Federal Budget 2020-21 – Business Wage Subsidies

JobMaker Hiring Credit

This credit is available to employers for up to 12 months for each new job they create from 7 October 2020 to 6 October 2021 for which they hire an eligible young person, aged 16 to 35 years old.
The amount of the credit depends on the age of the employee at the start of the new employment: –

Employee Age at Start of Employment Weekly Credit Max Total Claim – 12 Months
16 to 29 $200 $10,400
30 to 35 $100 $5,200

Employers – Eligibility

Employers are eligible to receive the JobMaker Hiring Credit if they:

  • have an Australian Business Number (ABN);
  • are up to date with tax lodgement obligations;
  • are registered for Pay As You Go (PAYG) withholding;
  • are reporting through Single Touch Payroll (STP);
  • are not an ineligible employer;
  • are claiming in respect of an eligible employee; and
  • have kept adequate records of the paid hours worked by the employee.

Newly established businesses and businesses with no employees at the reference date of 30 September 2020 can claim the JobMaker Hiring Credit where they meet the criteria.

The minimum baseline headcount for a newly established business is one, so employers who had no employees at 30 September 2020 or who were created after this reference date will not be eligible for the first employee hired but will be eligible for the second and subsequent eligible hires.

The following employers are not eligible for the JobMaker Hiring Credit:

  • Commonwealth, state and local government agencies, and entities wholly owned by these agencies.
  • Sovereign entities (foreign Governments, their agencies and wholly owned foreign resident subsidiaries). However, Australian resident entities owned by a sovereign entity that meet all other eligibility criteria are eligible.
  • Entities in liquidation or who have entered bankruptcy.
  • Employers who are claiming the JobKeeper Payment.
  • Employers subject to the major bank levy.

Employee Eligibility

To be an eligible employee, the employee must:

  • be aged either between 16 and 35 years old at the time their employment started;
  • have worked at least 20 paid hours per week on average for the full weeks they were employed over the reporting period;
  • commenced their employment between 7 October 2020 and 6 October 2021;
  • have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one month within the past three months before they were hired;
  • not be an ineligible employee
  • be in their first year of employment with this employer, reflecting that the hiring credit is only available for 12 months for each additional job; and
  • must be employed for the period that the employer is claiming for them.

Employees may be employed on a permanent, casual or fixed term basis.

The following are not eligible employees for the JobMaker Hiring Credit:

  • employees aged under 16 years or over 35 years at the time their employment started;
  • employees for whom the employer is also receiving a wage subsidy under another
  • Commonwealth program such as the Boosting Apprenticeship Commencements wage subsidy, Supporting Apprentices and Trainees subsidy and the Australian Apprentice Wage Subsidy Trial;
  • employees that another employer is claiming the JobMaker Hiring Credit in respect of; and
  • employees that worked on average less than 20 hours per week, for the full weeks they were employed during a reporting period will be ineligible for that period.

Claiming the Credit

  • Registrations will open for eligible employers through ATO online services from 7 December 2020. Employers do not need to be registered at the time that they hire an employee in order to be eligible. Registration can occur at any time before a claim is made.
  • The JobMaker Hiring Credit will be paid quarterly by the ATO in arrears. Employers can claim the first payment when claims open on 1 February 2021 (for new jobs created between 7 October 2020 and 6 January 2021).
  • The amount claimed for the reporting period will be calculated on the number of days worked in the reporting period. If an eligible employee leaves your business, and is replaced with another eligible employee, you will continue to be able to claim in respect of that position, up to a maximum of 12 months. Replacing an employee does not reset the maximum 12-month period.
  • Employers cannot access more than one Commonwealth wage subsidy program for the same employee. This includes the Department of Education, Skills and Employment’s wage subsidies, the Boosting Apprenticeships Commencements Wage Subsidy, the Supporting Apprentices and Trainees Wage Subsidy, and the Australian Apprentice Wage Subsidy Trial.

Integrity Measures

  • Employees will also need to satisfy a number of conditions to help ensure they are entering into a genuine employment relationship.
  • For example, ‘non-arm’s length’ employees will not be considered eligible employees. This includes family members of a family business, directors of a company and shareholders of a company.

Apprentice and Trainee Wage Subsidy

Business Eligibility
A business or Group Training Organisation may be eligible if:

  • it engages an Australian Apprentice between 5 October 2020 and 30 September 2021, and
  • that Australian Apprentice or trainee is undertaking a Certificate II or higher qualification and has a training contract that is formally approved by the state training authority.
  • Eligible employers and Group Training Organisations will receive a wage subsidy of up to 50 per cent of the Australian Apprentice’s gross wage paid for a maximum of $7,000 per quarter per eligible Australian Apprentice.
  • The subsidy is available for wages paid from 5 October 2020 to 30 September 2021.
  • The subsidy is available to employers of any size, industry or geographic location.
  • The subsidy is capped at 100,000 places.
  • The subsidy is not available for any apprentice receiving any other form of Australian Government wage subsidy e.g. Supporting Apprentices and Trainees or JobKeeper.
  • Payments will be made quarterly in arrears, with first claims for the subsidy available from 1 January 2021.
  • Final claims for payment must be lodged by 31 December 2021.
  • For further information contact an Australian Apprenticeship Support Network provider. https://www.australianapprenticeships.gov.au/search-aasn

Read more of our Federal Budget 2020-21 commentary here:

Personal Income Tax

Other Business Measures 

Business Tax Changes