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How JobKeeper payments may impact your taxes

tax-timeHow each State defines JobKeeper payments may affect your business’s reportable wages for payroll tax and worker’s compensation.

If your business received JobKeeper payments, you may be eligible for payroll tax exemption on the JobKeeper component of wages paid.

Jump ahead to see how your state defines the payments:

South Australia

(Workcover)

The ReturnToWorkSA Board decided that wage subsidy payments under the Commonwealth Government JobKeeper Program will NOT be considered remuneration for calculation of premium for 2020-21.

What does this mean? If you chose to have your 2020-21 premium calculated based on an estimate of remuneration you will need to exclude JobKeeper payments from the actual remuneration when you complete the 2020-21 remuneration return.

If you chose to have your 2020-21 premium calculated based on the 2019-20 remuneration you will need to include JobKeeper payments in the actual remuneration when you complete the 2020-21 remuneration return (these employers will not receive an end of year adjustment).

Our flexible premium model means that for 2021-22, you will still be able to choose whether to have your premium based on the 2020-21 actual remuneration (with no end of year adjustment) or an estimate of your 2021-22 remuneration (with an end of year adjustment when actual remuneration is known).

Employer remuneration returns are due between 2 July and 15 September 2021.

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South Australia

(Payroll Tax)

Are JobKeeper payments subject to payroll tax?

No, these payments are not subject to payroll tax.

The amount payable does not need to be included in the total salaries and wages declared in your monthly return.

However, your business will need to report the JobKeeper payment amounts separately in RevenueSA Online.

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Northern Territory

(Payroll Tax)

Employers receiving the Australian Government’s JobKeeper payments for employees working in the Northern Territory will not have to pay payroll tax on those payments.

Declaring JobKeeper payments

A new ‘JobKeeper payments’ field has been added to the INTRA lodgement screen so registered employers can declare these payments when lodging their returns to ensure the payments are deducted from their gross wages.
Note: Wages declared in the JobKeeper payments field must first be declared in the ‘gross wages’ field.

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Northern Territory

(Workcover)

 

JobKeeper payments made to workers who are not performing any duties will be excluded from the wages used to calculate premiums. If an employee is working at a reduced capacity and is in receipt of top-up payments made through the JobKeeper subsidy, only the wages earned for hours worked will be used in the calculation of premiums.

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Western Australia

(Workcover)

Employers are required to provide a wage declaration to their insurer when effecting or renewing a workers’ compensation insurance policy.

A declaration of ‘estimated’ wages payable to workers is made for the relevant forthcoming period for new or renewed policies (usually annually). A declaration of ‘actual’ wages must also be provided at the end of a period of insurance.

As the Job Keeper is a top-up or subsidy and not payment for work completed, wages declared should reflect the amount paid to workers for the period of work that has been done. Therefore, any top-up JobSeeker subsidy payments should not be declared as part of wage declarations.

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Western Australia

(Payroll Tax)

The new regulations ensure Western Australian businesses will continue to be exempt from payroll tax on payments provided under the extended scheme.

ACT

(Workcover)

 

https://www.worksafe.act.gov.au/__data/assets/pdf_file/0006/1635702/act-private-sector-workers-compensation-scheme-jobkeeper-payments.pdf

 

ACT

(Payroll Tax)

 

JobKeeper Payments

  • Businesses were exempt from any payroll tax on wages subsidised by the Commonwealth JobKeeper payment scheme from 30 March 2020 until 28 March 2021.

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Queensland

(Workcover)

Will JobKeeper payments be considered declarable wages under the Workers’ Compensation and Rehabilitation Act 2003 (the ‘Act’)?

Do not consider additional amounts paid to employees as a result of the JobKeeper Payment Scheme for the purposes of calculating premium. This applies where workers are stood down without pay, or payments to workers are being topped up so that the employer can access JobKeeper payments.

When an employer pays these additional amounts to workers, the payments are a top-up or subsidy payment and not a payment for work done. The additional amounts are paid to the worker so that the employer meets a condition that allows the employer to access payments under the JobKeeper Payment Scheme. Payments made for this purpose are not declarable wages.

Where employers are continuing to engage workers, they should still declare wages paid in exchange for labour, services or personal exertion. This is even where these amounts are then subsidised by JobKeeper payments that the employer receives.

Where eligible employers are paying additional amounts to workers because the worker’s wages are otherwise less than the JobKeeper ‘wage condition’ per fortnight, then only the wages for work done must be declared. Any top up amount as part of JobKeeper payments, does not need to be declared.

Employers should exclude any amounts paid to workers who are stood down without pay (other than the JobKeeper payment per fortnight) as this is not a payment for work done.

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Queensland

(Payroll Tax)

JobKeeper and payroll tax

JobKeeper payments are exempt from Queensland payroll tax. When calculating  your threshold amount and the payroll tax rate, you do not include JobKeeper payments.

If you pay an employee more than the JobKeeper amount, the extra amount is liable for payroll tax.

When you lodge your returns:

  • include any extra amounts in the ‘Taxable wages’ section
  • include the JobKeeper amount itself in the annual return (in the ‘Other non-taxable wages’ section).

 

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New South Wales

(Payroll Tax)

What amounts of the JobKeeper payments are exempt?

