Pay & the JobKeeper scheme

Published 1 May 2020 | Updated 16 September 2020

Extension of JobKeeper provisions in the Fair Work Act

On 1 September 2020, the JobKeeper provisions in the Fair Work Act were extended with some changes.

We’ve added new information about:

We've also created a 10% decline in turnover template certificate for legacy employers, with other template documents being published soon. We encourage you to check back regularly for updates.

You can also subscribe to email updates and we’ll let you know when we’ve updated all of our information.

The JobKeeper scheme external-icon.png helps qualifying employers pay their eligible employees by subsidising their wages. Under the JobKeeper scheme, qualifying employers significantly affected by coronavirus can access an Australian Government subsidy so that they can keep paying their employees.

Employers who qualify for the scheme can claim a reimbursement of $1500 per fortnight for each eligible employee who was employed by their employer on 1 March or 1 July 2020.

This reimbursement is referred to on this page as a ‘JobKeeper payment’.

How an employee is paid under the JobKeeper scheme

Employers need to first pay their employees, then the ATO pays the JobKeeper payment to the employer monthly in arrears, as a reimbursement. The ATO administers the JobKeeper scheme – see their JobKeeper payment page external-icon.png for more information.

Employers must tell eligible employees if they intend to claim the JobKeeper payment on their behalf. An employer needs to qualify before they can access JobKeeper payments from the Australian Government. See the ATO’s website for information about qualifying employers external-icon.png.

Employers can’t ask their eligible employee to pay a fee or pay part of their wage (including in cash) to access the JobKeeper scheme.

JobKeeper payment: employees earn less than $1500

Qualifying employers who are receiving JobKeeper payments can’t pay their eligible employees less than an amount equal to the JobKeeper payment, which is $1500 (before tax) per fortnight.

If an employee earns less than the JobKeeper payment during a fortnight for the work they perform (including any payments for leave or public holidays), their employer still needs to pay them $1500 (before tax) for that fortnight. The employer can’t keep the difference.

For example, if an employee earns $25 an hour and works 40 hours in a fortnight, their pay would normally be $1000 (before tax). Even though this is less than the JobKeeper payment, the employer must still pay the full $1500 (before tax) to the employee.

If an employer pays an employee an amount less than the JobKeeper payment, the ATO will stop reimbursing JobKeeper payments to the employer.

JobKeeper payment: employees earn more than $1500

If an eligible employee earns more than the JobKeeper payment during a fortnight for the work they perform (including any payments for leave or public holidays), their employer needs to pay them the higher amount for that fortnight. The employer can’t pay just $1500 (before tax).

For example, if an employee normally works 76 hours a fortnight and is paid $1700 (before tax), and this hasn’t changed while the employer is receiving JobKeeper, they still need to be paid $1700 (before tax) for the hours they work.

Annual Wage Review 2020 and JobKeeper

On 19 June 2020, the Fair Work Commission announced a 1.75% increase to minimum wages following its Annual Wage Review. For information about how this increase interacts with JobKeeper, see How an employee is paid under the JobKeeper scheme on the JobKeeper wage subsidy page.

Overpayments & the JobKeeper scheme

If an employer mistakenly pays an employee under the JobKeeper scheme (for example, because they think they’re eligible for payments but they’re not), the usual rules about overpayments apply.

Under the Fair Work Act, employers can only deduct money from an employee’s pay to fix an overpayment in limited situations, for example if it’s allowed under an award, an agreement (and the employee agrees to it), legislation, or a court or Fair Work Commission order. Otherwise, employers and employees should agree on a repayment arrangement instead.

Employers can’t make employees pay money or give back their wages (sometimes known as ‘cashback’) if it’s unreasonable and the payment is for the benefit of the employer or someone related to them.

For more information about overpayments and how to fix them, see Deducting pay & overpayments.

Employees with multiple employers

Only one qualifying employer can receive JobKeeper payments on behalf of an eligible employee. If an employee has more than one employer, only their primary employer should access the JobKeeper payment on their behalf.

Payment during a JobKeeper enabling stand down direction

Temporary provisions have been added to the Fair Work Act which apply to employers who have qualified for the JobKeeper scheme and their eligible employees (Fair Work Act JobKeeper provisions). They started on 9 April 2020 and end on 28 September 2020.

The Fair Work Act JobKeeper provisions allow qualifying employers to give directions to reduce eligible employees’ hours of work (a ‘JobKeeper enabling stand down direction’), and directions to change employees’ duties and location of work in certain circumstances.

