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  • Sole traders and other entities

    Media: JobKeeper Payment for sole traders
    http://tv.ato.gov.au/ato-tv/media?v=bi9or7on4zii67External Link (Duration: 1:17)

    Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to JobKeeper payment under the business participation entitlement. However, not-for-profit organisations are not included under the business participation entitlement.

    Step-by-step instructions

    For information on how to enrol, identify and maintain employees, and make a monthly business declaration, see JobKeeper guide – sole traders.

    On this page:

    Work out your eligibility

    You need to be an eligible entity and have an eligible business participant.

    Your entity may be eligible for JobKeeper payment if you:

    A limit applies of one $1,500 JobKeeper payment per fortnight for the eligible business participant. If your entity also has employees, you may also be able to claim additional JobKeeper payments of $1,500 per fortnight per eligible employee.

    The entity, not the eligible business participant, receives the JobKeeper payment. The exception is a sole trader, who is both the business entity and an eligible business participant, and so receives the JobKeeper payment themselves.

    Eligible business participant

    Your non-employee individual is an eligible business participant of your entity for the fortnight if they meet all the following:

    • They are an individual not employed by your entity.
    • They are actively engaged in the business carried on by your entity (at 1 March 2020 and for the fortnight you are claiming).
    • They are one of the following (at 1 March 2020 and for the fortnight you are claiming):  
      • a sole trader
      • a partner in the partnership
      • an adult beneficiary of the trust
      • a shareholder or director in the company.
       
    • As at 1 March 2020, they are both:  
      • aged at least 16 (or 18 years or over if a beneficiary in the case of a trust)
      • an Australian resident (within the meaning of section 7 of the Social Security Act 1991), or a resident for income tax purposes and the holder of a special category (Subclass 444) visa.
       
    • They are not currently receiving government parental leave or Dad and Partner Pay.
    • They are not currently totally incapacitated for work and receiving payments under an Australian workers’ compensation law in respect of their total incapacity to work.
    • They are not an employee (other than a casual employee) of another entity.
    • They have given your entity (or us, if a sole trader) a JobKeeper nomination notice.
    • They have not previously given another entity, or us, a JobKeeper nomination notice.

    Note: your entity cannot have more than one eligible business participant.

    A non-employee individual will be actively engaged in the business carried on by the entity if they regularly:

    • perform or manage the performance of the services provided by the business
    • sell or manage the sale of the goods of the business
    • perform other activities associated with managing the business
    • exercise control over activities related to business strategy and growth.

    A non-employee individual will not be actively engaged in the business simply because they:

    • own an interest in the business or invest capital in it
    • provide advice or other assistance to the business from time-to-time.

    Example 1

    Annette owns a tourism business associated with Australian ski resorts. During the ski season Annette works long hours managing all aspects of ski holidays for her clients. During the off season Annette works on marketing, building business partnerships, securing future bookings and book keeping. Annette is actively engaged in the business.

    End of example

     

    Example 2

    Sato and her mother Akari are shareholders in a company carrying on a transport business. Sato drives a company van 6 days a week, while Akari provided capital for the business and occasionally gives Sato advice about ways to grow the business. Sato is actively engaged in the business while Akari is not.

    End of example

    Eligible business entities

    Your entity is eligible if:

    • on 1 March 2020, it carried on a business in Australia
    • it satisfies the fall in turnover test for the relevant period
    • it satisfied certain conditions at 12 March 2020, being  
      • it had an ABN on 12 March 2020, and
      • it had lodged, on or before 12 March 2020, at least one of:  
        • a 2018–19 income tax return showing it had an amount included in its assessable income in relation to it carrying on a business, or
        • an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing it made a taxable, GST-free or input-taxed sale.
         
       

    We have the discretion to give further time, but only in limited circumstances, including if you:

    • did not have a requirement to lodge your 2018–19 return until after 12 March 2020
    • have deferred your lodgment under an extension of lodgment date we initiated.

