There are a number of elements to consider here – so I have listed basic rules at the top and more detail for the bold terms down the page.
- Your business turnover is less than a $1 billion per annum and you EXPECT that your turnover will drop by 30% or more.
- Your business cannot be in liquidation or bankruptcy, nor can your business be subject to the Major Bank Levy.
- All businesses and not-for-profits will be eligible with the exception of the entities listed below.
- Australian Federal/State and Foreign Governments and their agencies or any corporation that they wholly own
- Local Council Governments or any corporation that they wholly own.
Business Turnover: What do they mean?
Turnover in simple terms is the total of all the sales you have made in a 12 month financial year. Eg: Sales between 1st July 2018 to 30th June 2019. It does NOT include international sales at all. There are additional (but not yet specified rules for GST groups)
The turnover has an additional important element to consider for the job keeper grant. That is – it is based on the turnover reported on the BAS (if you are registered for BAS).
Now what makes this important to understand is that you can be registered two different ways for BAS.
a) Cash basis. In this case turnover is the total of the money that clients have actually PAID you. You do not include work that is done and billed out to the clients UNLESS they have also paid you within the date range.
b) Accrual basis. This means that when a client pays you is not relevant. If you have billed the money out – then you report it on the BAS.
The takeaway from this is that the turnover being used as a basis for Job keeper is effectively the total of all the G1: sales reported on your BAS’s for a financial year.
How does the Government judge my income having dropped by 30% or more?
This is probably your simplest rule of thumb:
The 30% drop is in comparison with the same period for the prior year. For example – the sales noted on your March BAS in 2020 compared to the sales noted on your 2019 March BAS.
Clearly this will not work for everyone – for instance if you had scaled up your production since the prior year it would be easy to have a significant drop in sales but still make more than a year ago. The commissioner has discretion to consider additional information regarding this and make an appropriate decision.
There is also mention of alternative tests being made available for ‘lumpy income’ but these are not known right now.
There are choices for date ranges when you are working out your turnover drop – you can compare either:
- GST Turnover for March 2020 with GST turnover for March 2019
- Projected GST turnover for April 2020 with GST turnover for April 2019
- Projected GST turnover for the QUARTER staring April 2020 with the GST turnover for the QUARTER starting April 2019.
It does not matter if you lodge a Monthly or a Quarterly BAS – as the turnover test will be coming in later days will accommodate for this – but it will be important to ensure you have good records showing how you came by your calculations.
If you work out that you qualifiy for the Job Keeper payments for the first fortnight because your turnover has declined by the relevant amount you remain eligible and do not need to keep testing turnover in following months. You will however have ongoing monthly reporting requirements.