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  • The JobKeeper Payment scheme finished on 28 March 2021. The JobKeeper Payment scheme has been amended so we can make a JobKeeper Payment to some entities in limited circumstances after 31 March 2022.

    Basic test

    This test is satisfied when your projected GST turnover for the turnover test period falls short of your current GST turnover for the relevant comparison period, by the specified percentage (generally 30%).

    To apply the basic test, you need to:

    The turnover calculation is based on GST turnover, but there are some modifications to the definitions of current and projected GST turnover, including disregarding GST grouping.

    Law Companion Ruling LCR 2020/1 JobKeeper payment – decline in turnover test provides more detail about the turnover test, including:

    • what supplies are relevant when calculating projected and current GST turnover
    • how you allocate supplies to relevant periods
    • how you determine the value of each supply that has been allocated to a relevant period
    • the ATO compliance approach.

    Step 1: identify the turnover test period

    Unless you are a university that is a Table A provider, you can choose whether you are comparing your monthly or quarterly turnover. You can choose to compare the relevant month or quarter, regardless of whether you report quarterly or monthly.

    Universities that are Table A providers within the meaning of the Higher Education Support Act 2003 use the relevant six-month periods in calculating decline in turnover. 

    See also:

    For all other entities, to qualify from the start of the scheme, the turnover month used can be either March 2020 or April 2020.

    To qualify in a later month, the turnover month can also be between May 2020 and December 2020. However, you will only be eligible for JobKeeper payments for JobKeeper fortnights that end on or after your turnover test period starts.

    If turnover for a quarter is being used, it can be the quarter:

    • 1 April 2020 to 30 June 2020
    • 1 July 2020 to 30 September 2020, but only if first seeking to qualify for fortnights ending in July 2020 or later
    • 1 October to 31 December 2020, but only if first seeking to qualify for fortnights ending in October 2020 or later.

    Example 1 – Turnover test period

    Shizuka runs a beauty salon and applies for the JobKeeper scheme during the first fortnight that the scheme started operating. This fortnight ends on 12 April 2020.

    The turnover test period for Shizuka can be:

    • the month of March 2020 or April 2020, or
    • the quarter from 1 April 2020 to 30 June 2020.
    End of example

    Step 2: identify the relevant comparison period

    This must be the same period in 2019 that corresponds to the turnover test period.

    There may be situations where the turnover in the corresponding period in 2019 does not provide an appropriate relevant comparison. In these situations, you will need to consider the alternative test.

    Example 2 – Relevant comparison period

    Shizuka identifies the relevant comparison period in 2019.

    • For the month of April 2020, the relevant comparison period is April 2019.
    • For the quarter of 1 April 2020 to 30 June 2020, the relevant comparison period is 1 April 2019 to 30 June 2019.
    End of example

    Step 3: work out the relevant GST turnover

    You need to determine:

    • for the turnover test period – what your projected GST turnover will be
    • for the comparison period – what your current GST turnover was in 2019.

    Modifications to projected and current GST turnover

    Projected GST turnover and current GST turnover are defined in the GST Act but have been modified for JobKeeper purposes as explained below.

    The amounts included in calculating projected GST turnover and current GST turnover are the same regardless of whether you are currently GST registered.

    When calculating GST turnover for an entity that operates two or more businesses, the turnover from each business is combined.

    Entities that form part of a GST group or consolidated group must work out the projected GST turnover and current GST turnover and apply the decline in turnover test for each entity individually.

