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Learn how to correctly calculate the liable and exempt components of JobKeeper payments your business received during the COVID pandemic.
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What were JobKeeper payments?
JobKeeper payments were wage subsidies paid by the Commonwealth Government to eligible businesses and not-for-profit entities affected by the COVID-19 pandemic.
Payments were administered by the Australian Taxation Office and covered the period from 30 March 2020 to 28 March 2021.
Employers were required to make payments to employees equal to, or greater than, the amount of the JobKeeper payment. The Commonwealth Government referred to this as the ‘wage condition’.
If the ordinary wages for a JobKeeper employee were less than the JobKeeper payments, the employer was required to pay a top-up payment to bring the total amount paid to the employee up to the relevant JobKeeper rate.
In the interstate wages field, enter only wages that are taxable under the legislation of that state or territory. Any exempt amount of the JobKeeper payment for those interstate wages does not need to be reported in the annual reconciliation.
All liable wages need to be reported as gross wages in your annual reconciliation.
Any liable wages not included in your reporting of gross wages will lead to an under-declaration of reported gross wages and incorrect calculation of tax liability.
Reporting the liable and exempt components of JobKeeper was separate from your reporting of your total NSW taxable wages in your annual reconciliation.
The information provided in these JobKeeper fields of the annual reconciliation did not feed into the calculation of tax payable.
All ordinary wages need to be reported as gross NSW wages in your annual reconciliation.
The top-up amounts paid to your employees had to be deducted from the NSW gross wages.
The payroll tax exemption is only available in situations where an employer topped up wages paid to an employee to meet the JobKeeper minimum rate per fortnight.
Incorrectly calculating the liable and exempt components for JobKeeper will lead to errors:
in the reporting of gross wages in your annual reconciliation, and
in your calculation of the tax liability incurred for the year.
Voluntary disclosure
Contact us to make a voluntary disclosure if you have not declared all liable amounts in your annual reconciliations.
Voluntary disclosures attract a reduced level of penalty tax compared to cases where we identify an underpayment. The full interest rate will still apply.
Non-compliance identified through our data matching activities may result in penalty tax and interest charges, in addition to any underpayments detected.
Contact the payroll tax team
If you have general questions about this topic call 1300 139 815 or +61 2 7808 6904 for international callers.