When an employee is subject to a JobKeeper enabling stand down direction (to work a reduced number of hours, including no hours), the employer must pay the employee the higher of:

  • an amount equal to the JobKeeper payment ($1500 per fortnight before tax), or
  • the employee’s usual pay for the work they perform (including any payments for leave or public holidays).

For more information:

Example: Hours reduced, JobKeeper payment is equal to or less than normal wage

Henry works for an electronics business that has suffered a major downturn following the coronavirus outbreak.

Henry’s employer qualifies for the JobKeeper scheme. His employer gives him a JobKeeper enabling stand down direction to reduce his ordinary working hours from 76 to 64 hours per fortnight.

Henry’s base pay rate is $30 per hour, which his employer can’t reduce. He now only works 64 hours a fortnight and his fortnightly pay has fallen from $2280 ($30 per hour multiplied by 76 hours worked in a fortnight) to $1920, before tax ($30 per hour multiplied by 64 hours worked in a fortnight).

Henry’s reduced fortnightly pay is still higher than the fortnightly JobKeeper payment of $1500 (before tax). This means his employer has to pay him $1920 per fortnight (before tax). Henry’s employer receives JobKeeper payments of $1500 each fortnight for Henry from the ATO, paid monthly in arrears.

6 weeks later, the business’s turnover has reduced further. Henry’s employer gives him a new JobKeeper enabling stand down direction, which reduces his ordinary working hours from 64 hours to 50 hours per fortnight.

Henry’s employer now must pay him $1500 per fortnight before tax ($30 per hour multiplied by 50 hours worked in a fortnight), which is an amount equal to the $1500 JobKeeper amount.

Secondary employment

An employee who has been given a JobKeeper enabling stand down direction can ask their employer for permission to take on another job. An employer must consider this request and can’t unreasonably refuse it.

An employee can receive income from a secondary (or non-primary) employer while their primary employer is receiving JobKeeper payments on their behalf. The secondary employer can’t claim a JobKeeper payment on the employee’s behalf, but this will not affect the JobKeeper payments the employee’s primary employer is receiving.

Example: Request for secondary employment

Gabriela is a part-time attendant at a local cinema, ABC Cinemas. ABC Cinemas has closed because of an enforceable government direction and doesn’t have any other work to offer Gabriela.

ABC Cinemas qualifies for the JobKeeper scheme and is entitled to JobKeeper payments for Gabriela. ABC Cinemas gives Gabriela a JobKeeper enabling stand down direction, telling her not to work for 2 months. They pay her $1500 each fortnight.

Gabriela asks ABC Cinemas for permission to work as a casual cleaner for another local business while she is stood down. ABC Cinemas needs to consider this request and can’t unreasonably refuse it.

ABC Cinemas gives Gabriela permission to work as a cleaner. ABC Cinemas needs to keep paying Gabriela $1500 each fortnight, even while she’s working as a cleaner.

Back to top

JobKeeper payment and interaction with other minimum entitlements

An employee’s usual terms and conditions of employment (for example under an award, enterprise agreement or employment contract) continue to apply. However, the JobKeeper enabling direction or agreement will apply instead if the direction or agreement is different to the employee's usual terms and conditions.

Any JobKeeper enabling directions or agreements made under the Fair Work Act JobKeeper provisions can’t reduce pay rates. An employee working reduced hours under a JobKeeper enabling stand down direction or different hours under an agreement still has to be paid any applicable penalty or overtime rates for any hours that attract those extra rates.

Any terms and conditions not related to the direction or agreement continue (such as sick and carer’s leave).

Use our Pay and Conditions Tool to calculate penalty and overtime rates under an award.

Read more about Stand down of employees and continuous service in our Library.

Example: JobKeeper payment and interaction with other minimum entitlements

Eleni owns a hairdressing salon. She employs Giorgos and Ava as full-time hairdressers under the Hair and Beauty Award. The salon qualifies for the JobKeeper scheme and is eligible to receive JobKeeper payments for Giorgos and Ava.

Eleni gives Giorgos and Ava a JobKeeper enabling stand down direction to reduce their hours of work. She tells:

  • Giorgos to work 20 hours on weekdays and 5 hours on Saturdays
  • Ava to work 20 hours on weekdays, 5 hours on Saturdays and 5 hours on Sundays.

Giorgos is a Level 3 hairdresser under the Award. He’s paid $25 per hour on weekdays and $35 per hour on Saturdays. While he’s working reduced hours, he’ll earn $1350 each fortnight at his usual pay rates.

This is lower than the amount of the JobKeeper payment, so Eleni needs to pay Giorgos $1500 each fortnight. Giorgos doesn’t need to work extra hours to be paid $1500.

