JobMaker Hiring Credit
- Board Advisory
- Managing a Business
The Australian Government has established the JobMaker Hiring Credit program with an allocated budget of $4 billion by the government. It is expected to open around 450,000 positions from 2020-2021.
The program is a government incentive for business owners and to assist the young people in accessing job opportunities and reduce long-term unemployment as Australia’s economy is slowly recovering from the pandemic.
We outline below the eligibility criteria and intricacies of the new program.
For an employer to qualify for this program, it must satisfy the following:
- Period is a JobMaker period (refer below)
- The employer elects to participate in the JobMaker program
- Carries on a business in Australia
- Registered on the Australian Business Register (ABN)
- Tax lodgment obligations are up to date
- Registered for PAYG Withholding Reporting through Single Touch Payroll (STP)
- Business must not be receiving JobKeeper
- Business must not be an excluded employer (sovereign entities, local government, in liquidation or subject to a major bank levy)
Once an employer is eligible it may claim the hiring credit every 3 months in arrears (for a maximum of 12 months per employee) from the Australian Taxation Office (ATO).
Starting 7 October 2020, the eligible employers may claim hiring credit if eligible employees are:
- within 16 to 29 years old a $200 is claimable per week
- within 30 to 35 years old a $100 is claimable per week
For additional employees to be eligible, they must satisfy the following requirements:
- Currently employed by the employer during the Jobmaker period
- Should be employed in the entity within the age range of 16 to 35 years old
- Work an average of at least 20 hours per week.
- Commencement of employment between 7 October 2020 and 6 October 2021
- Received at least one of the pre-employment payments for at least 28 days in the 84 days before hired:
- JobSeeker Payment
- Youth Allowance
- Parenting Payment
- Inform the employer that they have satisfied the requirements.
- Confirm they have not given another entity a notice that they wish to participate in the JobMaker program.
JobMaker Hiring Credit payment qualification and periods
JobMaker calendar consists of eight periods:
JobMaker periods are three-monthly periods starting on 7 October 2020 and ending on 6 October 2022:
- JM1 — 7 October 2020 to 6 January 2021;
- JM2 — 7 January 2021 to 6 April 2021;
- JM3 — 7 April 2021 to 6 July 2021;
- JM4 — 7 July 2021 to 6 October 2021;
- JM5 — 7 October 2021 to 6 January 2022;
- JM6 — 7 January 2022 to 6 April 2022;
- JM7 — 7 April 2022 to 6 July 2022; and
- JM8 — 7 July 2022 to 6 October 2022.
For JobMaker Hiring Credit to take effect, the employee is required to be in an additional job starting 7 October 2020. An additional job can be considered if it meets an increase of the following for the additional criteria starting from the reference date of 30 September 2020:
- Total headcount of employees in the business with a minimum of one employee
- Payroll increase
The figure for the baseline headcount may be changed for the fifth and subsequent JobMaker periods.
Steps on how to qualify for the Hiring Credit payment
- Select a JobMaker period
- The reported total payroll should be higher than the supposed baseline payroll
- Total headcount at the end of the JobMaker period should be higher than the set baseline headcount
- Report the total number of hours worked by the eligible additional employee/s during the JobMaker period aged 16-29 and 30-35.
The figures are calculated to assure that the employers do not exceed the number of maximum payable days will be validated and determined through the net increase in the headcount for the period.
If you would like assistance in determining your eligibility for the JobMaker Hiring Credit, schedule a consultation with us today!