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  • Partnerships, trusts and companies

    Entities such as partnerships, trusts or companies may be eligible for the JobKeeper payment under the business participation entitlement. However, not-for-profit organisations are not included.

    On this page:

    Work out your eligibility

    Your entity (partnership, trust or company) may be eligible for the JobKeeper payment if it is an eligible business entity and has an eligible business participant.

    An eligible business participant is an individual who is actively engaged in the operation of the business and is not an employee of the business. There can only be one eligible business participant for the entity.

    If your entity is eligible, it can claim one JobKeeper payment per fortnight for the eligible business participant. The entity, not the eligible business participant, receives the JobKeeper payment.

    For JobKeeper fortnights to 27 September 2020, the JobKeeper payment is $1,500.

    For fortnights starting from 28 September 2020, the JobKeeper amount depends on whether your eligible business participant satisfies the 80-hour threshold. If your eligible business participant satisfies the 80-hour threshold, the higher tier 1 rate will apply. If they did not satisfy the 80-hour threshold, the lower tier 2 rate will apply.

    They satisfy the 80-hour threshold if they:

    • were actively engaged in your business for 80 hours or more during their reference period, and
    • have provided you with a written declaration confirming this.

    If your entity also has employees, it may be able to claim JobKeeper payments for each eligible employee.

    See also:

    Work out if you are an eligible business entity

    To claim JobKeeper payments, an entity must satisfy certain eligibility requirements. Your entity is eligible if:

    • on 1 March 2020, it carried on a business in Australia
    • it satisfies the relevant decline in turnover tests.
    • 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 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.

    Note:

    • 'Tax period' has a specific meaning. For example, if you report GST on a quarterly basis, your last tax period before 12 March 2020 would be the quarter ended 31 December 2019. If your entity was not registered for GST, the quarter ended 31 December 2019 will be taken to be its last tax period.
    • From 20 July 2020, if you are an approved provider of a child care serviceExternal Link, you cannot claim for  
      • a business participant or
      • any employees whose ordinary duties relate principally to the operation of child care services.

    If you did not meet the 12 March deadline

    We have discretion to grant further time, but only in limited circumstances, to:

    • hold an ABN where an ABN was not held on 12 March 2020
    • provide notice of assessable income or taxable supplies during the relevant period to us, where notice was not provided by 12 March 2020.

    Your circumstances may fall within a category where we have exercised our discretion to grant you further time. If so, you do not need to apply for the Commissioner's discretion.

    If your circumstances do not fit within one of those categories, and you meet all other JobKeeper requirements, then you can consider applying to the Commissioner to exercise his discretion to grant further time.

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

    See also:

    Ineligible entities

    An entity isn't 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
    • entity is a not-for-profit organisation
    • entity is an Australian government agency (within the meaning of the Income Tax Assessment Act 1997)
    • entity is a local governing body
    • entity is wholly owned by an Australian government agency or local governing body
    • entity is a sovereign entity or an entity owned by a sovereign entity
    • entity is a company in liquidation.
    Child care

    From 20 July 2020, if you are an approved provider of child care servicesExternal Link, you cannot claim JobKeeper payments for any business participants and any employees whose ordinary duties relate principally to the operation of child care services.

    See also:

    Work out if you have an eligible business participant

    An individual may be an eligible business participant of your entity for a JobKeeper fortnight if they meet all the following:

    • were not employed by your entity
    • were actively engaged in the business carried on by your entity (at 1 March 2020 and for the fortnight you're claiming)
    • were one of the following (at 1 March 2020 and for the fortnight you are claiming)  
      • a partner in the partnership
      • an adult beneficiary of the trust
      • a shareholder in or director of the company
    • were on 1 March 2020:  
      • at least 18 years old. If they were 16 or 17 they can also qualify if they're independent or not studying full time, and
      • an Australian resident (under 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
    • were not receiving government parental leave or Dad and Partner Pay
    • were not totally incapacitated for work and receiving payments under an Australian workers’ compensation law in respect of their total incapacity to work
    • were not an employee (other than a casual employee) of another entity
    • have not previously given another entity, or us, a JobKeeper nomination notice
    • If they're a partner, an adult beneficiary of a trust, or a shareholder in or director of a company, they've provided a completed Eligible business participant nomination notice (excluding sole traders) to the entity to record they've agreed to be nominated to receive JobKeeper payments through an eligible business.

    There is a limit of one JobKeeper payment per fortnight for the eligible business participant.

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

    Actively engaged

    An individual will be actively engaged in the business carried on by the entity if they regularly:

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

    An 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 – Actively engaged in a business

    Sato and her mother Akari are shareholders in a company running 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 but Akari is not.

