How JobKeeper subsidy impacts Workcover and Payroll tax
With more than 750,000 businesses enrolling for the JobKeeper subsidy, its important that business owners understand how the subsidy will affect wages declarations for both WorkCover and payroll tax.
Workcover
The big question is will JobKeeper payments be considered declarable wages for Workcover purposes? Unfortunately the answer is not simple and you will need to consider each employee’s situation individually.
| Category | Example | JobKeeper Payment | Outcome |
|---|---|---|---|
| Employee stood down without pay | Employee does not receive pay | Employee is topped up $1,500 per fortnight | The $1,500 top up payment is not included as declarable wages |
| Employee earns a wage of more than $1,500 per fortnight | Employee earns $3,500 per fortnight | Employee receives $3,500 in wages Employer receives subsidy of $1,500 | $3,500 is required to be included as declarable wages |
| Employee earns $1,500 per fortnight | Employee earns $1,500 per fortnight | Employer pays employee wage of $1,500 Employer receives subsidy of $1,500 | $1,500 is required to be included as declarable wages |
| Employee earning a wage of less than $1,500 per fortnight | Employee earns $1,000 per fortnight | Employee earning a wage of less than $1,500 per fortnight Employee earns $1,000 per fortnight Employer pays employee wage of $1,000 and a top up of $500 $1,000 is required to be included as declarable wages. The $500 top up will not be included. | $1,000 is required to be included as declarable wages. The $500 top up will not be included. |
If you have an unusual situation outside of the examples above, we suggest visiting the WorkCover website https://www.worksafe.qld.gov.au/claims-and-return-to-work/novel-coronavirus-covid-19-faqs/employer-faqs/jobkeeper-payment-scheme
Payroll tax
The JobKeeper subsidy is not liable for Queensland payroll tax.
Examples
- Luke’s wages are $1,500 per fortnight and are fully subsided under the JobKeeper payment scheme. Luke does not include the $1,500 as wages for payroll tax purposes
- Angela’s wages are $3,500 per fortnight, of which $1,500 are subsided by JobKeeper. Angela must include $2,000 as wages for payroll tax purposes, but not the $1,500 JobKeeper subsidy.
Find out more about exempt wages for QLD payroll tax here https://www.business.qld.gov.au/running-business/employing/payroll-tax/exemptions/wages
The bottom line
It’s important to ensure that you are correctly calculating your declarable wages for both Workcover and Payroll tax to ensure that you are not paying more than you absolutely need to.
If you need assistance with your Workcover renewal or your payroll tax lodgements, reach out to us.