    There are six main modifications to the GST turnover calculation:

    1. Projected GST turnover and current GST turnover are calculated for the relevant month or quarter being tested rather than for 12 months (universities that are Table A providers use the relevant 6-month periods).
    2. If an entity is part of a GST group, the entity calculates its GST turnover as if it wasn’t part of the group. This means that supplies made by one group member to another will be included in GST turnover for the purposes of the decline in turnover test.
    3. The calculation includes the following amounts, unless they are received from an associate
      • receipt of certain gifts by a deductible gift recipient
      • gifts of money, property with a market value of more than $5,000, or listed Australian shares received by an ACNC-registered charity (that is not a deductible gift recipient).
    4. The calculation excludes conditional grants if
      • the grant is received by an ACNC-registered charity – other than a university or a school – from
        • an Australian government agency
        • a local governing body, or
        • the United Nations or its agency
      • the charity notified the Commissioner of its election to exclude these grants within 7 days of choosing to participate in JobKeeper (or within any further time we allow).
    5. The calculation includes amounts received by universities under the Higher Education Support Act 2003 or the Australian Research Council Act 2001.
    6. External Territories (for example, Norfolk Island) are treated as if they formed part of the indirect tax zone (that is, Australia).

    Projected GST turnover and current GST turnover exclude the following:

    • GST you included in sales to your customers (if any)
    • sales that are input taxed sales (for example, bank interest, sale of shares, residential rental income)
    • sales not connected with an enterprise that you carry on (for example, sale of private car)
    • sales that are not made for payment (unless a taxable supply to an associate)
    • payments for no supply (for example, JobKeeper payments)
    • gifts and donations (except for deductible gift recipients and ACNC-registered charities as discussed above)
    • sales not connected with Australia, for example    
      • sales of services made through a business you carry on outside Australia
      • sales of goods purchased and sold from a place outside Australia
      • sale of real property situated outside Australia.

    Financial supplies are usually input taxed sales. However, when a financial supply is made to a non-resident who is not in Australia, the supply is GST-free instead of input taxed.

    Cash or accruals basis

    The turnover calculation requires you to include sales that you have made, or are likely to make, in the relevant month or quarter. The calculations are based on the time you make the sales.

    There are different ways of calculating turnover that may be reasonable in your circumstances.

    We expect the easiest way to calculate your turnover will be to use your normal GST accounting method. In other words, you may use a cash or accruals approach to determine the value of your sales in the relevant month or quarter. If you do this, typically, turnover for the relevant period will equal your GST exclusive sales less your input taxed supplies.

    If you use GST calculations to determine turnover, don’t forget to include GST-free sales.

    If you normally account for GST on an accruals basis, but calculate on a cash basis (or vice versa), we may seek to understand your circumstances to ensure that the calculation achieves an appropriate reflection of your turnover.

    If you aren’t registered for GST, we would expect you to use the same accounting method you use for income tax purposes.

    Importantly, whichever basis you use must be used consistently in comparing the month or quarter in 2020 with the comparison month or quarter in 2019.

    Example 3 – Working out current GST Turnover

    FitnessCo operates a gym and a home meal delivery service and is working out its current GST turnover for the relevant comparison period. FitnessCo is a member of a GST group.

    FitnessCo recorded the following transactions in April 2019:

    Gym membership fees excluding GST

    $10 million

    Sales of home delivered meals excluding GST

    $5 million

    Bank interest

    $3 million

    Sale of real property outside Australia

    $30 million

    Supply made to a member of the GST group

    $10 million

    The current GST turnover for the relevant comparison period would be $25 million. The bank interest and sale of property outside of Australia is excluded, however FitnessCo must also include the supply made to the GST group member. The total gym membership fees and home delivered meals sales are also included and are exclusive of GST.

    End of example


    Example 4 – Included payments

    Margaret runs a family day care, Little Cherubs. When calculating her GST turnover, she correctly includes the payments she receives as an educator from her family day care service provider. She assesses her eligibility and determines she is eligible, based on a 40% decline in turnover.

    End of example

    Estimating your projected GST turnover

    You need to identify the sales you made, or are likely to make, during the turnover test period.

    Given that you can test eligibility part way through a period, when applying the decline in turnover test, you need to consider what you expect to happen for the remainder of that period. Relevant considerations include:

    • the period during which the business is not expected to trade because it has been closed due to the coronavirus, or its ability to trade has been restricted
    • recent patterns in trading that are expected to continue
    • revised business plans.