    End of example

    From 28 September 2020, the JobKeeper payment rate will depend on whether your eligible business participant was actively engaged in your business for at least 80 hours in their reference period (generally February 2020).

    The hours that an eligible business participant spent actively engaged in your business can include, but are not limited to, time spent on the following activities:

    • providing services, or selling goods
    • supervising and managing the performance of employees
    • negotiating contracts with suppliers and customers including providing quotes
    • drawing up business plans and planning or budgeting reports
    • managing the record keeping and accounts, including the use of the documents for analysis
    • making financial, legal and tax decisions, including time spent on obtaining professional advice (for example ensuring the business complies with legal and regulatory obligations)
    • managing commercial risks of the business

    An eligible business participant would not be actively engaged in the business whilst doing personal (non-business) activities, merely because they think about your business during this time.

    Example 2 – Hours actively engaged in a business

    Mary runs a homeware retail store. Since the expansion of her business, she has moved away from being at the store and selling goods to customers. Instead she spends her time dealing with suppliers, managing employees and planning for the strategic growth of the business. These activities would still be counted towards the calculation of hours actively engaged in the business.

    End of example

    Work out if you have eligible employees

    If your entity has employees, you may also be able to claim additional JobKeeper payments for your eligible employees.

    Within 7 days of enrolling to receive JobKeeper payments, you must provide an Employee nomination notice to each of your employees.

    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. Employees 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. If your employee does not report the income or cancel their JobSeeker payment, they may incur a debt that they will be required to pay back.

    For JobKeeper fortnights from 28 September 2020, you also need to work out whether the tier 1 or tier 2 rate of the JobKeeper amount applies to your employees. You need to notify us whether the tier 1 rate or the tier 2 rate applies, before you can claim a JobKeeper payment for these fortnights.

    Within 7 days of notifying us of which rate applies, you also need to notify your employees in writing of which rate applies to them.

    See also:

    Fortnights from 28 September 2020

    For fortnights from 28 September 2020, there are two payment rates. Both payment rates decrease from JobKeeper fortnight 21, starting on 4 January 2021.

    JobKeeper fortnights tier 1 and 2 rates

    JobKeeper fortnights

    Tier 1 rate

    Tier 2 rate

    28 September 2020 – 3 January 2021

    $1,200

    $750

    4 January 2021 – 28 March 2021

    $1,000

    $650

    The tier 1 rate of the JobKeeper payment will apply to your eligible business participant if they satisfy the 80-hour threshold. They satisfy this if they:

    • were actively engaged in your business for 80 hours or more in their 29-day reference period, and
    • have provided you with a written declaration confirming this.

    If they do not meet both these requirements you will be entitled to the tier 2 rate for your eligible business participant.

    To ensure you claim the correct rate of JobKeeper payment, an eligible business participant that satisfies the 80-hour threshold should provide you with their declaration as soon as possible.

    Reference period

    The reference period will usually be the month of February 2020.

    There may be circumstances where February 2020 is not a suitable reference period for your eligible business participant. If your eligible business participant does not satisfy the 80-hour threshold in February 2020, you should consider whether it is satisfied using an alternative reference period

    If more than one reference period can apply to your eligible business participant, the 80-hour threshold only needs to be satisfied in one of those reference periods for the tier 1 rate to apply to them.

    Alternative reference period – less than 80 hours and not representative

    Use this alternative reference period if your eligible business participant’s:

    • total hours of active engagement in your business was less than 80 hours in February 2020, and
    • when compared to earlier 29-day periods (each wholly within a calendar month), February 2020 is not representative of your eligible business participant’s typical number of hours of active engagement in your business.

    For example, your eligible business participant was sick or injured during February 2020, so that period is not representative of their typical time spent actively engaged in your business.

    The alternative reference period is the most recent 29-day period (wholly within a calendar month):

    • ending before 1 March 2020
    • in which the eligible business participant’s total hours of active engagement in your business was representative of a typical 29-day period.

    Example 3 – Less than 80-hours and not representative

    Coco is the sole shareholder and director of Home Designs Pty Ltd (Home Designs), which carries on an interior design business.

    Throughout 2019, Coco was typically actively engaged in the business for 50 hours a week.

    From 6 January 2020 until 3 August 2020, Coco was a full-time carer for an ill relative which significantly reduced the time Coco was actively engaged in Home Designs’ business.

    As a result, the total number of hours that Coco was actively engaged in Home Designs’ business in February 2020 (being the reference period) was less than 80 hours. This means Coco has met the first condition for this alternative reference period to apply.

