Show download pdf controls
  • Alternative test

    If there were events or circumstances outside the usual business setting that resulted in your relevant comparison period in 2019 (September or December 2019 quarter) not being appropriate, then an alternative test may apply.

    However, if an entity satisfies the basic test, it does not need to satisfy an alternative test. Also, you only need to satisfy one of the alternative tests listed below even if more than one could apply.

    The alternative turnover tests can be used to determine whether an entity has satisfied the actual decline in turnover test for the September 2020 quarter or the December 2020 quarter.

    Test for a:

    You can get more information on these alternative tests in the Legislative Instrument and Explanatory Statement which apply from 28 September 2020:

    Tip: The legislative instrument provides for tests using quarters or months. The actual decline in turnover test only uses quarters. The original decline in turnover test uses quarters or months (except for certain universities).

    Test for a business that started after the comparison period started but before 1 March 2020

    Use this test if your entity started business after the first day of the relevant comparison period but not on or after 1 March 2020.

    An example is if your entity started business in October 2019 and therefore you cannot compare your current GST turnover in the September quarter 2020 with your current GST turnover in the September quarter 2019.

    You can apply the first alternative test in this category if your entity started business before 1 March 2020 but after the first day of the relevant comparison period.

    You can use either of these alternative tests if both are applicable to you.

    Alternative test 1

    If your entity started business before 1 February 2020:

    • to determine if your GST turnover has fallen by at least 15%, 30% or 50%, take your average monthly current GST turnover since your entity started business (before 1 March 2020) and multiply by 3. Then, compare this figure with your applicable current GST turnover for the September or December 2020 quarters.
    • your average monthly GST turnover will be the total of the current GST turnovers for each whole month since your entity started business and before 1 March 2020 divided by the number of those whole months.

    Example 1 – Business started after the comparison period

    Barbara started business on 15 October 2019. She adds her current GST turnover from November, December, January, and February together. She does not include October as she was not in business for the whole month of October.

    She divides the total current GST turnover by four to give her the entity’s average GST turnover for four months of operation.

    This figure is her average monthly GST turnover.

    In calculating the actual decline in turnover for the September 2020 quarter turnover test period, she multiplies her average monthly GST turnover figure by three. She then compares that figure against her current GST turnover for the September 2020 quarter to determine if her GST turnover has fallen by 30% or more (if her turnover is $1 billion or less).

    End of example

    If your business started in February 2020:

    • to determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare your average monthly current GST turnover for February 2020 with your applicable current GST turnover for the September or December 2020 quarter
    • your average monthly GST turnover for February 2020 is your total current GST turnover for the days your business was in operation in February 2020 divided by the number of days you were in business in February 2020 and then multiplied by 29 (the number of days in February 2020).

    Example 2 – Business started in February 2020

    Douglas started business on 15 February 2020. He divides his current GST turnover for the month of February by 15, the number of days between and including 15 February and 29 February. He then multiplies that by 29 (the number of days in February 2020).

    This figure is his average monthly GST turnover for February.

    In calculating the actual decline in turnover for the September 2020 quarter turnover test period, he multiplies the figure this is his average monthly GST turnover for February by three. He then compares that figure with his current GST turnover for the September 2020 quarter to determine if his turnover has fallen by 30% or more (if his turnover is $1 billion or less).

    Note: This example only demonstrates how a business that started on or after 1 February 2020, but before 1 March 2020 can satisfy the actual decline in turnover test. To claim the JobKeeper Payment, the other eligibility requirements must also be met.

    End of example

    Alternative test 2

    You can only use this test if your business started after the first day of the relevant comparison period but before 1 December 2019.

    To determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare your applicable current GST turnover for the September or December 2020 quarter with your current GST turnovers for the months of December 2019, January 2020 and February 2020.

    Drought or bushfire

    If you experienced drought or bushfire after your business started you may be able to use different months, unless those are the only months since you started business. You may exclude months in calculating your average monthly GST figure or your three months’ current GST turnover figure if your entity qualified for or received any of the following:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    The exclusion of these months from the calculation is optional unless there are no appropriate months.

    Example 3 – Bushfire lodgment deferral

    Li is calculating her average monthly GST turnover from 1 November 2019 to 29 February 2020. During that time, she qualified for the ATO’s Bushfire 2019–20 lodgment and payment deferrals in the months of December 2019 and January 2020. In calculating her average monthly GST turnover, Li may exclude the months of December and January from that calculation and only use the months of November and February.