    Examples include:

    • your business is included in a registered agent’s lodgment program where the lodgment due date is after 12 March 2020
    • your business has an automatic ATO lodgment deferral in place for example, it was affected by the Australian bushfires in late 2019, and you are not registered or required to be registered for GST, so will not have lodged a BAS before 12 March 2020.

    If the business entity and the eligible business participant met all JobKeeper eligibility requirements, other than the requirements to hold an ABN and/or provide notice to the Commissioner of income or taxable sales by 12 March 2020, you should consider applying to the Commissioner to exercise his discretion to grant further time. See JobKeeper application for Commissioner’s discretion in respect of an eligible business participant.

    You cannot enrol to receive a JobKeeper payment until you are notified that the Commissioner has granted the further time requested.

    Ineligible entities

    An entity is not eligible for the JobKeeper payment for an eligible business participant if:

    • the Major Bank Levy was imposed on the entity or a member of its consolidated group for any quarter before 1 March 2020
    • the entity is a not-for-profit organisation
    • the entity is an Australian government agency (within the meaning of the Income Tax Assessment Act 1997)
    • the entity is a local governing body
    • the entity is wholly owned by an Australian government agency or local governing body
    • the entity is a sovereign entity or an entity owned by a sovereign entity
    • the entity is a company in liquidation
    • the entity is an individual who has entered bankruptcy.

    Enrol and claim the JobKeeper payment

    When you have worked out that your business is an eligible entity and your individual non-employee is an eligible business participant, you need to enrol. Your entity needs to enrol by 31 May 2020 in respect of claims for the JobKeeper fortnights ending in April and May 2020. Your entity will also need to provide details of the eligible business participant to us. Then, within 7 days your entity must inform the eligible business participant that it has done so (unless you are a sole trader).

    The eligible business participant needs to complete a nomination notice.

    If you are a sole trader, you can nominate yourself as the eligible business participant during the online enrolment process in the Business Portal or in ATO online services using myGov.

    If the eligible business participant is a partner, adult beneficiary of a trust, or a shareholder in or director of a company, they need to complete the Eligible business participant nomination notice (excluding sole traders) to record that they have agreed to be nominated as the eligible business participant.

    Sole trader

    How to prepare

    • Check your business meets the eligibility requirements.
    • Work out if your business has had a fall in turnover. You can use the basic test to determine your fall in turnover. If you don't meet the basic turnover test, alternative tests are available for some cases when turnover periods are not appropriately comparable.
    • Choose whether to use ATO online services or the Business Portal, and set up your systems if you don’t have an account.
    • Get advice from your registered tax or BAS agent if you need help. They can enrol, identify and declare for JobKeeper on your behalf.
    • If you find it difficult to interact with us online and don't use a registered tax or BAS agent, you can call us for help.

    For detailed information on how to prepare in our how to guide for sole traders, see our JobKeeper guide – sole traders

    If you do not have employees

    • Consider if you are nominating yourself as an eligible business participant. You can claim the JobKeeper payment for yourself if you are a sole trader.

    If you do have employees

    If you have employees, you also need to:

    • Check your employees meet the eligibility requirements.
    • Continue to pay at least $1,500 to every eligible employee per JobKeeper fortnight (the first JobKeeper fortnight was the period from 30 March to 12 April).
    • Re-hire or re-engage employees you let go or stood down and pay them if you want to claim the JobKeeper payment for them.
    • Send a JobKeeper employee nomination notice to all your eligible employees to complete and return to you before you claim JobKeeper payments for those employees. You can either          
    • Each eligible employee must agree to be nominated by you. They do this by completing the JobKeeper employee nomination notice and returning it to you for your records before you claim the payment for that employee. Keep the employee nomination notice on file.

    Step 1: Enrol and nominate for the JobKeeper payment

    You only need to complete this step once. Your registered tax or BAS agent can also enrol for you.

    • Log into ATO Online services via myGov or the Business Portal using myGovID.
    • To enrol, you will need to confirm:  
      • your business has experienced a fall in turnover of at least 30%
      • expected number of eligible employees (if you have them)
      • that you are enrolling as a sole trader (so you can claim payments for yourself)
      • financial institution and contact details for receiving JobKeeper payments.
       
