Why you may miss out on the JobMaker Hiring Credit

Let’s assume you employ a new 26 year old eligible employee for the full 13 weeks of a JobMaker period. In theory you are entitled to a JobMaker Hiring Credit of $2,600, being 13 x $200.

But I would not bank on actually receiving this cash when you first employ this person.

Why?

You may fail one of the rules due to factors outside the businesses control.

Rule 1 – there needs to be an increase in headcount

Let’s take Small Business Pty Ltd with 4 staff at the end of the last quarter. 1 senior person managing the team on $2,000 a week and 3 operational staff at $1,000 a week. Their payroll bill for the last quarter was $65,000.

Small Business Pty Ltd employs a new 26 year old eligible employee for the full 13 week JobMaker period and in theory they are entitled to a JobMaker Hiring Credit of $2,600.

But one week before the end of the current JobMaker period, one of the operational staff quits and is not replaced till the next quarter.

In this case, no increase in headcount, no JobMaker Hiring Credit of $2,600.

Rule 2 – there needs to be an increase in payroll costs

Let’s use the same example of Small Business Pty Ltd, but this time the manager leaves during the quarter, and whilst they were replaced by the end of the quarter there was a period of reduced wages till the replacement started. The business meets the additional headcount rule.

But if the wages were $65,000 or lower, the business failed the payroll test and the business gets no JobMaker Hiring Credit.

If the wages were between $65,000 and $67,599 the business will only get the difference between the actual wages and $65,000. For example, if the wages bill was $66,000, the JobMaker Hiring Credit paid to the business would be $1,000.

In both cases, changes in staffing from factors outside the control of the business meant the business may miss out on the full $2,600 JobMaker Hiring Credit.

And that’s why I would not count on this money till I see it in the bank.

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Contact Wayne Wanders for to see if you can access the Safe Harbour Laws

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