    Coco was typically actively engaged in Home Designs’ business 50 hours a week (over 200 hours in a 29-day period) before 6 January 2020. Therefore, February 2020 did not represent a typical 29-day period Coco was actively engaged in the business. This means Coco has met the second condition for this alternative reference period to apply.

    The alternative reference period for Coco will be the period from 3 December 2019 to 31 December 2019. This period is used because it is the most recent 29-day period, wholly within a calendar month, in which Coco’s total hours of active engagement in Home Designs’ business were typical.

    The tier 1 rate of the JobKeeper payment applies to Coco because she:

    • was actively engaged in Home Designs’ business for 80 hours or more in the period from 3 December 2019 to 31 December 2019, and
    • has given written notice of those hours to Home Designs.
    End of example

    Alternative reference period – business participant for part of February 2020

    Use this reference period if your eligible business participant was not a partner, adult beneficiary, shareholder or director during all of February 2020.

    The alternative reference period is the 29-day period starting on the day your eligible business participant became a partner, adult beneficiary, shareholder or director.

    If this alternative reference period applies, you still need to meet the requirements to be an eligible entity to be entitled to JobKeeper payments, including the 12 March deadline.

    Alternative reference period – drought and natural disaster

    Use this reference period if your entity conducted business or some of its business in a declared drought zone or declared natural disaster zone during February 2020.

    The alternative reference period is the most recent 29-day period, wholly within a calendar month, ending before 1 March 2020 during which your entity did not conduct business or some of its business in a declared drought zone, or declared natural disaster zone.

    Record keeping

    If your eligible business participant gives you a declaration that they were actively engaged in your business for at least 80 hours during their reference period, they should keep records to show how they came to this conclusion. For example, these records might include:

    • business diaries
    • appointment books
    • log books
    • hours billed
    • invoices issued
    • time sheets or attendance records
    • records prepared for other business or statutory purposes.

    Notification of payment rate

    Before you can claim a payment for a JobKeeper fortnight from 28 September 2020, you must notify us whether the tier 1 or tier 2 rate applies your eligible business participant.

    There are penalties for making a false or misleading declaration.

    Within 7 days of notifying us which JobKeeper rate applies to your eligible business participant, you must also notify them in writing of their rate.

    Examples

    Example 4 – 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. DSC Accounting also employs four full-time staff. Each of the partners and employees is over 18 and an Australian resident.

    DSC Accounting met the original decline in turnover test in addition to the actual decline in turnover tests for the JobKeeper extension periods.

    As only one partner can be nominated as the eligible business participant for the JobKeeper payment, the partnership must decide who this will be. This choice applies for the duration of the time the business participates in the JobKeeper Payment including the JobKeeper extension periods. The entitlement to the JobKeeper payment as a business owner applies even if there are no employees in the business.

    If DSC Accounting satisfies the JobKeeper eligibility conditions for paid employees, it could also qualify for JobKeeper payments for each of its eligible employees. It could receive up to five JobKeeper payments for each fortnight (for one eligible business participant and four eligible employees).

    End of example

     

    Example 5 – Adult beneficiary of a trust

    Fabian is a personal trainer and operates a gym and an online training program. He 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 isn't employed by his business but actively manages the business and isn't employed elsewhere. There is also one permanent part-time employee employed in the business.

    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 satisfied the original decline in turnover test

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

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

    To continue being an eligible business under the JobKeeper extension periods the trust must satisfy the actual turnover test. It must also determine which tier of payments apply to Fabian and its part-time employee (if eligible).

    End of example

    Enrol for the JobKeeper payment

    How to prepare

    When you have worked out that your entity is eligible, and your individual non-employee is an eligible business participant, you need to enrol.

    To claim the JobKeeper payment for a fortnight you must enrol before the end of the month in which the fortnight ends.

    You do this in the Business Portal or your registered tax or BAS agent can do it for you.

    There are steps you will need to take before your entity can receive JobKeeper payments.

    • Step 1: If you are joining JobKeeper for the first time you need to enrol
    • Step 2: Identify and maintain your eligible employees or business participants
    • Step 3: Make a business monthly declaration.

    If you are currently enrolled and would like to continue to claim JobKeeper extension one, you will need to check your continuing eligibility from 1 October 2020.

    To claim JobKeeper extension 2, you will need to check your continuing eligibility again from 1 January 2021.

    For detailed instructions on how to enrol, identify and maintain employees and make a monthly business declaration, see the JobKeeper guides.

    See also:

    JobKeeper and your entity's tax return

    If your entity received JobKeeper payments, the entity must include the payments as business income in its tax return. Include the amounts at the label 'Assessable government industry payments'.

    Last modified: 21 Sep 2020QC 62814