    • Notify all your eligible employees that you have nominated them.
    • You will need to enrol before you can move to Step 2, and identify yourself and any employees you are claiming for.
    • Enrolments are open until the end of May if you need extra time.

    For more information on how to enrol, see our JobKeeper guide – sole traders.

    Step 2: Identify and maintain your eligible employees or business participants

    You or your registered tax or BAS agent need to identify each person that you will claim the JobKeeper Payment for. You only need to identify yourself or eligible employees once.

    If you don’t have any employees:

    • Log into ATO Online services using myGov, or the Business Portal using myGovID to confirm:      
      • your details as the sole trader and eligible business participant.
      • the JobKeeper fortnights you are claiming for
      • that you don’t have any employees you are claiming for.
       

    If you do have employees

    If you have eligible employees, how you identify them depends on your payroll software and number of employees.

    • Directly into your STP enabled payroll software if it is updated with JobKeeper functionality  
      • First, you will need to update each eligible employee in your payroll software and then lodge an STP pay event using your payroll software.
      • Then, log in to ATO Online services using myGov, or the Business Portal using myGovID to confirm your details, the fortnights you are claiming for and the number of employees you are claiming for based on your lodged STP pay report.
       
    • If your STP payroll software is not updated with JobKeeper functionality and you have 200 employees or less  
      • First, log in to ATO Online services using myGov, or the Business Portal using myGovID to confirm your details, the JobKeeper fortnights you are claiming for yourself.
      • We'll give you a list of all your employees that you reported to us through your STP pay reports at the start of March. You will then need to confirm each of your employees eligibility and the fortnights you are claiming for them.
       
    • If you don't have STP enabled payroll software, and you have 40 employees or less  
      • You'll need all your eligible employees tax file number (TFN) and date of birth handy before you log in.
      • Then, log in to ATO Online services using myGov, or the Business Portal using myGovID to confirm your details, the JobKeeper fortnights you are claiming for yourself.
      • From there, you will need to add your eligible employees by entering their tax file number (TFN) and date of birth and the JobKeeper fortnights you are claiming for them. You can add up to 40 employees.
       
    • If you don't have STP enabled payroll software, and you have more than 40 employees    

    For detailed information on how to identify and maintain your employees, see our JobKeeper guide – sole traders

    Step 3: Make a business monthly declaration

    You must provide information as to your current and projected turnover. This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme.

    If your eligible employees change or leave your employment, you will need to notify us through this monthly declaration.

    To make your business declaration each month:

    • You will need to log into ATO online services through myGov, or the Business Portal using myGovID.
    • Provide us with your business' current and projected GST turnover.
    • Reconfirm your eligible employees and your own details.

    What you need to do for your employees

    From 1 May 2020 with the introduction of Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (NO 2) 2020 there is an obligation that within seven days of enrolling to receive JobKeeper payments, you must provide an Employee nomination notice to each of your employees. If you had already enrolled on or before 1 May 2020, you need to satisfy this requirement by 8 May 2020. Find out more about this at Employers.

    If your employees have multiple employers, they can usually choose which employer they want to nominate through. However, if your employees are long-term casuals and have other permanent employment, they cannot nominate you. They cannot be nominated for the JobKeeper payment by more than one employer.

    If an employee is receiving – or in the process of applying for – a Services Australia income support payment like JobSeeker payment, they should contact Services AustraliaExternal Link and let them know that their employer has applied for the payment.

    The ATO and Services Australia are working together to identify instances of incorrect eligibility for JobKeeper versus JobSeeker. If your employee does not report the income or cancels their JobSeeker payment, they may incur a debt that they will be required to pay back.

