JobKeeper Payment for Self-Employed and Sole Traders

Lowe Lippmann Chartered Accountants

Special Topic: JOBKEEPER PAYMENT FOR SELF-EMPLOYED AND SOLE TRADERS

On Monday, the Federal Government announced details of the new JobKeeper Payments program, and sole traders and self-employed people will need to consider if they are eligible to access the wage subsidy program.

Sole traders and self-employed people are included in the group of eligible employers, and the available $1,500 per fortnight subsidy will start flowing to eligible employers and employees from the first week of May.

We have prepared the following Q&A to help explain the details which are currently available.

Are sole traders and self-employed people eligible for JobKeeper payments?

Yes. Sole traders that have seen the revenue from their business affected by COVID-19 are eligible to receive the JobKeeper payments .

What are the eligibility criteria?

Sole traders will be eligible for the JobKeeper Payments if their business has a turnover of less than $1 billion per annum, and turnover is expected to be reduced by more than 30% as a result of COVID-19, compared to "a comparable period a year ago, of at least a month".

For sole traders that have employees, payments will be available for each eligible employee that was on employed as at 1 March 2020 and continues to be "engaged" by the sole trader. Employees can include full time, part time, casual (if employed on a regular basis for at least 12 months) and stood-down employees.

To be eligible, employees must also be an Australian citizen, or they must hold a visa that would allow them to access other government payments (such as the JobSeeker payment).

How do I demonstrate that the turnover of my business has reduced by 30% (or 50%) relative to a comparable period (of at least one month) last year?

No definition of 'turnover' has been offered, but what is clear is that a business owner can self-assess that turnover has or will reduce by the necessary 30% (or 50% for large businesses) and that reduction needs to be assessed by reference to a comparable period from a year ago of at least a month.

The business owner will need to demonstrate in due course that the reduction in turnover has actually occurred, and we expect the ATO will verify the reduction in turnover figures.

What if an employee was first employed after 1 March 2020?

Information currently provided by the Government states that only employees employed as at 1 March 2020 are covered. Whether this will be expanded to include employees first employed after this date is not known.

What if I am a sole trader with no employees, can I still get the JobKeeper payment?

Yes, both sole traders who employ people, and those who do not, can access these payments.

Provided they met the eligibility criteria (see above), sole traders will receive $1,500 per fortnight (before tax), per eligible employee, which can also include themselves if they are self-employed.

The payments will be for a maximum of six months, running up to 30 September 2020. Sole traders will receive the first payments in the first week of May, with amounts backdated to 30 March 2020.

It is important to note that your business will need to fund the JobKeeper Payment scheme from your own cash reserves for the month of April 2020, until the first back-dated payment is received

Does the JobKeeper Payment include high income employees?

Yes. The JobKeeper Payment is payable to all employees, but the amount is set at $1,500 per fortnight per employee. Effectively, the JobKeeper Payment will cover the first $1500 of a high income employee's wages.

It is up to employers whether they top up the payment to cover all or a proportion of an employee's usual wage, subject to the existing employment obligations that apply (ie employers need to continue to comply with their obligations to employees under contracts, enterprise agreements, modern awards, etc, subject to the implementation of lawful measures such as stand down, etc).

What information do you need to provide to the ATO?

Sole traders and self-employed businesses will need to confirm their intention to participate in the JobKeeper Payment program by applying through the Australian Taxation Office website.

Business owners will need to provide an ABN, nominate an individual to receive the subsidy payment, that individual's Tax File Number, and complete a declaration of the downturn in their recent business activity. Payments will then be made to the nominated individual's bank account.

Business owners will then be required to provide various information to the ATO each month, including the details of eligible employees "engaged" within the business and monthly financial information.

How will the JobKeeper Payment be received?

Sole traders and self-employed businesses will receive the JobKeeper Payments monthly, in arrears, directly from the ATO.

If the sole trader or the self-employed business is receiving JobKeeper Payments for eligible employees, they will then need to use the payments to pay their employees' wages.

The subsidy payment will be applied under the following scenarios (depending on the fortnightly salary of each employee), as follows:

For employees that were already receiving $1,500 per fortnight (before tax) from the employer then their income will not change;
For employees that have been receiving less than $1,500 per fortnight (before tax), the employer will need to top up the payment to the employee up to $1,500 (before tax);
For those employees earning more than $1,500 per fortnight (before tax), the employer can provide them with a top-up; and
Once receiving the JobKeeper Payment, the JobSeeker payment becomes redundant

Is the JobKeeper Payment itself subject to superannuation guarantee contributions?

