Pay & the JobKeeper scheme

Published 1 May 2020 | Updated 15 January 2021

The information on this page is for qualifying employers and their employees.

Qualifying employers are employers that qualify for the JobKeeper scheme and receive payments for their eligible employees.

Legacy employers no longer receive JobKeeper payments but may be able to use some of the JobKeeper provisions. Learn what applies for leave at Pay, leave and ending employment for legacy employers.

The JobKeeper scheme helps qualifying employers pay their eligible employees by subsidising their wages.

Employers who qualify for the scheme (qualifying employers) can claim a reimbursement for each eligible employee. The reimbursement is referred to on this page as a JobKeeper payment.

Find out the rules for how JobKeeper payments interact with other workplace entitlements.

How an employee is paid under the JobKeeper scheme

The information in this section is for qualifying employers and their eligible employees.

Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

Qualifying employers need to first pay their employees, then the Australian Tax Office (ATO) pays the applicable JobKeeper payment to the employer monthly in arrears, as a reimbursement.

An employer who is receiving JobKeeper payments for an employee needs to pay the employee at least the amount of the applicable JobKeeper payment, even if they earn less than this. This is known as the ‘wage condition’.

Satisfying the minimum payment guarantee

An employer who is receiving JobKeeper payments for an employee needs to pay the employee the higher of the following amounts, each fortnight:

  • the amount of the applicable JobKeeper payment, or
  • their pay for work performed that is required to be paid in the fortnight (including any paid leave or public holiday pay).

This is known as the ‘minimum payment guarantee’ under the JobKeeper provisions.

On 17 December 2020, the Full Federal Court of Australia handed down a decision relating to the minimum payment guarantee, after an appeal of the decision in Qantas Airways Limited v Flight Attendants’ Association of Australia (The JobKeeper Case) [2020] FCA 1365 external-icon.png.

We’ve updated this page to reflect the decision, although applications for special leave to appeal the decision have been made to the High Court of Australia. You may wish to seek your own advice on the implications of the decision. You can also find the decision online at Qantas Airways Limited v Flight Attendants’ Association of Australia [2020] FCAFC 227 external-icon.png.

To meet the minimum payment guarantee each fortnight, employers can only take into account amounts payable that are:

  • for work the employee performed (including any paid leave or public holiday pay), and
  • required to be paid in the fortnight (for example under the relevant award, agreement, employment contract, or other relevant instrument), whether or not the work was performed in that fortnight.

This means that where work is performed during a fortnight, but the employer isn’t obliged to pay the employee for it until a later fortnight (for example, because the employer pays wages or parts of wages in arrears), the employer can only count that amount towards the minimum payment guarantee for the fortnight in which it is required to be paid.

See JobKeeper key dates on the ATO website external-icon.png for details about JobKeeper fortnights.

Example: JobKeeper payments where employer pays employees in arrears

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 receives 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 10 hours per week, on weekdays
  • Ava to work 20 hours on weekdays and 5 hours on Saturdays, per week.

Eleni pays Giorgos and Ava in arrears each fortnight for work performed in the previous fortnight.

Giorgos is a Level 3 hairdresser under the Award. He’s paid $25 per hour on weekdays. While he’s working reduced hours, he’ll earn $500 (before tax) each fortnight at his usual pay rate.

Ava is a Level 5 hairdresser under the Award. She’s paid $30 per hour on weekdays and $40 per hour on Saturdays. While she’s working reduced hours, she’ll earn $1600 each fortnight at her usual pay rates.

To meet the minimum payment guarantee, Eleni needs to pay the following amounts to Giorgos and Ava in each fortnight.

Giorgos

JobKeeper fortnight Column A

Amount payable for work that is required to be paid in the current fortnight
Column B 

Total amount payable to Giorgos for the current fortnight (before tax)
Fortnight starting 4 January 2021 $500 ($25 per hour x 20 hours in the fortnight)

$650 (Tier 2 rate) JobKeeper payment, because the amount required to be paid in the current fortnight for the performance of work in the previous fortnight is less than the JobKeeper amount.

Total: $650

Fortnight starting 18 January 2021 $500 ($25 per hour x 20 hours in the fortnight)

$650 (Tier 2 rate) JobKeeper payment, because the amount required to be paid in the current fortnight for the performance of work in the previous fortnight is less than the JobKeeper amount.