    Find out about:

    Partnership, trust or company

    How to prepare

    • Check your business or not-for-profit organisation meets the eligibility requirements, including the turnover test. The turnover calculation is based on GST turnover. This applies even if an entity is not registered for GST.
    • If you are a director or a shareholder of a company, a partner in a partnership, or an adult beneficiary of a trust, consider whether you will nominate as an eligible business participant and check you meet the eligibility requirements.
    • Download the JobKeeper eligible business participant nomination notice (excluding sole trader) form and ensure one eligible business participant has completed the nomination notice and returned it to you. You do not need to send this form to us but you must keep it for your records.
    • If you have employees, check they meet the employee eligibility requirements.
    • Re-hire or re-engage employees you let go or stood down and pay them if you want to claim the JobKeeper payment for them.
    • Continue to pay at least $1,500 to every eligible employee per JobKeeper fortnight (the first JobKeeper fortnight was the period from 30 March to 12 April).
    • Send a JobKeeper employee nomination notice to all your eligible employees to complete and return to you before you claim JobKeeper payments for those employees. You can either:          
    • Each eligible employee must agree to be nominated by you. They do this by completing the JobKeeper employee nomination notice and returning it to you for your records before you claim the payment for that employee. Keep the employee nomination notice on file.
    • If you use the Business Portal, you will need a myGovID linked to your ABN in relationship Authorisation Manager (RAM). You can find out how to set this up at ato.gov.au/mygovid
    • Your registered tax or BAS agent can enrol, identify and declare for JobKeeper on your behalf using Online service for agents.
    • If you find it difficult to interact with us online and don't use a registered tax or BAS agent, you can call us for assistance.

    Step 1: Enrol for the JobKeeper payment

    You only need to complete this step once. Your registered tax or BAS agent can also enrol for you.

    • Log into to the Business Portal using myGovID.
    • To enrol, you will need to confirm:  
      • business has experienced a fall in turnover
      • expected number of eligible employees (if you have them)
      • an eligible business participant, if you are enrolling one
      • bank and contact details for receiving JobKeeper payments
       
    • Notify all your eligible employees that you have nominated them.
    • You will need to enrol before you can move to Step 2, and identify any employees you are claiming for.
    • Enrolments are open until the end of May if you need extra time.

    Detailed information on how to enrol available in our JobKeeper guides for employers and sole traders.

    Step 2: Identify and maintain your eligible employees

    You or your registered tax or BAS agent need to identify each person that you will claim the JobKeeper Payment for. You only need to identify your eligible employees and eligible business participant once.

    If you have an eligible business participant, remember not to include them as an employee. You can add them in the Business Portal.

    How you identify your eligible employees depends on your payroll software and number of employees.

    • Directly into your STP enabled payroll software if it is updated with JobKeeper functionality  
      • First, you will need to update each eligible employee in your payroll software and then lodge an STP pay event using your payroll software.
      • Then, log in to ATO Online services using myGov, or the Business Portal using myGovID to confirm your details, the fortnights you are claiming for and the number of employees you are claiming for based on your lodged STP pay report.
       
    • If your STP payroll software is not updated with JobKeeper functionality and you have 200 employees or less  
      • First, log in to ATO Online services using myGov, or the Business Portal using myGovID to confirm your details, the JobKeeper fortnights you are claiming for yourself.
      • We'll give you a list of all your employees that you reported to us through your STP pay reports at the start of March. You will then need to confirm each of your employees eligibility and the fortnights you are claiming for them.
       
    • If your STP payroll software is not updated with JobKeeper functionality and you have more than 200 employees  
      • First, you will need to create a JobKeeper pay report.
      • Ask the ATO for a prefilled JobKeeper report which can update and send back to us to through the Business Portal Transfer file function.
      • Or use the JobKeeper Payment Guide sample payload files – Blank file (CSV, 285KB) and Example file (CSV, 710KB) – to produce your own JobKeeper report and provide it back to us by uploading it through the Business Portal Transfer file function.
       
    • If you don't have STP enabled payroll software, and you have 40 employees or less  
      • You'll need all your eligible employees tax file number (TFN) and date of birth handy before you log in.
      • Then, log in to ATO Online services using myGov, or the Business Portal using myGovID to confirm your details, the JobKeeper fortnights you are claiming for yourself.
      • From there, you will need to add your eligible employees by entering their tax file number (TFN) and date of birth and the JobKeeper fortnights you are claiming for them. You can add up to 40 employees.
       
