JobKeeper rules and eligibility requirements

15 April 2020

Please contact a member of HWL Ebsworth’s National Taxation Group with any questions regarding your or your clients’ eligibility for the subsidy, or if you require assistance relating to the Government’s economic stimulus packages generally (for example, the Cash Boost).

Note: The rules and information about the subsidy are being regularly updated by the Government, the Treasury and the ATO. This publication is current as at 5:00PM on 14 April 2020 and may be subject to change. 

Eligible businesses

Broadly, a business may be entitled to the subsidy if it:

  • Carried on an “active business” on or before 1 March 2020. The business must have lodged its 2019 income tax return or a business activity statement which reported a taxable supply for GST purposes between 1 July 2018 and 31 December 2019 for quarterly lodgers or 1 July 2018 to 29 February 2020 for monthly lodgers;
  • Suffers a decline in its turnover by more than a certain amount compared to the same time last year;
  • Employs certain staff between 1 March 2020 and 27 September 2020; and
  • Advises the ATO that it wishes to participate in the JobKeeper package and the details of staff to whom the subsidy is being paid.

Please note that we address the main criteria for the subsidy in this Tax Insight. There are other administrative criteria which a business may also need to satisfy (for example, certain reporting requirements to employees). You are welcome to contact one of our National Tax Team to find out more.

Decline in turnover

A business’s turnover needs to fall or reasonably be projected to fall by more than the thresholds below for it to be eligible for the subsidy:

  • Businesses with a turnover of more than $1 billion: a fall of more than 50% compared to the same period last year; and
  • Businesses with a turnover of less than $1 billion: a fall of more than 30% compared to the same period last year.

The ATO also has broad discretionary powers to introduce new rules to enable other businesses who do not strictly satisfy the turnover tests to otherwise be eligible for the subsidy. The discretion may apply to circumstances where the ATO is satisfied that the comparison period was not appropriate or a business was not in operation for a full year (for example, because there was a large interim acquisition, the business was recently established, was scaling up, or its turnover was highly variable). We are awaiting such rules to be released by the ATO.

Once an employer satisfies the decline in turnover test for a specific period (i.e. monthly or quarterly depending on its GST turnover), it remains eligible to receive JobKeeper payments on an ongoing basis. The employer is not required to determine the decline in turnover for each month or quarter.


Broadly, a business is entitled to receive the subsidy for employees who satisfy all of the following criteria:

Eligibility requirementDetail
CategoryFull-time or part-time employee who was employed by the business as at 1 March 2020; or
Casual employee who was employed by the business on a continuous basis for more than 12 months before1 March 2020 (i.e. at least from 1 March 2019 to 1 March 2020).
Current statusA person must be employed by the business for the business to be eligible to receive the subsidy for that employee. This includes employees who have been stood-down or furloughed. The business is not eligible for the subsidy if an employee has been retrenched. It also includes business participants that are actively involved in the business but are not strictly employees e.g. sole traders, independent contractors (see below).
Age16 years or older at 1 March 2020.
Residency statusEither an Australian citizen or permanent visa holder as at 1 March 2020; or
Special Category (Subclass 444) Visa Holder at 1 March 2020.
DisqualificationAn employee is not an eligible employee if the employee is in receipt of:
The JobKeeper payment from another employer;
Parental leave pay during the same period;
Dad and partner pay during the same period; or
Worker’s compensation in relation to the individual’s total incapacity for work during the same period.

Business participants

Businesses can also receive the subsidy for its owners who are actively involved in the business, but are not strictly employees. In this regard:

  • A partnership can elect to receive the subsidy for one partner in the partnership;
  • A trust can elect to receive the subsidy for one beneficiary of the trust where the trust makes distributions to beneficiaries in lieu of salary and wages;
  • A company can elect to receive the subsidy for one director if the company pays director fees and not salary and wages. Alternatively, a company could elect one shareholder where the company pays dividends to shareholders in lieu of salary and wages; and
  • Sole-traders are also eligible for the subsidy. This includes independent contractors that have an active business (i.e. ABN registered on 12 March 2020, unless the Commissioner allows otherwise).

Amount of the subsidy

A business may receive $1,500.00 per fortnight for each eligible employee and for a maximum of one business participant. There is no cap on the total subsidy which a business may receive provided that it satisfies the eligibility requirements.

The amount that a business must pay to an employee is contained in the table below:

Ordinary salary per fortnight
(gross payment)
Payment by the business per fortnight
(gross payment)
More than $1,500.00Ordinary salary.