    End of example

    Test for a business acquisition or disposal that changed the entity’s turnover

    Use this test if:

    • your entity acquired or disposed of part of its business from the start of the relevant comparison period (including multiple acquisitions or disposals) but before the applicable turnover test period, and
    • the acquisition or disposal changed your entity’s current GST turnover.

    For example, for the September 2020 quarter turnover test period, you can use this test if you acquired or disposed of part of your business from, 1 July 2019 but before 1 July 2020. The acquisition or disposal must also have changed your entity’s current GST turnover during that time.

    If the acquisition or disposal made by your entity did not impact the business in a way that changed its current GST turnover, then you cannot use this test.

    Alternative test

    Use your current GST turnover from the month immediately after the month the acquisition or disposal occurred multiplied by three.

    To determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare that figure with your applicable current GST turnover for the September or December 2020 quarter.

    Example 4 – Compare turnover for month after acquisition or disposal

    Dominic and Terry’s entity acquired part of their business on 20 November 2019 and that changed their current GST turnover. The September 2020 quarter is the turnover test period. They should take their current GST turnover from December 2019 and multiply it by three. They compare that figure with their current GST turnover for the September 2020 quarter.

    End of example

    Multiple acquisitions or disposals alternative test

    If your entity made multiple acquisitions or disposals after the relevant comparison period, you can use the whole month immediately after any of the acquisitions or disposals, multiplied by three, for the alternative test.

    Example 5 – Multiple acquisitions or disposals

    If Dominic and Terry from the example above had made multiple acquisitions or disposals before November 2019, then they may use the whole month after any of those acquisitions or disposals. They may still compare the current GST turnover for December 2019 multiplied by three with their current GST turnover for the September 2020 quarter.

    If they made another acquisition or disposal in January 2020, they may compare the current GST turnover for February 2020 multiplied by three with their current GST turnover for the September 2020 quarter.

    End of example

    No whole month after acquisition or disposal alternative test

    If there is no whole month between the acquisition or disposal your entity made and the turnover test period, then your entity uses the month immediately before the applicable turnover test period.

    Example 6 – No whole month after acquisition or disposal

    If Dominic and Terry from the example above are considering their September 2020 quarter turnover test period and their entity acquired or disposed of part of its business in June 2020, they should compare their current GST turnover for June 2020 multiplied by three with their current GST turnover for the September 2020 quarter.

    End of example

    Drought or bushfire

    If you experienced drought or bushfire in the month you were going to use under this test, you may exclude that month or months and instead use the nearest month before or after the acquisition or disposal if your entity qualified or received any of the following:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    The exclusion of these months from the calculation is optional unless there are no appropriate months.

    Example 7 – Drought concessions

    For example, in Dominic and Terry’s example above, the entity’s last acquisition or disposal occurred in November 2019. As their entity was given drought concessions by the ATO in December 2019, they may compare the current GST turnover for January 2020 multiplied by three with their current GST turnover for the September 2020 quarter.

    The exclusion of months in all the alternative tests as shown above does not apply where the months affected are the only months available.

    End of example

    Test for a business restructure that changed the entity’s turnover

    Use this test if:

    • you restructured the whole or part of the entity’s business from the start of the relevant comparison period but before the applicable turnover test period (including multiple restructures), and
    • the restructure changed your entity’s current GST turnover.

    For example, in calculating the actual decline in turnover for the September 2020 quarter turnover test period, you use this test if you restructured your business, or part of it, from 1 July 2019 and before 1 July 2020.

    The restructure must also have changed your entity’s current GST turnover. If the restructure did not impact the business in a way that changed its current GST turnover, then you cannot use this test.

    Alternative test

    Use your current GST turnover from the month immediately after the month the restructure undertaken was completed and multiply that current GST turnover from that month by three.

    To determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare that figure with your applicable current GST turnover for the September or December 2020 quarter.

    Example 8 – Restructure effected turnover

    Arjun’s entity restructured part of its business on 20 November 2019 which changed his entity’s turnover. For the September 2020 quarter turnover test period, he should take his current GST turnover for December 2019 and multiply it by three. He compares that figure with his current GST turnover for the September 2020 quarter.

    End of example

    Multiple restructures alternative test

    If your entity undertook multiple restructures after the relevant comparison period, you can use the whole month immediately after any restructure undertaken was completed for the alternative test.

