Why your JobKeeper payment may be less than $1,500
Around 6 million Australians will receive fortnightly payments of $1,500 over the next six months, but the Australian Tax Office has reminded workers not to be surprised if they don’t get to keep the full payment.
Also read: JobKeeper passed: Am I eligible for the $1,500 wage subsidy?
Also read: JobSeeker vs JobKeeper: Who gets taxed, and who comes out better off?
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“You will not be paid the JobKeeper payment by the ATO,” it said in its employee fact sheet.
“The payment comes from your employer who is later reimbursed by the ATO. Tax will be withheld from the payment so you may receive less than $1,500 in your bank account.”
Law firm Clayton Utz explained that eligible employers will still have Pay As You Go (PAYG) tax withholding obligations, regardless of whether the eligible employee has been stood down or is still completing work.
“The eligible employer must provide the eligible employee at least $1,500 per fortnight (before tax) to apply for the JobKeeper Payment. The eligible employee will be taxed (withheld by the eligible employer) on this payment.”
Your payment can’t be less than $1,500 before tax
While your payment may be affected by tax obligations, there aren’t any other reasons why you should receive less than $1,500 from your employer every fortnight if you’re receiving the JobKeeper payment.
The ATO has warned employers that it will be tracking the flow of payments. This means your boss cannot split payments between themselves and the employee, between several employees or claim a portion of the $1,500 fortnightly payment on administration fees.
So my SIL has been advised by her Sydney employer they'll be withholding $100 per JobKeeper payment for "administration" costs.
Legal? Not legal? @sallymcmanus
— Phteven with a pee haitch (@BroHilderchump) April 15, 2020
So if you’re an eligible employee and your employer is an eligible employer, you must receive at least $1,500 before tax every fortnight.
"An entity that does not comply with its obligations in relation to the JobKeeper Payment is also potentially liable for a wider range of significant administrative and criminal sanctions under the tax law and general criminal law," Treasury said in a fact sheet.
"These penalties will not affect entities that act honestly and with reasonable care.
"However, entities that seek to abuse the scheme, especially those that seek to engage in fraud, will face penalties commensurate with the seriousness of their conduct."
Also read: Fine print: Essential opt-in step to receiving JobKeeper payment
Also read: JobKeeper: ATO warns employers to 'take steps now' to avoid missing out
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