While we have not yet seen the legislation giving effect to the JobKeeper Payments, the Government has said that "it will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment".

Superannuation is payable according to ordinary rules for payments to employees for ordinary time earnings (even if the funds for those payments are received by employers through the JobKeeper Payment scheme).

The following treatment may arise in these different circumstances:

For employees' whose usual wages are less than $1500 per fortnight (ie superannuation would be payable on the part of the $1500 payment necessary to cover the employee's wages, but not on any windfall balance).
For employees who have been stood down without pay (ie superannuation will not be payable on the $1,500 JobKeeper Payment paid to employees as it is not paid as ordinary time earnings for work that has been undertaken).

Can you still access other government payments, such as JobSeeker payment and rent assistance, if you receive the JobKeeper Payment?

The Government has temporarily expanded the eligibility criteria for the JobSeeker payment so that more sole traders can access those payments.

Accessing the JobKeeper Payment as a non-employing sole trader may change your eligibility for other government payments, such as the JobSeeker payment and rent assistance. Employees will need to report all income from the JobKeeper Payment to Centrelink.

What happens if a sole trader has already stood down employees because of COVID-19?

If you have stood down workers before the JobKeeper Payment was announced on 30 March 2020, and they worked for your business as of 1 March 2020, you will still be able to access the JobKeeper Payments for them. Provided you and the employees meet the other eligibility criteria (see above), the JobKeeper Payments should be passed on to them.

If eligible terminated employees are rehired, what happens with entitlements that were already paid out (i.e. redundancy pay, annual leave, long service leave, etc.)?

Based on the information available to date, employees will be entitled to retain severance payments they have received on termination, even if they are rehired. This will likely be treated in the same way as an ordinary re-employment scenario.

For most employees, their service with the employer will be deemed to be continuous if they are rehired (though the gap in service will probably not count as service). However, employees will not be entitled to 'double dip' on service related entitlements that they have been paid out (ie. employees paid redundancy payments will not be entitled to another redundancy payment with respect to that period of service).

The rules that apply will vary depending on the specific circumstances of each employee. We recommend that you seek specific professional advice if employee entitlements for rehired employees are not clear.

What if you operate your business through a partnership or a trust?

According to the Treasury announcement, Australian businesses that are structured as companies, partnerships, trusts and sole traders are all eligible for the JobKeeper Payment program. It is also available to not-for-profit entities and charities.

How do you register to receive the JobKeeper Payments?

You can register an expression of interest on the ATO website at www.ato.gov.au

The ATO has recommend that businesses do not need to call the tax office to register.

What other assistance is available to sole traders that are being affected by COVID-19?

Sole traders may also be able to access other financial assistance through the Government's previously announced stimulus packages, including access to JobSeeker payments, and the expansion of the instant asset write-off scheme (from $30,000 to $150,000 per asset).

Sole traders that have experienced a reduction in their income may also be able to access their superannuation early (up to $10,000 before 30 June 2020, and a further $10,000 after 1 July 2020). Also, sole traders are included in the list of eligible businesses for the Government's coronavirus SME guarantee scheme for loans (Govt. will provide a guarantee of 50% to SME lenders for new unsecured loans up to $250,000 to be used for working capital).

Please note: The proposed JobKeeper Payment is not yet law, and we are not aware of any clear guidance provided by Federal or State Governments (where appropriate) in relation to many of the issues raised above.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further