    The reasons for a decline or expected decline in turnover are not prescribed and are not limited only to the direct impacts of the coronavirus.

    A business may intend on making substantial changes to their structure and operations, as part of responding to the coronavirus. However, projected GST turnover excludes:

    • supplies that are made by transfer of capital assets
    • supplies that are made because of a substantial and permanent reduction in size or scale of the enterprise.

    A 10% reduction is generally accepted as a substantial reduction in size and scale (a smaller reduction may be substantial depending on the circumstances of the enterprise).

    The reduction will be permanent if it is enduring but not if it is reasonable to expect the reduction will end, for example in 1 or 2 years. For example, this means if an entity decides to close 1 out of its 10 stores in its business, the income from selling the store or the assets used in the store would be excluded when calculating projected GST turnover.

    This means that the turnover from structural changes may need to be excluded when calculating projected GST turnover.

    Example 5 – Projected GST turnover, seasonal variances and economic conditions

    Donald runs a garden maintenance and landscaping business. The demand for garden maintenance typically falls in the fourth quarter (1 April 2020 to 30 June 2020) as winter approaches. He has noticed that there have been very few calls for quotes this year compared to usual.

    Donald forecasts that his projected GST turnover for this quarter to be $25,000. This is 50% less than for the same quarter in 2019. This projection includes both the impact of winter on his business and also lower demand for his work due to the more difficult economic conditions.

    This comparison is used by Donald to establish whether he satisfies the decline in turnover test.

    End of example

    Step 4: determine which shortfall percentage applies

    Generally, the shortfall percentage will need to be 30% or more. However, for some ACNC-registered charities and large businesses the shortfall percentage is different.

    ACNC registered charity

    An ACNC-registered charity only needs to show a shortfall of 15% or more. This lower turnover test does not apply to universities and non-government schools that are registered charities. School is defined to mean an institution that provides pre-school courses, primary courses, secondary courses or special education courses.

    Government schools do not qualify for the JobKeeper scheme.

    Aggregated turnover tests for entities likely to exceed $1 billion

    Large businesses must show a shortfall percentage of 50% or more.

    For the purposes of determining if the 50% shortfall percentage applies, a large business is an entity that:

    • had an aggregated turnover of more than $1 billion in the previous income year to the income year in which the turnover test period occurs, or
    • is likely to have an aggregated turnover of more than $1 billion in the income year during which the turnover test period occurs.

    The aggregated turnover test is used to determine if a higher threshold applies to an entity that is not an ACNC-registered charity (other than a university or non-government school). The purpose of this is to ensure that smaller entities that form part of a larger group that have an aggregated turnover of more than $1 billion need to satisfy the 50% decline in turnover to qualify for the JobKeeper payment.

    Aggregated turnover is a defined term and has the meaning given by section 328-115 of the Income Tax Assessment Act 1997.

    Aggregated turnover includes:

    • the entity’s own annual turnover plus
    • the annual turnover of any entity that is connected with and/or is an affiliate of the test entity.

    The annual turnover for an income year is the total ordinary income that an entity derives, directly or indirectly from all sources, whether in or out of Australia, in the income year in the ordinary course of carrying on a business.

    You must apply the aggregation rules in Division 328 of ITAA 1997 to work out whether you need to add any other business entities annual turnover to your annual turnover to work out your aggregated turnover.

    The aggregated turnover of an entity is not necessarily the same as the turnover calculated for a consolidated or MEC group or the annual global income of a significant global entity.

    In working out aggregated turnover, if you are a foreign entity or a foreign entity is connected with you and/or is your affiliate, the annual turnover of that foreign entity needs to be included in your aggregated turnover.

    The calculation of aggregated turnover requires you to disregard any income from certain dealings with entities connected with or affiliated with you to avoid double counting. These entities may be part of the consolidated group, MEC group or a significant global entity. However, it may also include entities that are outside these groups.

    See also:

    Example 6 – Working out the specified percentage based on aggregated turnover

    FlowerCo operates a flower shop with annual turnover of $500 million in 2018–19 income year, being the total ordinary income of the business in that year.