Ava is a Level 5 hairdresser under the Award. Her pay rate is $30 per hour on weekdays, $40 per hour on Saturdays and $50 per hour on Sundays. While she’s working reduced hours, she’ll earn $2100 each fortnight at her usual pay rates.

Eleni needs to pay Ava the full $2100 because it is higher than the amount of the JobKeeper payment.

Example: How a direction affects minimum entitlements and conditions

Lemon Lights Pty Ltd designs lights for stadiums. They employ 4 full-time engineers to design their lights. The engineers are covered by the Professional Employees Award. They’re classified as L4 professionals and are paid $37.78 per hour. As full-time employees, they’re paid $2,871.28 per fortnight.

Lemon Lights has qualified for the JobKeeper scheme and is entitled to JobKeeper payments for the engineers.

Lemon Lights consults with the engineers and explains they can only be usefully employed for 45 hours per fortnight. Lemon Lights makes a written record of its consultation and gives each of them a written JobKeeper enabling stand down direction 4 days later. The direction confirms they’ll work on Mondays, Tuesdays and Fridays for the next 8 weeks, and they’ll be stood down for their remaining hours.

While the direction applies, it overrides their normal full-time hours. However, their other entitlements and conditions under the award still apply. They still need to be paid $37.78 per hour for the hours they work each fortnight.

This means their reduced fortnightly pay will be $1,701.10 (before tax) during the stand down. They’re still full-time employees and accrue leave at their full-time hours (as if the direction hadn’t been given).

Public holiday pay

If an employee has had their hours reduced because of a JobKeeper enabling stand down direction, they need to be paid the greater of $1500 (before tax) or their usual pay for work performed during the fortnight, including any payment for absence on a public holiday. This means that if the employee would normally have worked on the public holiday if the JobKeeper enabling stand down direction hadn’t been given, and would have been entitled to time off without loss of pay, this needs to be taken into account when calculating their usual pay for the fortnight.

The employee must be paid for their usual ordinary hours of work on the public holiday because a JobKeeper enabling stand down doesn’t apply when the employee is authorised to be absent from work.

Example: Public holiday during stand down

Shashi is a full-time employee who normally works Monday to Friday at Sheepish Shoes in Victoria, a business which is entitled to JobKeeper payments for Shashi.

Sheepish Shoes gives Shashi a JobKeeper enabling stand down direction that applies from 1 June 2020 to 15 June 2020.

Monday, 8 June 2020 is a public holiday in Victoria (Queen’s Birthday). If Shashi worked as normal, he’d be entitled to 7.5 hours off work (his normal hours on Mondays) without loss of pay.

As Shashi is entitled to be away from work on the public holiday, the JobKeeper enabling stand down direction doesn’t apply to him on this day. This means Sheepish Shoes has to pay Shashi at his base pay rate for 7.5 hours (his normal Monday hours).

When calculating how much it needs to pay Shashi for the fortnight, Sheepish Shoes needs to include the amount Shashi is entitled to be paid for the public holiday. They must pay Shashi either the JobKeeper payment amount or the amount they would normally pay Shashi for the public holiday, whichever is higher.

Sheepish Shoes needs to pay Shashi $1500 for this fortnight, because it’s higher than the amount Shashi would be paid for the public holiday.

Pay slips, record-keeping and paying wages

Pay slip and record-keeping obligations continue to apply for employers accessing the JobKeeper scheme. Find more information on our Pay slips and record-keeping page. Pay slips for a fortnight that the employee was paid the JobKeeper payment need to show any extra amount that the employer paid to make sure the employee received at least $1500 (the amount of the JobKeeper payment).

Employers also need to pay their employees wages in accordance with their usual requirements including frequency of pay. See Paying wages.

Tax and superannuation

The JobKeeper payment is a before tax payment (gross). For more information on tax and superannuation related to the scheme, go to the JobKeeper section on the ATO website external-icon.png.

Back to top

More information

JobKeeper scheme

For more information on the scheme, including how to register, go to the ATO website – JobKeeper section external-icon.png.

Pay and wages

Information, tools and resources:

Enforcement and dealing with disputes

We help employers and employees understand and follow Australian workplace laws. We do this by:

  • providing information and education
  • providing tools, templates and guides
  • helping you resolve workplace issues.

Our Resolving workplace issues during coronavirus page has information and resources to help you resolve workplace disputes. It also has information about our enforcement role under the JobKeeper scheme and who can help with:

  • questions about eligibility for the JobKeeper scheme
  • disputes about directions or requests under the JobKeeper scheme.

Back to top

Print to PDF