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FEDERAL BUDGET 2026-27

May 12, 2026

SUMMARY AND FULL COMMENTARY UPDATES

Practice Update – May 2026

May 4, 2026

Special Topic: Payday Super changes apply from 1 July 2026, act now to be prepared! The ATO has issued further guidance on Payday Super changes that apply from 1 July 2026. In particular, the ATO released a ‘Payday Super checklist for Employers’ ( click here ), which is a good summary of the tasks that should be completed before 1 July 2026, and now is the time to act. Understanding ‘qualifying earnings’ From 1 July 2026, employers will calculate super using ‘qualifying earnings’ ( QE ) instead of the current ‘ordinary time earnings’ ( OTE ). For many employers, the new concept of QE is broader than OTE, but it should not change the amount they need to pay for their employees. However, it may require updates to payroll software configuration and reporting. Employers should review and prepare to correctly map pay codes now to meet reporting obligations and ensure readiness when their updated payroll software is available. QE include the following payments: OTE (ie. payments for ordinary hours of work), including certain types of paid leave, allowances, bonuses and lump sum payments. There are no changes to what payments are considered OTE under Payday Super. For a full list of payments which are included within OTE – click here . All commissions paid to an employee. Salary sacrifice amounts that would qualify as QE had they not been sacrificed to superannuation. Earnings paid to workers who fall under the expanded definition of employee, including payments to independent contractors paid mainly for their labour. Some payments may fall into more than one category of QE, such as commissions, and those payments are covered only once to the extent of the overlap in categories. The total QE for a pay period is determined by aggregating all qualifying payments made to or for an employee on the relevant day, forming the basis for calculating superannuation guarantee ( SG ) contributions. Each payday, employers will need to report both year-to-date QE and superannuation liability for each employee through Single Touch Payroll ( STP ). Employers should confirm their updated payroll software has this reporting functionality built in. Understanding new timing requirements for super contributions From 1 July, employers are responsible for ensuring that super contributions reach super funds within 7 business days of the relevant payday , calculated on the QE amount. Super funds will have 3 business days (down from 20 days) to allocate or return contributions that cannot be allocated. There is currently no obligation for the Super fund to confirm that an employee contribution has been allocated successfully, however if 3 days have elapsed we can accept that the employee contribution has been processed correctly. A super payment only counts once it is received by the employee’s superannuation fund, not when it is submitted. Submitting on day seven may not allow enough time, and we note there is no extension for rejected payments - so employers must ensure there is enough time to correct any errors and for SG contributions to reach funds within the 7 business days. Understanding importance of testing payroll software before 1 July 2026 Prepare now, review your payroll system readiness, engage with payroll software providers and ensure the functionality for these new changes will be supported. It has been widely suggested that new payroll software functionality is tested and everything is running smoothly before 1 July. Note that super payments for pay cycles in July 2026 may be due before your final quarterly super payment is due on 28 July 2026 (ie. for the June 2026 quarter, being April to June). Contributions received on or before 28 July 2026 will reduce any super owing for the June 2026 quarter first . If there is any remainder, contributions will then be used under Payday Super. If you pay on time for the June 2026 quarter and Payday Super you do not risk incurring penalties. The ATO has provided an example of this issue ( click here ), and explains that if the employer pays the correct amount for the June 2026 quarterly payments and the first Payday Super payment (ie. for the first pay cycle in July, which could be weekly or fortnightly) is paid in full both contributions will be made on time. Understanding cash flow pressure Employers may have multiple super payments due during July 2026, including: super payments for each Payday (after 1 July 2026); plus the final quarterly super payment due 28 July, for June 2026 quarter (ie. April to June). Employers should review their expected pay cycles for July 2026 to understand the impacts of paying super each payday after 1 July 2026. Employers may consider setting aside additional funds to make sure they can meet their obligations. If cashflow permits, employers can pay the June 2026 quarter super on or before the first payday in July (ie. the first pay cycle in July, which could be weekly or fortnightly). If an employer can do this, your business will have: a more seamless changeover to the Payday Super system; and time to correct any rejected payments before the 28 July deadline. We recommend that all employers take actions as soon as possible to be best prepared for the Payday Super changes coming in from 1 July 2026. If you require assistance, please contact your Lowe Lippmann representative.

Practice Update – April 2026

April 12, 2026

Know when a new logbook is required Keeping a car logbook may be required to accurately calculate the business-use percentage of vehicle expenses (ie. fuel, registration, insurance and depreciation) for tax deductions. Taxpayers can keep the same logbook for their car for five years, but there are circumstances where they may need a new one during that period. Relying on a logbook that no longer represents a client's work-related travel may result in them claiming more, or less, than they are entitled to. A new logbook may be required when a taxpayer: moves to a new house or workplace — updating their residential or work address may then be necessary; or has changes to their pattern of use of the car for work purposes — checking that they are still doing the same role and routine may then be necessary. Taxpayers using the logbook method for two or more cars need to keep a logbook for each car and make sure they cover the same period. Clients who purchase a new car during the income year and want to continue relying on their previous car's logbook must make a nomination in writing. The nomination must be made before they lodge their tax return and state: they are replacing their original car with a new car; and the date that nomination takes effect. Taxpayers should remember that, if their employer provides them with a car or they salary sacrifice a car using a novated lease, they are not entitled to claim work-related car expenses using the logbook or cents per kilometre method, as they do not own the car. When claiming car expenses using the logbook method, taxpayers also need to keep various types of other records, including (among other things) odometer records for the start and end of the period they own the car, proof of purchase price, decline in value calculations, and fuel and oil receipts (or records of a reasonable estimate of these expenses based on odometer readings).