    FlowerCo is connected with PotCo. The annual turnover of PotCo is $2 billion in the 2018–19 income year.

    When calculating the aggregated turnover of FlowerCo, the turnover of PotCo is included as it is a connected entity. As FlowerCo’s aggregated turnover is above $1 billion it will need to use the higher specified percentage (50%) when calculating the shortfall.

    End of example

    Step 5: determine if GST turnover has declined by the specified shortfall percentage

    Work out the percentage that your projected turnover has declined, based on the shortfall in your projected GST turnover as compared to the current GST turnover for the prior comparable period.

    If the shortfall percentage is greater than or equal to the specified percentage, you satisfy the basic decline in turnover test.

    Example 7 – Decline in turnover test satisfied

    Burke Industries assesses its eligibility for JobKeeper payments on 11 May 2020 based on a projected GST turnover for May 2020 of $10 million from its business activities. The relevant comparison is the month of May 2019 for which it had a current GST turnover of $20 million. The May 2020 turnover falls short of the May 2019 turnover by $10 million, which is 50% of the April 2019 turnover. This exceeds the specified percentage of 30% that applies to business entities with less than $1 billion aggregated annual turnover, so the decline in turnover test is satisfied for May onwards.

    End of example


    Example 8 – Large business, decline in turnover test satisfied for one entity in a group but not another

    FluffyCo operates a dog wash business. FluffyCo expanded its business in 2012 by purchasing another company called PuppyCo, which manufactured and sold special treats for puppies. Due to tougher economic conditions, Fluffy Co and PuppyCo decide to test whether they are eligible for the JobKeeper payment on 11 May 2020.

    The relevant turnovers of the two entities


    Annual turnover
    (2018–19 year)

    Current GST turnover
    (May 2019)

    Projected GST turnover
    (May 2020)

    Fluffy Co

    $950 million

    $100 million

    $50 million

    Puppy Co

    $100 million

    $10 million

    $9 million

    Step 1. Identify the turnover test period

    Both FluffyCo and PuppyCo chose May 2020 as their turnover test period. This is the month in which the first JobKeeper fortnight for which they both wish to claim a JobKeeper payment falls.

    Step 2: identify the relevant comparison period

    May 2019 is both FluffyCo's and PuppyCo's comparison period.

    Step 3: work out the relevant GST turnover

    When calculating projected GST turnover, the business forecast is that the dog wash business turnover would significantly decline. The turnover of the dog treat business was not likely to decline significantly as they had moved the business to more online sales and distribution.

    FluffyCo and PuppyCo each consider their GST turnovers individually, without aggregating.

    Step 4: determine which shortfall percentage applies

    FluffyCo and PuppyCo must include the annual turnover of both businesses when calculating their aggregated turnover because they are connected entities. As the annual aggregated turnover for both FluffyCo and PuppyCo for the 2018–19 income year exceeds $1 billion the higher shortfall percentage rate of 50% applies.

    Step 5: determine whether the GST turnover has declined by the specified shortfall percentage

    FluffyCo – the May 2020 turnover falls short of the May 2019 turnover by $50 million, which is 50% of the May 2019 turnover. This equals the specified percentage of 50% that applies to FluffyCo. The company satisfies the decline in turnover test.

    PuppyCo – the May 2020 turnover falls short of the May 2019 turnover by $1 million, which is 10% of the May 2019 turnover. This is less than the specified percentage of 50% that applies to PuppyCo. The company does not satisfy the decline in turnover test for May 2020.

    PuppyCo could test the quarter (1 April 2020 to 30 June 2020) to see whether it satisfies the decline in turnover test for fortnights ending in May 2020. If it does not satisfy the quarter, it could test decline in turnover in subsequent months to determine whether it starts to satisfy this test for later fortnights.

    In determining whether the shortfall percentage is met, the projected and current GST turnover for each entity does not include the turnover of its connected entity.

    End of example

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      Last modified: 28 Sep 2020QC 62132