JobMaker Hiring Credit

Visit the ATO’s website for more info on the JobMaker Hiring Credit.

Access the ATO’s JobMaker Hiring Credit payment estimator here.

Want to chat to our accounting team about JobMaker Hiring Credit?

The $4 billion JobMaker Hiring Credit, announced as part of the FY21 federal budget, is a key part of the Government’s economic response to the COVID-19 pandemic. (Check out our summary of the FY21 federal budget.)

Youth unemployment was particularly impacted by the Government’s response to COVID-19. The JobMaker Hiring Credit should help get young people back into the workforce. 

The legislation enacting the JobMaker Hiring Credit has now passed Parliament. We have outlined below some key eligibility requirements you should know. 

At a glance

The JobMaker Hiring Credit is a fixed amount of $200 per week for eligible employees aged 16 to 29 years and $100 per week for eligible employees aged 30 to 35.

This means that eligible employers could receive either $5k or $10k per eligible employee for a maximum period of 12 months.

Eligible employers can access the JobMaker Hiring Credit for each eligible additional employee they hire between 7 October 2020 and 6 October 2021.

The duration of the scheme and how to apply

The scheme commenced on 7 October 2020 and ends on 6 October 2022. Entitlement to the JobMaker Hiring Credit payment is assessed in relation to 3 month periods. The first JobMaker period is 7 October 2020 to 6 January 2021. 

You must notify the ATO of your intention to participate in the JobMaker scheme by the end of the period that the entity first elects to participate. E.g. If you want to participate in the JobMaker period from 7 October 2020 to 6 January 2021, you must notify the ATO by 6 January 2021. 

The JobMaker Hiring Credit will be paid to eligible employers quarterly in arrears by the ATO. The first payment will be made in February 2021 (for new jobs created between 7 October 2020 and 6 January 2021). 

Who is an Eligible Employer?

Broadly, an employer is entitled to a JobMaker Hiring Credit payment for a period if:

  1. It carries on a business in Australia, has an ABN and does not have any outstanding income tax or GST returns; 

  2. It has one or more eligible additional employees for the period; 

  3. It has a headcount increase for the period; 

  4. It has a payroll increase for the period; 

  5. It has notified the ATO of its election to participate in the scheme and meets ongoing reporting requirements for the duration of the scheme; and 

  6. It is not entitled to a JobKeeper payment for an individual. Meaning that employers can’t participate in both the JobMaker scheme and JobKeeper scheme simultaneously. 

Further detail is provided below in respect of points 3 and 4 above: 

Employer must have a headcount increase for the JobMaker period

To be entitled to the JobMaker Hiring Credit, an entity must at least have one employee who the entity is not entitled to the JobMaking Credit for. Meaning that a sole trader cannot employ themselves to receive the JobMaker Hiring Credit payment. 

The entity must have created additional employment during the period. Additional employment is measured by reference to the number of employees that were employed by the entity on 30 September 2020. This requirement prevents entities from replacing their existing employees with eligible additional employees. 

Employer must have a payroll increase for the JobMaker period 

An entity satisfies the payroll increase condition if the entity’s total payroll amount for the JobMaker period is greater than the entity’s baseline payroll. 

An entity’s baseline payroll amount is determined as a reference period that ended on or immediately before 6 October 2020. The baseline payroll amount and the JobMaker period payroll amount must compare the equivalent amount of payroll cycles.

Who is an Eligible Employee?

An eligible additional employee is an individual who:

  1. Was employed by the eligible employer at any time during the JobMaker period;

  2. Commenced employment between 7 October 2020 and 6 October 2021;

  3. Was aged between 16 and 35 years at the time they commenced employment; 

  4. Commenced employment no more than 12 months before the start of the relevant JobMaker period; 

  5. Has worked on average 20 hours a week whilst employed by the eligible employer;

  6. Meets the pre-employment requirements - for at least 28 of the 84 days immediately before being employed by the eligible employer, the individual was receiving either the government parental payment, youth allowance or the JobSeeker payment; and 

  7. Is not an excluded additional employee.

A deep dive into these requirements should be performed on a case by case basis. The individual must provide a written notice to the employer confirming that they meet the requirements. 

An individual is excluded from being eligible if it is, any of the following persons, or a relative of the following person: 

  • If the entity is a sole trader - the sole trader; 

  • If the entity is a partnership - a partner of the partnership; 

  • If the entity is a trust - the trustee or beneficiary of that trust; and 

  • If the entity is a company - a shareholder in the company or a director of the company.