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A new Federal Government wage credit for up to $200 a week per employee has recently been legislated. This program supports a business which hires a young person, aged 16 to 35 years old, who is currently receiving JobSeeker payments, or other eligible pertinent payments. The JobMaker Hiring Credit is a key part of the Government’s JobMaker Plan to boost Australia’s economic recovery.

Jobmaker hiring credit eligibility

The JobMaker Hiring Credit will be:

  • $200 per week for each eligible employee aged 16 to 29;
  • $100 per week for each eligible employee aged 30 to 35; and
  • Paid for up to 12 months from the date the new position is created (see more information below).
  • Claimed quarterly in arrears by the employer from the ATO from 01 February 2021. Employers will need to report quarterly that they meet the eligibility criteria.

What are the JobMaker eligibility criteria?

The Employee must:

Jobmaker employee eligibility criteria

  • be aged either:
    – 16 to 29 years old, to attract the payment of $200 per week; or
    – 30 to 35 years old to attract the payment of $100 per week at the time their employment started;
  • have received JobSeeker, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring, but must not be receiving other wage subsidies such as apprenticeship funding;
  • have worked an average of at least 20 hours per week over the quarter to qualify for the payment;
  • commenced their employment between 7 October 2020 and 6 October 2021;
  • be in their first year of employment with this employer, reflecting that the hiring credit is only available for 12 months for each additional job; and
  • be employed for the period that the employer is claiming for them and employees may be employed on a permanent, casual or fixed-term basis.

The Employer must:

  • Jobmaker employer eligibilityhold an Australian Business Number (ABN)
  • be up-to-date with their tax lodgement obligations
  • be registered for Pay As You Go (PAYG) withholding
  • use Single touch payroll (STP) for reporting
  • have an increased total employee headcount from 30 September 2020 to prove a new/additional job was created in the business; and
  • the payroll of the business must be greater in the reporting period compared with the three months to 30 September 2020.

Employers do not need to satisfy a fall in turnover test.

Employers can claim the JobMaker hiring credit quarterly in arrears from 1 February 2021, by reporting to the Australian Taxation Office that they are eligible every quarter.

An employer needs to create a new or additional job and so can not lay off a full-time worker and hire two part-time workers on lower wages to claim credits because, although their headcount has increased, their payroll has not.

The amount of the hiring credit claim cannot exceed the amount of the increase in payroll for the reporting period. The baseline of 30 September 2020 will be adjusted in the second year of the program.

This will help the youth unemployment which is now sitting at 14.3% being more than double the general rate of unemployment (6.8%). Interestingly, young people suffered the biggest spike in unemployment during the global financial crisis. Even before the Covid-19 recession, young people were more than twice as likely to be unemployed.

Please find the government’s factsheet here for more information.

Investing in education, skills and apprenticeships

Jobmaker apprenticeshipsThe Government is making skills development a high priority as part of its JobMaker Plan. This commitment will support getting people into jobs. It also aims to ensure that Australians have the right skills for the jobs of the future.

  • JobTrainer – growing Australia’s workforce: see our newsletter here.
  • New apprenticeships to help the recovery
  • Support for job seekers
  • More job-ready graduates
  • Short courses to re-skill and up-skill Australians

If you had missed them we have also brought out other budget newsletters, which can be found here.

For more information, we have an FAQ here.

AAG AustAsia

AAG AustAsia

AAG is a family-owned group providing Tax planning, management accounting, wealth management, and more. Established in 1979, AAG acts entirely in their clients' best interest by providing financial expertise and upholds a reputation of nurturing long-lasting relationships with clients to assist them with all their personal and business financial issues.