    • If you don't have STP enabled payroll software, and you have more than 40 employees    

    Detailed information on how to identify and maintain your employees is available in our JobKeeper guides for employers and sole traders.

    Step 3: Make a business monthly declaration

    Each month, we will ask you to indicate how your business is performing. See Applying the turnover test to calculate your current month and projected next month GST turnover. You will also need to reconfirm the eligibility of your business and your reported eligible employees.

    • To make your business declaration each month:
    • You will need to log into ATO online services through myGov, or the Business Portal using myGovID.
    • Provide us with your business' current and projected GST turnover.
    • Reconfirm your eligible employees and your own details.
    • You can also complete this step through your registered tax or BAS agent.

    What you need to do for your employees

    From 1 May 2020 with the introduction of Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (NO 2) 2020 there is an obligation that within seven days of enrolling to receive JobKeeper payments, you must provide an Employee nomination notice to each of your employees. If you had already enrolled on or before 1 May 2020, you need to satisfy this requirement by 8 May 2020. Find out about this at Employers.

    If your employees have multiple employers, they can usually choose which employer they want to nominate through. However, if your employees are long-term casuals and have other permanent employment, they cannot nominate you. They cannot be nominated for the JobKeeper payment by more than one employer.

    If an employee is receiving – or in the process of applying for – a Services Australia income support payment like JobSeeker payment, they should contact Services AustraliaExternal Link and let them know that their employer has applied for the payment.

    The ATO and Services Australia are working together to identify instances of incorrect eligibility for JobKeeper versus JobSeeker. If your employee does not report the income or cancels their JobSeeker payment, they may incur a debt that they will be required to pay back.

    Find out about:

    Frequently asked questions

    Answers to some commonly-asked questions:

    • Can two different businesses claim JobKeeper payments for the same individual?  
      • No. Only one claim per individual for JobKeeper payments can be made. An entity cannot claim JobKeeper payments for an individual if there is already a JobKeeper claim being made by another business or employer for that individual.
       
    • Can a sole trader with more than one business receive multiple JobKeeper payments?  
      • No. You can only receive the JobKeeper payment once.
       
    • Can more than one eligible business participant be nominated by an entity?  
      • No. Only one eligible business participant can be nominated. This means that a business entity must choose which eligible business participant to nominate, and that entity is only entitled to one JobKeeper payment per fortnight.
       
    • Can a sole trader receive JobKeeper payments when they are also an employee of another business?  
      • No. An eligible business participant cannot be an employee (other than a casual employee) of another entity. If the sole trader is both a long term casual employee of another business and also an eligible sole trader, they can choose to either let their employer claim the JobKeeper payments on their behalf, or they can claim as a sole trader, but not both.
       

    Examples

    Sole trader

    Example – eligibility of sole trader

    Jameela is a sole trader and operates a cupcake business. She is an Australian resident with an ABN and has been running her business since 2017. Jameela runs her business as a sole trader with no employees.

    Jameela projects a fall in turnover in her cupcake business of approximately 80% in April 2020 compared with April 2019 as a result of COVID-19.

    Jameela is an eligible business participant and qualifies for JobKeeper Payment.

    End of example

    Partner in a partnership

    Example – partner in a partnership

    Danielle, Shelley and Calvin are individual partners in a partnership operating an Australian business, DSC Accounting. The partnership was formed in 2012 and has an ABN. As they are partners, they are not employees, and they each receive partnership distributions. There is also four full-time staff employed by DSC Accounting. Each of the partners and employees are over 16 years old and are Australian residents.

    On 10 April 2020, DSC Accounting projects a fall in turnover of approximately 25% compared to March 2019 and April 2019. It also projects that for the quarter April to June 2020 a 25% fall in turnover compared to the April to June quarter of 2019. Accordingly, the business is not qualified for the JobKeeper Payment scheme at this time.

    However, on 4 May 2020, a fall in turnover of 45% for May 2020 is projected, when compared to May 2019. Therefore the business meets the requirements for fall in turnover from that time onwards.