A business will use the subsidy to recoup some of their salary and wage expense paid to the employee. The employer must pay the employee at least $1,500 a fortnight to receive the JobKeeper payment. It does not matter whether the employee received more than $1,500 a fortnight previously.
Less than $1,500.00$1,500.00

Frequently asked questions

The frequently asked questions below rely on the resources published by the Government, the Treasury and the ATO to date, and are provided as a helpful guide only. Clients and their advisors should obtain specific tax advice if such circumstances arise as the JobKeeper rules are complex and continue to be regularly updated.

When will a business commence to receive the subsidy?

The first payments by the ATO to eligible businesses are expected to commence by around 14 May 2020. The subsidy is also generally payable monthly in arrears. Some businesses may experience short term cash flow issues and we suggest contacting your accountant or business advisor if such circumstances could arise.

Is a charity eligible for the subsidy?

Yes. Subject to certain eligibility rules, a charity (not including a school) may also be eligible for the subsidy if its turnover has fallen by more than 15% compared to the same time last year. Schools may also be eligible, but are required to satisfy ordinary rules.

The turnover for charities includes both income derived from the business carried out on by the charity, and gifts and donations received by the charities (both monetary and non-monetary value of the gifts and donations). For charities that have zero turnover, the Commissioner may exercise discretion to determine an alternative decline in turnover test.

Can a business ‘pick and choose’ which of its employees are allowed to participate in the JobKeeper package and be paid using the subsidy?

No. The package operates a ‘one in all in’ model. A business that wishes to take up the subsidy must do so for all eligible employees. The business cannot ‘pick and choose’.

Is my business eligible for the subsidy if its turnover fluctuates above and below the relevant threshold between 30 March 2020 and 27 September 2020?

Yes. Businesses only need to satisfy the “decline in turnover test” once between 30 March 2020 and 27 September 2020. For example, a business whose turnover partially or fully recovers by 27 September 2020 may still be eligible for the wage subsidy.

I run a company with three divisions. The turnovers of two divisions have declined by more than the threshold, but the third division remains highly profitable. Overall, the company’s turnover has not declined by more than the required threshold. Is the company eligible for the subsidy?

No. Currently, the turnover test is applied to the company as a whole. However, such circumstances could be covered by the ATO’s discretion in the future.

Must a person be employed for the entire period 30 March 2020 to 27 September 2020 to be an eligible employee?

No. The subsidy is based on fortnightly payments. Provided that other requirements are satisfied, a person does not need to be employed for the entire period. For example, the ABC Trust may employ a person for 1 day per fortnight and be eligible for the subsidy for that fortnight.

Two companies carry out the operations of an integrated business via a tax consolidated group. Do the companies need to aggregate their turnovers for the purposes of determining whether they satisfy the decline in turnover test?

The companies need to aggregate their turnovers for the purpose of determining whether their turnover is more or less than $1bn (and therefore, which decline in turnover percentage applies). However, the Treasury Fact Sheet states that if a business is part of a consolidated group for income tax purposes, with a turnover of more than $1 billion, the 50 per cent or more turnover test will apply to each business in that consolidated group. If the consolidated group has turnover of less than $1 billion, the 30 per cent or more turnover test is applied to each business in that consolidated group. That is, individual businesses within a consolidated group may be eligible for the JobKeeper payment while other businesses in the group may not be eligible.

Does a business need to pay the superannuation guarantee on the subsidy when it is on-paid to employees?

No. A business can choose to pay the superannuation guarantee to employees’ superannuation funds, however, it will not have an individual superannuation guarantee shortfall if it does not do so. Other superannuation obligations for employers remain the same.

As CFO of ABC Co, I retrenched 50 full time staff on 15 March 2020. They were all with the business continuously for over 5 years. If I rehire them, is ABC Co eligible for the subsidy?

Yes. Provided that the business and the re-hired employees meet all of the other eligibility criteria, then the business should receive the subsidy.

Is a business eligible for the subsidy if its employees are deployed overseas? 

Yes. Businesses are eligible for the subsidy even if employees are deployed overseas on duty provided that the employees are Australian residents under tax or social security laws.

HWL Ebsworth lawyers’ National Tax Group have experienced tax professionals who can assist you in managing interactions the ATO. In particular, in respect of the Government’s economic responses to COVID-19.

Please contact us to discuss any aspect of the above.

This article was written by Shaun Cartoon, Partner, Ari Schachna, Partner, Vincent Licciardi, Special Counsel and Amy Liu, Associate.

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