Part 2 – Budget reminders. Under the Hood.
The 2020 Federal Budget was one of the most far reaching and complex ever brought in. This is the second of three articles to remind us of important topics the budget addressed.
Changes to the JobKeeper Payment Scheme
These changes to the JobKeeper Payment schemes have been reported earlier.
After 3 August 2020 the employment reference date for assessing employee eligibility changed from 1 March 2020 to 1 July 2020.
The logic for this, is that after first lockdown, some employers hired new staff that then were stood down or disadvantaged by second lockdown.
The decline in turnover test for assessing employer eligibility for the December 2020 and March 2021 quarters, must be met only in the previous quarter – from 28 September 2020.
The decline in turnover eligibility criteria have been changed from 28 September 2020 so that employers are required to demonstrate that their actual turnover was sufficiently affected in the previous quarter (rather than in every quarter from June 2020 onwards) to be eligible for the payment in the December 2020 and March 2021 quarters.
Other aspects of scheme have been reaffirmed – end date is 28 March 2021. Several tiers now apply, and regular reporting is required.
Note – superannuation guarantee rules still apply, although they have become more complex.
Personal Tax Reduction
A further recovery measure to encourage consumer spending is from tax cuts. Lower personal tax occurs when tax rates apply at a higher threshold. This change will apply immediately on PAYG (employee) deductions.
The Government has brought forward the second stage of its legislated Personal Income Tax Plan from 1 July 2022 to 1 July 2020.
The top threshold of the 19% personal income tax bracket will increase from $37,000 to $45,000.
The top threshold of the 32.5% personal income tax bracket will increase from $90,000 to $120,000.
The maximum amount of the Low Income Tax Offset will increase from $445 to $700.
The Low and Middle Income Tax Offset – capped at $1,080 – will be retained for the 2020-21 income year.
Payroll packages will implement the new rates as soon as the Australian Taxation Office provides appropriate guidance.
JobMaker Hiring Credit
Another incentive to encourage economic recovery is a subsidy for new employment.
The Government will provide $4 billion over the next three years from 2020-21 to accelerate employment growth by supporting organisations that take on additional employers through a hiring credit.
The JobMaker Hiring Credit will be available to eligible employers over 12 months from 7 October 2020 for each additional new job they create for an eligible employee. The credit will be:-
- $200 a week for each additional eligible employee they hire aged 16 to 29 years old
- $100 a week for each additional eligible employee aged 30 to 35 years old
The employee must be in an additional job created from 7 October 2020. To demonstrate this, there must be an increase in:-
- the employer’s total employee headcount (minimum of one additional employer) from the reference date of 30 September 2020
- the payroll of the business for the reporting period as compared to the three months to 30 September 2020
To be eligible, an employee must:-
- have worked at least 20 paid hours per week on average for the full weeks they were employed over the reporting period
- have commenced their employment between 7 October 2020 and 6 October 2021
- have received the JobSeeker Payment, Youth Allowance (other) or Parenting Payment for a least one month within the past three months before they were hired.
This will be administered through a yet to be created Australian Taxation Office sub-system.
Eligible employers will be able to claim quarterly in arrears from the Australian Taxation Office. Claims open from 1 February 2021.
AcctWeb
Hot Issues
- FBT Reminder – Odometer Reading
- ATO’s debts on hold campaign prompts new IGTO guidance
- A comprehensive collection of small business benchmarks
- The 2025 Financial Year tax & super changes you need to know!
- Underperforming employees: When can you terminate?
- A comprehensive list of guides to industry specific tax deductions.
- ‘Renewed concerns’ about economy sees consumer sentiment dip: Westpac
- Oldest Buildings in the World.
- Small businesses may ‘collapse under strain of payday super’, IPA warns
- ATO’s hands tied with scrapping on-hold debts, expert says
- What Drives Your Business Growth and Profits?
- Australian Taxation Office (ATO) shifting to firmer debt collection activity
- Why employee v contractor comes down to fine print
- Sharing economy reporting regime for platform operators
- Countries producing the most solar power by gigawatt hours
- Illegal access nets $637 million
- Accessing superannuation benefits.
- Does your business have a company Power of Attorney?
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- GrantConnect
- 2 in 3 SMEs benefit from instant asset write-off, survey reveals
- Updated guidance on R&D claims
- Do you know how to recover debts?
- Wheat Production by Country
- Types of small business benchmarks
- What is a Commercial Lease?
- ATO warns advisers against suspect R&D tax claims
- Vimeo test
Article archive
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
October - December 2020 archive
- 2020 is coming to an end. Phew!!
- Victorian State Budget Overview 2020 - 2021
- Employee Christmas Parties and Gifts – Any FBT?
- FBT – Christmas Parties and Taxi Fares
- JobMaker hiring credit given green light despite ongoing concerns
- Super, death, and taxes
- ATO extends JobKeeper deadlines ahead of Christmas
- Small-business coronavirus grants set to be income tax-free under new bill
- How Australians are taking advantage of income tax cuts
- Part 1 – Budget reminders. Under the Hood.
- Part 2 – Budget reminders. Under the Hood.
- Part 3 – Budget reminders. Under the Hood.
- Comprehensive list of COVID-19 initiatives and packages.
- Businesses not meeting obligations warned as ATO restarts compliance programs
- Employers cautioned over ‘hard and fast’ decline in turnover eligibility
- ‘Follow the spirt of the law’, warns ATO
- $120m in JobKeeper clawed back by ATO, new compliance areas highlighted
- Budget 2020 - A very comprehensive break down.
- Budget 2020 - Fact Sheets
- Budget 2020 - At a Glance, Overview, Outlook
- Temporary home office expenses shortcut extended again
- JobKeeper extension – changes implemented
- JobKeeper Participants – are “workers”
- Commissioner registers updated JobKeeper alternative tests
- Varying Pay As You Go (PAYG) Instalments
- Reminder of Medicare Levy Surcharge (MLS)
What our clients say about us