JobMaker Hiring Credit

The JobMaker Hiring Credit will help to accelerate growth in the employment of young people during the COVID-19 recovery. This will improve their economic, health and social outcomes and reduce the scarring from long term unemployment.

The JobMaker Hiring Credit will give businesses incentives to take on additional young job seekers. This will help young people access job opportunities as the economy recovers. The new credit will be available to employers for each new job they create over the next 12 months for which they hire an eligible young person, aged 16 to 35 years old.

It is expected that around 450,000 positions for young Australians will be supported through the JobMaker Hiring Credit at a cost of $4 billion from 2020-21 to 2022-23.

Key facts

• From 7 October 2020, eligible employers will be able to claim $200 a week for each additional eligible employee they hire aged 16 to 29 years old; and $100 a week for each additional eligible employee aged 30 to 35 years old.
• New jobs created until 6 October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created.
• To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring.
• The JobMaker Hiring Credit will be claimed quarterly in arrears by the employer from the Australian Taxation Office (ATO) from 1 February 2021. Employers will need to report quarterly that they meet the eligibility criteria.
• The JobMaker Hiring Credit is designed to support new employment. Employers do not need to satisfy a fall in turnover test.

Employer 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;
• be registered for Pay As You Go (PAYG) withholding;
• are reporting through Single Touch Payroll (STP);
• meet the additionality criteria;
• are claiming in respect of an eligible employee; and
• have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of.

Employee eligibility

To be an eligible employee, the employee must:

• be aged either:
  • 16 to 29 years old, to attract the payment of $200 per week; or
  • 30 to 35 years old to attract the payment of $100 per week 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;
• 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.

For further details on the JobMaker Hiring Credit, please see the Fact Sheet here

Our team at Gerard Wilkes & Associates are here to help. If you have any questions regarding this article, or would like to discuss your taxation matters further, please contact us at https://www.wilkes.com.au/contact-us/ or call our office 07 5532 1733.

This information was sourced from: https://budget.gov.au/2020-21/content/factsheets/download/jobmaker_hiring_credit_factsheet.pdf