    As only one of the partners (Danielle, Shelley or Calvin) can be nominated as the eligible business participant for the JobKeeper payment, the partnership will need to decide which individual this is. This choice applies for the duration of the time the business is participating in the JobKeeper Payment scheme. The entitlement to the JobKeeper payment as a business owner applies even if there were no employees in the business.

    For DSC Accounting, if the JobKeeper eligibility conditions for paid employees are satisfied, the business could also qualify for JobKeeper payments for each of its eligible employees. DSC Accounting could receive up to five JobKeeper payments for each fortnight (for one eligible business participant and four eligible employees).

    End of example

    Beneficiary of a trust

    Example – Adult beneficiary of a trust

    Fabian is a personal trainer and operates both a gym and an online training program. Fabian runs his Australian business through a discretionary trust where he is a beneficiary and receives trust distributions.

    The trust was settled and acquired an ABN in 2011. Fabian is not employed by his business but actively manages the business, and is not employed elsewhere. He also has one permanent part time employee.

    The gym closed on 20 March 2020. The online personal training platform is still operating and Fabian is focusing on growing this part of his business. As a result of the gym closure, the trust’s turnover is expected to fall by 70% in April 2020 compared with April 2019.

    Fabian is 36 years old and an Australian resident. Fabian is an eligible business participant and the trust qualifies under the JobKeeper Payment scheme, with the trust receiving the JobKeeper payment.

    The trust could also qualify for an additional JobKeeper payment if the part time employee is eligible.

    End of example

    Sole trader and employee

    Example – Sole trader and employee

    Zora is a sole trader and actively manages her florist business, Flowers by Zora. She is also employed in another business owned by another entity on a permanent part-time basis as an administrative assistant.

    The Flowers by Zora business has suffered a significant downturn due to COVID-19. Zora's hours at her office job have been cut as a result of COVID-19, causing a decline in the business of her employer.

    Zora is an eligible employee for the purpose of the JobKeeper Payment scheme for her part time job as an administrative assistant, and her employer qualifies for a JobKeeper payment for her employment.

    Zora, in her capacity as a sole trader, is not eligible for the JobKeeper payment because she is a permanent (not casual) employee of another enitity. This conclusion would be the same whether her employer qualifies for JobKeeper payments or not.

    End of example

     

    Example – Sole trader with more than one business

    Mathew is a sole trader and actively manages two businesses:

    • Matt’s Sculptures, which sells Mathew’s handmade art sculptures at markets and galleries, and
    • Matt’s Designs, which is Mathew’s graphic design business.

    Both businesses are operated in Australia and have annual turnovers between $60,000 to $80,000. Mathew has an ABN, is 43 years old and is an Australian resident.

    Matt’s Sculptures and Matt’s Designs have both experienced a fall in turnover as a result COVID-19. Matt's Sculptures has ceased selling at markets and galleries while they are closed, but continues to operate selling art sculptures online and using a delivery service. Matt’s Designs continues to operate through an online platform.

    Mathew forecasts that his turnover will fall by 45% in April 2020 compared with April 2019, due to a reduction in work contracts and discretionary spending by customers.

    Mathew is an eligible business participant for the purpose of the JobKeeper Payment scheme, satisfying all requirements. Mathew cannot however, qualify for the JobKeeper payment twice on the basis that he runs two businesses. He can only nominate under the JobKeeper Payment scheme himself as the eligible business participant for the one entity (himself as sole trader).

    If Mathew instead operated Matt’s Designs through a company, Matt’s Designs Pty Ltd, the outcome would still be the same in that only one JobKeeper payment can be claimed.

    This is because only one entity (Mathew as sole trader, or Matt’s Designs Pty Ltd) may be entitled to the JobKeeper payment for the one individual who is the eligible business participant (that is, Mathew).

    If both Mathew in his capacity as a sole trader and shareholder or director of Matt’s Designs Pty Ltd satisfies the eligibility conditions for a JobKeeper payment, Mathew would need to decide in which capacity he will be an eligible business participant and therefore whether he becomes entitled to the JobKeeper payment as a sole trader, or Matt's Designs Pty Ltd becomes entitled to the JobKeeper payment.

    End of example
    Last modified: 27 May 2020QC 62190