The JobKeeper payment is a reimbursement from the ATO for wages that you’ve paid in the month previous.
The first JobKeeper fortnight commenced on Monday, 30th of March 2020 and ended on Sunday, 12th of April 2020. You need to keep in mind to make the minimum payment of $1,500 per fortnight to each eligible employee to be able to receive the JobKeeper payment from the ATO.
Now, there’s also another rule which says, “As an employer, you can’t just pick and choose which eligible employees receive this benefit.”
Let’s say you’ve got eight eligible employees. You can’t say, “I’m going to pay four employees and the other four I don’t.” Unfortunately, there’s this rule that says, “One in, all in,” which means you need to make sure you pay all eight if you’ve got eight eligible employees.
Having to pay wages throughout the month to then get reimbursed the following month can certainly put a cashflow strain on the business. Unfortunately, there’s just no way around it. The government actually encourages business owners to speak with their banks. We’ve heard JobKeeper payments could be seen as collateral if you are doing some short-term finance such as an overdraft account.
So the answer to the question is, yes. You absolutely have to pay your employees first to then receive the reimbursement. That goes for the payments made in April to be reimbursed in May and every month through to September.
If you need help with JobKeeper book a strategy call with one of our accountants.
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