JobKeeper Payment for Sole Traders

Maintaining your income.

The government is providing a JobKeeper payment of $1500 per eligible employee, per fortnight to eligible sole traders for up to 6 months. The aim is to support sole traders to maintain their income and relationship with their employees. A sole trader may be eligible if their turnover has reduced due to the impact of the COVID-19 outbreak.

The government has announced a new stimulus package that aims to keep people in their jobs. The JobKeeper payment will support businesses significantly impacted by the Coronavirus pandemic by subsidising employee wages for up to 6 months. Employers will receive $1500 a fortnight per eligible employee with the mandate that is payment is passed on in full to the employee. The payment is also open to sole traders who meet the eligibility requirements.

What is a sole trader?

A sole trader is where the owner is solely and legally responsible for all aspects of the business including decisions and any debts or losses. A sole trader may or may not have any employees.

Sole traders may also be eligible for the JobKeeper Payment if their turnover has been adversely affected by the COVID-19 outbreak.

Once registered, the Government will provide $1500 per fortnight per eligible employee for a maximum of 6 months. This will support sole traders to maintain their income and connection with employees. The Government is also temporarily expanding the eligibility criteria for the JobSeeker Payment to support sole traders if their income is negatively affected by the economic impact of the Coronavirus.

If you receive the JobKeeper Payment as a non-employing sole trader, this may affect your eligibility for payments from Services Australia as you must report your JobKeeper Payment as income.

Sole Traders & Employees that are eligible for the JobKeeper Payment

Sole traders (including those who are self-employed or have employees) will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month), or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).

Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered.

Sole traders must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Eligible sole traders with employees will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that sole trader – including part-time and stood down employees.

To be eligible, the employee must be an Australian citizen, or the holder of a visa that would allow them to be eligible for the JobSeeker Payment, or a Special Category (Subclass 444) visa holder. Casual employees are not eligible for the JobKeeper Payment, except those employees who had been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020. 

Eligible sole traders with employees who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible. 

In circumstances where an employee is accessing support though Services Australia because they have been stood down or had their hours reduced and the employee will be eligible for the JobKeeper Payment, the employee should advise Services Australia of their change in circumstances online at my.gov.au or by telephone.  

Where employees have multiple employers – only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobKeeper Payment on their behalf. The claiming of the tax free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer. 

Payment Process of the Sole Trader JobKeeper Payment

Eligible sole traders will be paid $1,500 per fortnight per eligible employee (which may include the individual themselves if they are self-employed). Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.  Where sole traders participate in the scheme, either they or their employees will receive this Payment in a number of different ways.

  • If the employee ordinarily receives $1,500 or more in income per fortnight before tax, the employee will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist the sole trader to continue operating by subsidising part or all of the income for themselves or for their employee(s).
  • If the employee ordinarily receives less than $1,500 in income per fortnight before tax, the sole trader must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee has been stood down, the sole trader must pay the employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee was employed on 1 March 2020, subsequently ceased employment with the sole trader, and then has been re-engaged by the same eligible sole trader, the employee will receive, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Payments will be made to the sole trader monthly in arrears by the ATO.

The Timing of the JobKeeper Payment

The subsidy will start on 30 March 2020, with the first payments to be received by sole traders in the first week of May. Sole traders will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website. The Australian Commissioner of Taxation has extended the time to enrol for the initial JobKeeper periods, from 30 April 2020 until 31 May 2020.

How to Apply for the JobKeeper Payment

You can register your interest in applying for JobKeeper Payment via the ATO from 30 March 2020.

Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.

People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments.

Links to further information

FAQs

The JobKeeper payment is a subsidy provided to employers to continue to pay their employees. Each eligible business will receive $1500 per fortnight, per eligible employee for up to 6 months. This payment must be passed on in full.

A sole trader is a business structure where the individual owner is legally responsible for all aspects of the business including any debts and losses and day-to-day business decisions. A sole trader may or may not employ other people in their business.

