INTRODUCTION

Welcome to our JobMaker series. In this video series that we will teach you, what is the jobmaker hiring credit and how do you apply for it? And we will walk through an example from start to finish on how to apply for the credit from the tax office. In a nutshell so the JobMaker hiring credit is basically a government incentive to encourage businesses to hire a new additional employees between the age of 16 and 35 inclusive.

As an employer, you will get $200 a week for new employees aged between 16 and 29. Inclusive. Which gives you a maximum of $10,400 and you'll get $100 a week for new employees aged between 30 and 35 inclusive. Which adds up to a maximum of $5,200. So if you are 30 and above, It looks like your market value has just dropped by 5,000 bucks.

Because if I was the employer and I had to choose between two candidates, say one was 29 and the other was 30. And you were both exactly the same. Well guess who I would be picking. But of course the intent is that you're in your thirties now. And, and, you know, you've got so much more experience than someone who's younger.

And some of you might be wondering, is this actually legal? Like isn't this age discrimination? Well, James O'Halloran from the Australian tax office. Economic stimulus division says no, it's not age discrimination. And if you want to hear him talk a bit more on the background of job maker. Feel free to tune into the tax Institute's tax vibe podcast with Robyn Jacobson, episode number four. Anyway, I digress. So say you're hiring a new employee tomorrow and you want to know if you can get the job maker credit, where do you start?

1:55 - TIMELINE OF JOBMAKER

So the first thing you need to do is understand the timeline of job maker, because it is all about timing and you really need to understand this so that you don't miss any deadlines. Unlike job keeper, where the ATO has discretions to let go and be a bit lenient. It doesn't sound like this leniency is available under job maker. So keep that in mind.

So anyway, you can claim job maker over two years, starting October, 2020 to October 2022. And each claim is for three months. Or quarters in arrears. But these quarters are fixed in terms of the dates, which have been set out by treasury, which are known as job makeup periods. So over two years, there are eight job maker periods, as you can see in this timeline.

And you pretty much have to lodge your claim within around three months after the end of each JobMaker a period. Every time I draw this timeline, I think why couldn't they have made it 1st of October instead of 7th of October, it just does my head in.

Anyway, we've broken it down into six steps on how to claim the JobMaker a credit.

3:04 ARE YOU AN ELIGIBLE EMPLOYER?

The first step is to work out whether you are eligible as an employer. And very broadly you're eligible, if you're carrying on a business in Australia, you've had no late returns in the past two years. And you've had a head count increase as well as a payroll increase. So if say you hired three new employees, but one of your existing employees quit. You would only have had a head count increase of two. And so you should only be entitled to JobMaker for two employees rather than three, because one of those new employees was just basically replacing an existing employee that left. And then the payroll increased criteria basically makes sure that you're helping to, you know, grow the economy. And you're not just increasing head count for the sake of it.

You also cannot claim JobKeeper at the same time. And finally you have not been disqualified for doing something dodgy, you know, just to take advantage of the JobMaker scheme, like trying to reduce employee hours, for instance.

4:07 - IS YOUR NEW EMPLOYEE ELIGIBLE?

And then the second step is to work out if your new employee is eligible. And of course they have to meet the age criteria. Then they have to have commenced employment between 7th of October, 2020 to 6th of October at 2021 inclusive. They have worked an average of 20 hours per week. And they were previously effectively unemployed, which means that they were previously on youth allowance, parental payment, or JobSeeker payments.

Also, you can only get JobMaker for employees that are new. And so if they've been working with you for more than 12 months, they will stop being eligible employees. Also, they can only be eligible employees in respect of one employer. And the way this works is that employees are supposed to give you a declaration. As the employer, they have to say to you they're all of a certain age and they were previously on certain welfare payments and they have to confirm to you that they have not provided this declaration to another employer.

There are also all sorts of integrity measures within job maker to make sure that, you know, you don't go out and hire all your mates, basically. So depending on your structure, there are restrictions on who those employees can actually be. For example, if you're a sole trader, the employees cannot be a relative.

And there are also rules to prevent you from effectively, employing your subcontractors who were doing substantially the same role, six months before JobMaker came in.

5:42 - CLAIMING THE CREDIT

So basically to claim the JobMaker credit, you have to register with the Tax Office and then you got to report your employees via Single Touch Payroll, and then lodge your claim with the Tax Office. The last step is basically get paid, but ensure that you declare it in your income tax return. But it is not subject to GST, so you don't have to worry about it for your BAS.

In terms of actually claiming the JobMaker credit, it sounds pretty straightforward and it's all done online. The trickiest bit is probably working out whether you've had a head count increase, and a payroll increase, which is relatively straightforward once you get your head around it for the first time.

And we cover this off in the number crunching example video. The calculations to work out how much you're actually going to be entitled to, is bloody complicated, which is why the ATO (Australian Tax Office) has published an Excel calculator, which I recommend you use. Instead of trying to work it out yourself, but we do go through is as well in the number crunching video.

So that's it. JobMaker in a nutshell. In the next videos in this series, I'll break down each step in detail, starting with step one, which is working out whether you are eligible as the employer.

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