In NSW, an exemption from payroll tax is available for any top up payment amounts an employer must make to meet the JobKeeper rate. Other amounts of wages paid or payable to or in relation to the employee, are taxable wages and not entitled to the exemption.

How do I work out the liable and exempt components paid to NSW employees I have received JobKeeper payments for?

Any top up amount that an employer must pay to meet the JobKeeper rate is exempt from payroll tax.

The payroll tax exemption is only available in situations where:

  1. An employer tops up wages paid to an employee to meet the JobKeeper rate per fortnight.
  2. An employer pays an employee who has been stood down or not performing work an amount equal to (but not exceeding) the relevant JobKeeper rate per fortnight.

If an employee is paid a wage above the JobKeeper wage condition per fortnight there will be no top up payment and the whole wage amount is taxable for payroll tax.

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New South Wales

(Workcover)

 

JobKeeper payments where your worker is not working and not earning wages does not need to be declared as wages.

If your business is receiving the JobKeeper allowance you only need to include in your actual wages declaration, the portion paid to your worker for the hours they worked during the period in which JobKeeper was paid.

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Scenario Worker “in hibernation” and receiving JobKeeper Allowance only Worker working and earning more than just the JobKeeper Allowance Worker working and earning only the JobKeeper Allowance Worker at work and earning less than the JobKeeper Allowance (but their pay is increased under JobKeeper)
Example  Worker earns no wages Worker earns $2,000 per fortnight (including JobKeeper subsidy) Worker only earns JobKeeper Allowance Worker earns $500 per fortnight but receives payment in line with the JobKeeper Allowance
What do you declare? Nil declarable as wages $2,000 declarable as wages JobKeeper Allowance declarable as wages $500 declarable as wages
Victoria

(Payroll Tax)

Any additional payments you make to bridge the gap between an employee’s normal wage and the $1500 per fortnight required to qualify for JobKeeper payments are exempt from payroll tax:

 

  • For employees who have come to an agreement with their employer to be stood down and not perform any work, the full $1500 paid to them is exempt from payroll tax.
  • For employees paid less than $1500 per fortnight, the payroll tax exemption applies to the difference between their wage and the $1500. For example, to qualify for a JobKeeper payment, an employer must pay an additional $500 to an employee who earns $1000 a fortnight. This additional payment of $500 is exempt from payroll tax.

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Victoria

(Workcover)

JobKeeper Payments to meet the $1500 threshold will not affect the calculation of the WorkCover premium and are not regarded as rateable remuneration.

 

Example 1 Example 2 Example 3
·  Employee is stood down without pay.

·  The employee does not perform any work and does not receive normal pay

·  The employee recieves the JobKeeper wage subsidy of $1500 per fortnight via their employer

·  The JobKeeper wage subsidy of $1500 per fortnight is not regarded as rateable remuneration.

· Employee continues to work.

· The employee usually earns $1000 per forthnight

· The employer is paying an additional $500 per fortnight via the JobKeeper Payment

· The additional $500 passed onto the employee is not regarded as rateable remuneration

· Normal earnings of $1000 is considered rateable remuneration.

· Employee continues to work

· The employee usually earns earns $2500 per fortnight

· The employee continues to earn $2500 per fortnight but this is partially sibsidised by the JobKeeper payment via the employer

·  $2500 is considered rateable remuneration.

 

 

 

 

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Tasmania

(Workcover)

 

JobKeeper payment to a worker is only to be considered for the purposes of workers compensation insofar as the payment is a return for the exercise of labour or skill on the part of the worker.

In short, this means that Job Keeper payment is not included in the calculations for an employer’s wage declaration or a worker’s weekly compensation benefits, where:

  1. the JobKeeper payment is made to a worker who has been stood down and is not working; or
  2. the JobKeeper payment is above the worker’s normal wages (and the worker is working).

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Tasmania

(Payroll Tax)

 

Payroll tax is waived for JobKeeper Wages in Tasmania.

 

Refer to the following instructions to determine the amount of wages to include in taxable wages (that is wages paid in Tasmania) for both the monthly and annual adjustment return.

  1. Employees with wages higher than the JobKeeper Wages Where an employee receives a higher fortnightly wage than the JobKeeper Wages, tax must be paid on the amount of the wage that exceeds the JobKeeper Wages. Payroll tax is not payable on the portion of the wage that is the JobKeeper Wages.

For example, an employee is receiving wages of $2 000 per fortnight. Payroll Tax is waived on $1 500 JobKeeper Wages but is payable on $500. Only include $500 in your taxable wages on your return.

  1. Employees with usual wages lower than the JobKeeper Wages Where an employee usually receives a fortnightly wage lower than the JobKeeper Wages, and is now paid an amount equivalent to the JobKeeper Wages, payroll tax is not payable on the full amount of their Jobkeeper fortnightly wage. Do not include the Jobkeeper payment in your taxable wages on your return.
  2. Employees who have been stood down Where an employee usually receives a higher fortnightly wage than the JobKeeper Wages but now is only paid the amount equivalent to the JobKeeper Wages, tax is not payable on the full amount of their Jobkeeper fortnightly wage. Do not include the Jobkeeper payment in your taxable wages on your return.

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