    Example 9 – Multiple restructures

    If Arjun from the example above had undertaken multiple restructures before November 2019 then he may use the whole month after any of those restructures. He still compares the current GST turnover for December 2019 multiplied by three with the current GST turnover for the September 2020 quarter.

    If he undertook another restructure in January 2020, he may compare his current GST turnover for February 2020 multiplied by three with his current GST turnover for the September 2020 quarter.

    End of example

    No whole month after restructure alternative test

    If there is no whole month between the restructure your entity undertook and the turnover test period, then your entity uses the month immediately before the applicable turnover test period.

    Example 10 – No whole months after restructure

    If Arjun from the example above is considering the September 2020 quarter turnover test period and he undertook a restructure in June 2020, he should compare his current GST turnover for June 2020 multiplied by three with his current GST turnover for the September 2020 quarter.

    End of example

    Drought or bushfire

    If you experienced drought or bushfire in the month you were going to use for your entity’s current GST turnover in the alternative test, you can use the nearest month before or after the restructure undertaken was completed by your entity.

    You can only do this if your entity qualified for or received any of the following:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    The exclusion of these months from the calculation is optional unless there are no appropriate months.

    Example 11 – Drought concessions

    For example, in Arjun’s example above, Arjun’s entity’s last restructure was undertaken in November 2019. As Arjun was given drought concessions by the ATO in December 2019, he may compare his current GST turnover for January 2020 multiplied by three with his current GST turnover for the September 2020 quarter.

    The exclusion of months in the alternative test as shown above does not apply where the months affected are the only months available.

    End of example

    Test for a business that has had a substantial increase in turnover

    Use this test if your entity had a substantial increase in its current GST turnover of:

    • 50% or more in the 12 months immediately before the applicable turnover test period or before 1 March 2020, or
    • 25% or more in the 6 months immediately before the applicable turnover test period or before 1 March 2020, or
    • 12.5% or more in the 3 months immediately before the applicable turnover test period or before 1 March 2020.

    To test if your entity’s current GST turnover increased, by at least the applicable percentage (50%, 25% or 12.5%), in the 12 (or 6 or 3) months immediately before the applicable turnover test period or before 1 March 2020, compare:

    • your current GST turnover for the month immediately before the applicable turnover test period or 1 March 2020, with
    • your current GST turnover for the month immediately before the start of the 12 (or 6 or 3) months.
    Table 1: Months you need to compare to test percent increase in current GST turnover

    To test percent increase in turnover immediately before

    For the 50 percent increase in turnover test

    (12 months)

    For the 25 percent increase in turnover test

    (6 months)

    For the 12.5 percent increase in turnover test

    (3 months)

    September 2020 quarter (July to September 2020)

    Test June 2019 turnover with June 2020 turnover

    Test December 2019 turnover with June 2020 turnover

    Test March 2020 turnover with June 2020 turnover

    December 2020 quarter (October – December 2020)

    Test September 2019 turnover with September 2020 turnover

    Test March 2020 turnover with September 2020 turnover

    Test June 2020 turnover with September 2020 turnover

    1 March 2020

    Test February 2019 turnover with February 2020 turnover

    Test August 2019 turnover with February 2020 turnover

    Test November 2019 turnover with February 2020 turnover

    Alternative test

    The comparison period you use in applying this alternative test depends on which time you used to test your substantial increase in turnover.

    • If you used the period immediately before the applicable turnover test period then to determine if your turnover has declined by at least 15%, 30% or 50%:  
      • for the September quarter actual decline in turnover test - compare your current GST turnover for April to June 2020 with the current GST turnover for September 2020 quarter
      • for the December quarter actual decline in turnover test - compare your current GST turnover for July to September 2020 with the current GST turnover for December 2020 quarter.
       
    • If you used the period immediately before 1 March 2020, then to determine if your turnover has declined by at least 15%, 30% or 50%, compare:  
      • your entity’s current GST turnover for December 2019 to February 2020, with
      • the applicable current GST turnover in the turnover test period (the September or December 2020 quarter).
       

    Drought or bushfire

    If your entity qualified for or received any of the following you may use the three month period before the deferrals, concessions or assistance measures commenced:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    Example 12 – Bushfire deferral

    Donna calculates her three months’ GST turnover from 1 December 2019 to 29 February 2020. However, as she qualified for the ATO’s Bushfire 2019–20 lodgment and payment deferrals in January 2020, she may instead use the months of October, November and December 2019 in her calculation of the current GST turnover for the three months.

