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How to benefit from JobMaker as a small business

The COVID-19 crisis has been tough on many businesses, particularly those in the hospitality, retail, and leisure sectors which tend to employ young people. To help provide some relief, government incentives for small business include the JobMaker scheme. Here’s how it works. 

What is the JobMaker hiring credit scheme?

Developed by the Australian government and administered by the ATO, JobMaker was started in late 2020 to encourage businesses to hire younger, less experienced workers. The JobMaker hiring credit is a wage subsidy offered to businesses hiring workers under the age of 35. It’s designed both to boost employment levels as well as provide incentive for businesses to provide valuable experience and skills to this workforce demographic.

How does the JobMaker scheme work?

The scheme was launched on 7 October 2020 and runs up until 6 October 2021, applying to any new eligible employee positions created during this time. A hiring credit is paid for up to 12 months from the employee’s starting date. It’s important to note that this only applies if your business is creating a new opening, rather than simply filling an existing opening with a new employee.

So, how much money can you receive as an employer?

  • $200 per week for eligible workers aged 16-29

  • $100 per week for eligible workers aged 30-35

  • $10,400 total credit cap

Although it applies to new hires from October 2020, the credit can be claimed quarterly from the ATO in arrears starting from 1 February 2021.

Not all employees will be eligible for the JobMaker hiring credit scheme. Here are the qualifying criteria to be aware of before you create a new position:

  • New hires must have received income support for a minimum of one month in the past three-month period. Examples include JobSeeker payments, Youth Allowance, or Parenting Payments.

  • New hires should be aged between 16 and 35 years.

  • New hires must work at least 20 hours per week on average for a minimum of three months before the credit payments apply.

  • Employers need to have verification of age and income support for the application.

To get started with registering for the JobMaker scheme as a small business, you can either sign up using the ATO online services portal or ask your registered tax agent for assistance. From there, the next step is to nominate the eligible employees and file your claim.

Tips for meeting JobMaker hiring credit criteria

Before you spend time preparing an application, here are a few tips to make sure that your business is successful.

1. Compare wage subsidies before applying.

There are additional government incentives for small business, many of which come in the form of wage subsidies. Recent examples include JobKeeper and Boosting Apprenticeship Commencements wage subsidies. You can’t stack them together – you can only claim one at a time. Before you choose to claim the JobMaker hiring credit, look into whether or not another subsidy might be more beneficial for your business. These are separate to grants.

2. Make sure your business is eligible.

There are strict eligibility requirements for JobMaker. You can’t claim the hiring credit unless your permanent workforce size has increased within the qualifying time frame. In addition, your business must have a valid ABN. You should be sure that your PAYG withholding, STP reporting, and tax returns are all current.

3. Don’t claim any relatives.

The JobMaker scheme isn’t designed for a business owner’s relatives or ‘close associates’ including spouses. Relatives are defined as parents, grandparents, brothers, sisters, uncles, aunts, nephews, nieces, and adopted children, as well as their spouses.

4. Don’t claim the credit for your first hire.

If you’ve just recently registered your company, you’re probably looking for all the government incentives for small business that could be helpful. Unfortunately, you can’t claim this hiring credit for your first hire. Any employees hired after the first might be eligible, up until 6 October 2021.

For greater clarity, it’s always a good idea to look at the ATO’s website. You’ll find all the eligibility requirements, timelines, and application forms to get started.

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