Sole traders may be eligible to receive the JobKeeper Payment if their turnover has reduced. Following registration by the eligible business, the Government will provide $1,500 per fortnight per eligible employee for a maximum of 6 months. This will support sole traders to maintain their income and connection with employees. 

Sole traders (including those who are self-employed or have employees) will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month), or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).

Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered.

Sole traders must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

To be eligible, the employee must be an Australian citizen, or the holder of a visa that would allow them to be eligible for the JobSeeker Payment, or a Special Category (Subclass 444) visa holder. Casual employees are not eligible for the JobKeeper Payment, except those employees who had been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020. 

Eligible sole traders with employees who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

Initially, employers and those who are self-employed can register their interest in applying for the JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020.

Subsequently, eligible employers/self-employed will be able to apply for the scheme by means of an online application.

Eligible sole traders will be paid $1,500 per fortnight per eligible employee (which may include the individual themselves if they are self-employed). Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.  Where sole traders participate in the scheme, either they or their employees will receive this Payment in a number of different ways.

  • If the employee ordinarily receives $1,500 or more in income per fortnight before tax, the employee will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist the sole trader to continue operating by subsidising part or all of the income for themselves or for their employee(s).
  • If the employee ordinarily receives less than $1,500 in income per fortnight before tax, the sole trader must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee has been stood down, the sole trader must pay the employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee was employed on 1 March 2020, subsequently ceased employment with the sole trader, and then has been re-engaged by the same eligible sole trader, the employee will receive, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Payments will be made to the sole trader monthly in arrears by the ATO.

The subsidy will start on 30 March 2020, with the first payments to be received by sole traders in the first week of May. Sole traders will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.

JobKeeper Payment for Sole Traders - Frequently Asked Questions(FAQ)

What is the JobKeeper payment?

The JobKeeper payment is a subsidy provided to employers to continue to pay their employees. Each eligible business will receive $1500 per fortnight, per eligible employee for up to 6 months. This payment must be passed on in full.

What is a sole trader?

A sole trader is a business structure where the individual owner is legally responsible for all aspects of the business including any debts and losses and day-to-day business decisions. A sole trader may or may not employ other people in their business.

Are Sole Traders eligible for the JobKeeper Payment?

Sole traders may be eligible to receive the JobKeeper Payment if their turnover has reduced. Following registration by the eligible business, the Government will provide $1,500 per fortnight per eligible employee for a maximum of 6 months. This will support sole traders to maintain their income and connection with employees. 

Who is eligible for the JobKeeper Sole Trader payment?

Sole traders (including those who are self-employed or have employees) will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month), or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).

Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered.

Sole traders must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

To be eligible, the employee must be an Australian citizen, or the holder of a visa that would allow them to be eligible for the JobSeeker Payment, or a Special Category (Subclass 444) visa holder. Casual employees are not eligible for the JobKeeper Payment, except those employees who had been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020. 

Eligible sole traders with employees who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

How do I apply for the JobKeeper Sole Trader payment?

Initially, employers and those who are self-employed can register their interest in applying for the JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020.

Subsequently, eligible employers/self-employed will be able to apply for the scheme by means of an online application.

How will payments for the JobKeeper be processed?

Eligible sole traders will be paid $1,500 per fortnight per eligible employee (which may include the individual themselves if they are self-employed). Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.  Where sole traders participate in the scheme, either they or their employees will receive this Payment in a number of different ways.

  • If the employee ordinarily receives $1,500 or more in income per fortnight before tax, the employee will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist the sole trader to continue operating by subsidising part or all of the income for themselves or for their employee(s).
  • If the employee ordinarily receives less than $1,500 in income per fortnight before tax, the sole trader must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee has been stood down, the sole trader must pay the employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee was employed on 1 March 2020, subsequently ceased employment with the sole trader, and then has been re-engaged by the same eligible sole trader, the employee will receive, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Payments will be made to the sole trader monthly in arrears by the ATO.

When does the JobKeeper Payment start?

The subsidy will start on 30 March 2020, with the first payments to be received by sole traders in the first week of May. Sole traders will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.

Supported by

Join for updates