    End of example

    Test for a business affected by drought or natural disaster

    Use this test if:

    • your entity conducted business or some of your business in a declared drought or natural disaster zone during the relevant comparison period in 2019, and
    • the drought or natural disaster changed your entity’s turnover.

    For the purposes of this test, a declared drought zone includes an area subject to a formal declaration of drought by a commonwealth, state, territory or local government agency. It also includes an area for which there has been a public identification or acknowledgment that the area is drought affected by such an agency.

    For example, the following public information sources provide declarations, acknowledgments, statistics, maps and other guidance as to what are declared drought zones and drought affected areas for the purposes of this test:

    • the National Drought Map
    • Australian Government Bureau of Meteorology Monthly Drought Statements, maps, rainfall and rainfall deficiency statistics
    • in Queensland – the drought situation map
    • in NSW – the Combined Drought Indicator map
    • in South Australia – the Drought Affected Areas map.

    Alternative test

    Calculate your entity’s current GST turnover for the September or December quarter in the year immediately before the year when the drought or natural disaster was declared, instead of those quarters in 2019. To determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare that figure against your current GST turnover for the September or December 2020 quarter.

    Example 13 – Declared flood zone

    Manu conducted his business in 2019 in a declared flood zone. For the September 2020 quarter turnover test period, under the basic test, he needs to use the September 2019 quarter to work out to see if he has the required decline in turnover. However, because he was in a declared flood zone in September 2019, he uses his entity’s current GST turnover for the September 2018 quarter instead to compare with the current GST turnover for the September 2020 quarter.

    In addition, if in September 2018, Manu’s entity was also in a declared drought or natural disaster zone, he uses his entity’s current GST turnover for the September 2017 quarter (the comparison period in the closest year in which he wasn’t in a declared drought or natural disaster zone) instead to compare with the current GST turnover for the September 2020 quarter.

    End of example

    Test for a business that has an irregular turnover

    Use this test if:

    • for the consecutive three month periods ending in the 12 months immediately before the applicable turnover test period or 1 March 2020, the lowest of your entity's current turnover for any of those three month periods is no more than 50% of the highest of the entity's current GST turnover for any of those three month periods, and
    • the entity’s current GST turnover is not cyclical.

    Your entity cannot use this alternative test if your entity’s turnover is cyclical. For example, a fruit growing business that is seasonal and usually has less turnover during certain months of the year cannot use this test. Or, for example, a business that usually has increased turnover in December from Christmas trade cannot use this test.

    Alternative test

    In applying this alternative test, you must use your entity’s average monthly current GST turnover. To work out your entity’s average monthly current GST turnover, add the total of your current GST turnovers for each whole month in the 12 months immediately before the applicable turnover test period or 1 March 2020, and divide the total by 12.Then multiply your entity’s average monthly current GST turnover by three and compare that to the current GST turnover for the applicable turnover test period.

    Example 14 – Irregular turnover

    Zendaya’s entity had an irregular turnover in 2019. For the September 2020 quarter turnover test period she compares her current GST turnover for the September 2020 quarter against her average monthly current GST turnover.

    Zendaya adds up her entity’s turnover for each month of July 2019 to June 2020 inclusive and divides the result by 12. This gives her the average monthly current GST turnover for the previous 12 months, which she then multiplies by three, and then compares with the current GST turnover for the September 2020 quarter.

    End of example

    Drought or bushfire

    If you experienced drought or bushfire in some of the months you were going to use as your current GST entity’s turnover for the test, you may exclude those months from your calculations.

    You can only do this if your entity qualified for or received any of the following:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    The exclusion of these months from the calculation is optional unless there are no appropriate months.

    Example 15 – Bushfire deferral

    In example 14 above, Zendaya calculated her entity’s average monthly current GST turnover from 1 July 2019 to 30 June 2020. She qualified for the ATO’s Bushfire 2019–20 lodgment and payment deferrals in December 2019 and January 2020, so she may exclude those months from the calculation of her entity’s average monthly current GST turnover. Instead, she totals her current GST turnover from every other month and divides that number by 10. She then multiplies that number by three to compare with her current GST turnover for the September 2020 quarter.

    End of example

    Test for a sole trader or small partnership with sickness, injury or leave

    Use this test if:

    • you are a sole trader or a partnership with four or fewer partners, and your entity has no employees
    • the sole trader or one of the partners has not worked for all or part of the relevant comparison period due to sickness, injury or leave, and
    • your turnover was affected as a result of the sole trader or partner not working for all or part of the period.

