The Australian Government has introduced the JobMaker Hiring Credit. The payment provides an incentive for employers to hire young job seekers, by delivering a payment to employers to help support the new employee’s wage costs.
Eligible employers can receive the payment for up to 12 months (between 7 October 2020 to 6 October 2021) for new jobs that employ an eligible young person.
How much is it worth?
Employers will be credited $200 a week for additional employees aged 16 to 29 years and $100 a week for new employees aged 30 to 35 years who meet the eligibility criteria.
What are the eligibility rules?
The new employee must:
- be aged between 16 to 35 years at the start of their employment
- have received the JobSeeker Payment, Youth Allowance or Parenting Payment for at least for at least 28 consecutive days within the 84 days prior to being employed in their new position
- have worked at least 20 paid hours per week on average for the full weeks they were employed during the reporting period
- complete an employee notice for JobMaker Hiring Credit supplied by their employer
- have not completed a JobMaker employee notice for another employer they are still working for.
The employee must not:
- be an employee for whom the employer is receiving another Commonwealth wage subsidy such as an apprenticeship or traineeship wage subsidy
- be an employee for whom another employer is claiming JobMaker Hiring Credit
The employer must:
- have an Australian Business Number (ABN)
- be registered for pay as you go (PAYG) withholding
- report through Single Touch Payroll (STP)
- be up to date with their tax lodgement obligations
- meet the following additionality criteria each month before claiming a credit:
- the total employee count must increase after 30 September 2020
- payroll must also increase for the reporting period, as compared to the three months to 30 September 2020
- claim the credit in respect of an eligible employee
- have kept adequate records of paid hours worked by the eligible employee
- have a minimum of one existing employee
- increase both their total employee headcount from 30 September 2020 and increase their payroll for the reporting period (7 October 2020 to 6 October 2021) compared to the three months to 6 October 2020.
Additionally, the employer must not be:
- a Commonwealth, State or Local Government agency or a sovereign entity
- an entity in liquidation or having entered bankruptcy
- subject to the major bank levy
- receiving a wage subsidy under another Commonwealth program (such as JobKeeper) at the same time as claiming a JobMaker credit.
What are the key dates?
- 30 September 2020 – the reference date for comparison of increased employee headcount and payroll (as compared to the previous three months)
- 7 October 2020 – the date from which credit claims are valid (employees must commence employment after this date)
- 7 December 2020 – registrations open for eligible employers via ATO online services
- 6 January 2021 – end of the first reporting period
- 1 February 2021 – the date from which the first credit can be claimed quarterly in arrears from the ATO, for new jobs created between 7 October 2020 and 6 January 2021
- 6 October 2021 – the end of the eligibility period for credit claims (employees must commence before this date)
Can new employing businesses claim credits?
If a business is newly established or has no employees as at 30 September 2020, they can only claim the credit for the second and subsequent new eligible employee.
How is the claim made?
The second step is to identify, nominate and report eligible additional employees through their STP-enabled software.
The claim can then be made by the employer every three months from 1 February 2021 via ATO online services, the ATO business portal or via a registered tax or BAS agent.
- The employer’s additionality criteria (the employee headcount and the payroll) must remain higher than they were as at 30 September 2020 for them to remain eligible for the credit each month.
- The credit payments can only be received for 12 months for each additional position created.
- The amount of hiring credit can’t exceed the amount of increase in payroll for the reporting period.
Further information on how employers can register for the JobMaker Hiring Credit with the ATO will be published as it becomes available.