90,000

Monthly Tax Tip:

Do you claim a portion of your mobile phone costs as a business expense? If you claim more than $50 per year then you are required to keep a four-week diary to substantiate your claim.

You could calculate this as:

Dividing the number of business calls by the total calls (e.g. 100 business calls / 400 total calls = 25%)

Dividing the time spent on business calls by the total time spent on calls (e.g. 10 business hours / 40 total hours = 25%)

Once you have calculated the percentage of business use, you can then claim that percentage of each phone bill throughout the remainder of the financial year.

Important Dates!

14 August:

  • Lodge PAYG withholding payment summary annual report

21 August:

  • Lodge and pay July 2019 monthly business/instalment activity statement

25 August:

  • Lodge and pay quarter ending 30 June 2019 activity statement if lodging electronically

28 August:

  • Lodge and pay quarter ending 30 June 2019 superannuation guarantee charge statement if contributions were not paid on time
  • Lodge taxable payments annual report*
 *You are required to lodge a TPAR if you are in the following industries and have made payments to contractors for these services: building and construction, cleaning and courier industries.

Single Touch Payroll

Are you ready for Single Touch Payroll? As of the 1st of July, every employer will be required to use some form of payroll software to report to the ATO. Xero’s Payroll Only plan is just $10 a month, allowing you to efficiently report your payroll obligations to the ATO in a matter of clicks. If you are interested in learning more or would like assistance in your account set-up then please contact our office on 07 4179 0106.

https://www.xero.com/au/features-and-tools/accounting-software/payroll/payroll-single-touch-payroll/

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