    Alternative test

    Use your current GST turnover from the month immediately before the month in which the sole trader or partner did not work due to sickness, injury or leave and multiply that by three and then compare that with your current GST turnover for the applicable turnover test period.

    Example 16 – Unable to work

    Jonathan is a sole trader who was sick from 15 August 2019 until 7 September 2019 and did not work at all during that period. Jonathan is considering the September 2020 quarter turnover test period. Jonathan multiples the current GST turnover from July 2019 by three and compares that with current GST turnover for the September 2020 quarter.

    End of example

    Drought or bushfire

    If you experienced drought or bushfire in the month immediately before the month in which the sickness, injury or leave occurred, you may use the nearest month before the months covered by the deferrals or concessions below to compare your decline in turnover.

    You can only do this if your entity qualified for or received any of the following:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    The exclusion of these months from the calculation is optional unless there are no appropriate months.

    Example 17 – Drought concessions

    A partner in a partnership of three partners was sick in the month of November 2019, but the entity was given drought concessions by the ATO in December 2019. The entity should use the current GST turnover from the month of January 2020 multiplied by three for the alternative test for the December 2020 quarter turnover test period.

    End of example

    Test for a business that temporarily ceased trading during the relevant comparison period

    Use this test if:

    • your entity's business had temporarily ceased trading due to an event or circumstance outside the ordinary course of the entity's business
    • your entity's business had temporarily ceased trading for a week or more
    • some or all of the relevant comparison period occurred during the time in which your entity's business had temporarily ceased trading, and
    • your entity’s business resumed trading before 28 September 2020.

    Temporarily ceasing to trade includes a business ceasing to make supplies or where it cannot otherwise offer its goods and services to customers. It does not require that the entity stopped carrying on business but requires a suspension of the ordinary activities of the business due to some event or circumstance outside the ordinary course of business. Temporarily ceasing to trade also has to be for a week or more. For example, where a business that is run from purpose-built premises ceased trading for a week or more to move into new premises.

    Ceasing trade at the end of a business day, on weekends and public holidays or ceasing trade during the off-season of a seasonal business would not satisfy this requirement. These all form part of the ordinary course of the entity’s business.

    This alternative test will not generally apply where a business ceases trade because its sole trader or partner (in a small partnership) goes on planned leave.

    Alternative test 1

    Use your current GST turnover for the same period as your turnover test period in the year immediately before your business ceased trading.

    To determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare that figure with your applicable current GST turnover for the September or December 2020 quarter.

    Example 18 – using 2018 corresponding quarter

    AUS Co temporarily ceased trading during the months of July and August 2019 due to moving business premises.

    AUS Co assesses its eligibility for JobKeeper payments based on a current GST turnover for the quarter ending 30 September 2020 of $3 million.

    As it had temporarily ceased trading during part of the relevant comparison period in 2019 that was for a week or more, it can use this test.

    AUS Co's current GST turnover for the quarter ending 30 September 2018 is $8 million and AUS Co compares that figure with the current GST turnover for the September 2020 quarter. As there is a decline in turnover of over 30%, this alternative decline in turnover test is satisfied.

    End of example

    Alternative test 2

    Use your current GST turnover from the three months immediately before the month the business temporarily ceased trading.

    To determine if your GST turnover has fallen by at least 15%, 30% or 50%, compare that figure with your applicable current GST turnover for the September or December 2020 quarter.

    Example 19 – Using the three months immediately before

    AUS Co from the example above could instead use the three months immediately before the month it temporarily ceased trading. Because it temporarily ceased trading in July 2019, it would then use its current GST turnover for the months of April, May and June 2019 and compare that figure with the current GST turnover for the September 2020 quarter.

    End of example

    Drought or bushfire

    If you experienced drought or bushfire in a month you were going to use for your entity’s current GST turnover in this alternative test, you can exclude that month and use the nearest month before or after the period you experienced drought or bushfire.

    You can only do this your entity qualified for or received any of the following:

    • You qualified for the ATO’s Bushfires 2019–20 lodgment and payment deferrals.
    • You received any concessions given by us where drought has caused financial difficulty.
    • You qualified for any Disaster Recovery Funding Arrangements 2018 assistance measures.

    The exclusion of these months from the calculation is optional unless there are no appropriate months.

    Find out about:

      Last modified: 11 Nov 2020QC 63698