Question

PART A: Written letter of advice.

Due to COVID-19, Madison was informed by her two current employers that she would be nominated as an eligible recipient for JobKeeper payments from the government. Madison is confused about the tax ramifications of receiving JobKeeper payments and she is seeking your advice.

In your own words, explain the tax treatment of JobKeeper payments to Madison and the potential impact of having two employers nominating her. She also has some sole trader income on the side and is wondering whether this will impact her nomination. 500words

Answer 1

Madison Effect on the JobKeeper payments from the government

What is the jobkeeper payment bussiness eligibility:

1

The JobKeeper Payment is a payment made to eligible businesses and not-for-profits affected by the Coronavirus to support them in retaining employees.

2

Eligible businesses that elect to participate will receive a payment of $1,500 per fortnight per eligible employee to support the people they employed as at 1 March 2020 who are retained in employment.

3

Businesses must have paid their employees before they are entitled to receive the JobKeeper payment.

4

Where an employee’s total remuneration is less than $1,500 per fortnight (before tax), or has been stood down, the employer must provide the employee at least $1,500 per fortnight (before tax). Where an employee earns more than $1,500 per fortnight, employers can use the payment to subsidise the employee’s wages.

5

Self-employed individuals will also be eligible to receive the JobKeeper payment.

6

It started from 30/03/2020

The amount received by eligible employee:

Eligible employees will receive, at a minimum, $1,500 per fortnight before tax. You will receive a payment from the employer.

Multiple Employer:

Every employee is only able to receive one payment from one employer, their primary employer. Your employers who have elected to participate in the JobKeeper Payment scheme may ask you to indicate whether they are your primary employer. If you are employed by more than one employer, you should contact your employers and indicate to them which is your primary employer.

Tax treatment of JobKeeper payments to Madison

The amounts paid by the employer are treated as assessable salary and wages in the hands of the employee

Conclusions:

Though she has some income from sole proprietor will not effect her Eligibility

She need to select one employer as she has multiple employees & indicate them as primary employer

The income received will be taxed as salary component.