Total: $650

Ava

JobKeeper fortnight Column A

Amount payable during current fortnight for work performed in previous fortnight (before tax)
Column B

Total amount payable to Ava for the current fortnight (before tax)
Fortnight starting 4 January 2021 $1,600

$1,600, because the amount required to be paid in the current fortnight for the performance of work in the previous fortnight is more than the JobKeeper amount.

Total: $1,600

Fortnight starting 18 January 2021 $1,600

$1,600, because the amount required to be paid in the current fortnight for the performance of work in the previous fortnight is more than the JobKeeper amount.

Total: $1,600

As set out in Column B, this table demonstrates that in each fortnight, Eleni needs to pay Giorgos and Ava whichever is higher out of:

  • their pay for work performed in the previous fortnight (which is required to be paid in the current fortnight) (Column A), or
  • the relevant JobKeeper amount for the current fortnight.

Eleni can then claim the relevant JobKeeper reimbursement from the ATO.

Whether Giorgos and Ava are entitled to the Tier 1 or Tier 2 rate is based on whether they meet the 80-hour threshold during a 28-day reference period. This is set out in the ATO’s criteria.

Find out about the different types of JobKeeper payments that apply to employees from 4 January 2021 at the ATO’s Payment rates external-icon.png page.

Find out about the different types of JobKeeper payments and what applies to different employees at Payment rates external-icon.png on the ATO website. 

Employees earning less than the applicable JobKeeper payment amount

To remain qualified to receive JobKeeper payments, qualifying employers can’t pay their eligible employees less than an amount equal to the applicable JobKeeper payment.

When an employee is entitled to be paid less than the applicable JobKeeper payment amount during a fortnight for the work they performed (including any payments for leave or public holidays), their employer still needs to pay them the full applicable JobKeeper payment for that fortnight. The employer can’t keep the difference. See the Giorgos example above.

From 28 September there are two JobKeeper payment rates – a tier 1 (higher) rate and a tier 2 (lower) rate. For more information visit Payment rates external-icon.png on the ATO website.

If an employer pays an employee an amount less than the applicable JobKeeper payment they’re receiving for the employee, the ATO will stop making JobKeeper payments to the employer. 

Employees earning more than the JobKeeper payment amount

When an eligible employee is entitled to be paid more than the amount of the applicable JobKeeper payment during a fortnight for the work they have performed (including any payments for leave or public holidays), their employer needs to pay them the higher amount for that fortnight. The employer can’t just pay the amount of the applicable JobKeeper payment. See the Ava example above.

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.

See Satisfying the minimum payment guarantee for details.

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 applicable JobKeeper payment on their behalf.

JobKeeper and the Annual Wage Review 2020

The Fair Work Commission announced a 1.75% increase to all award minimum wages in 2020. The start date of this increase is happening in 3 stages. Awards have been divided into 3 groups and the 1.75% wage increase starts on the first full pay period on or after:

  • 1 July 2020 for Group 1 awards
  • 1 November 2020 for Group 2 awards
  • 1 February 2021 for Group 3 awards.

A full list of the awards in each group is available at The Commission has announced a 1.75% increase to minimum wages. Most employees are covered by an award. If you're not sure which award applies, use Find my award. If you’re not covered by an award, the national minimum wage is $753.80 per week or $19.84 per hour (effective from the first full pay period on or after 1 July 2020).

Use our Pay and Conditions Tool to find out which pay rates apply now.

Interaction with the JobKeeper payment

When calculating the amount an employee in the JobKeeper scheme needs to be paid, the employee's usual pay for work performed in the fortnight could be affected by the minimum wage increase. Check which group your award is in at The Commission has announced a 1.75% increase to minimum wages.

You can find the new rates for Group 1 and 2 awards in our Pay and Conditions Tool. Updated information about Group 3 awards will be available before the new rates start. You can sign up for updates to receive an email reminder when the rates are available.

Other important information

Employers need to deduct tax from their employees’ pay.

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.

The ATO administers the JobKeeper scheme. Visit JobKeeper payment external-icon.png on the ATO website to learn more about:

  • the different types of JobKeeper payments
  • employer eligibility to the scheme
  • checking employee eligibility.

An employer needs to qualify before they can access JobKeeper payments from the Australian Government. Qualifying employers need to tell eligible employees if they intend to claim the JobKeeper payment on their behalf. For more information, see Information for qualifying employers external-icon.png on the ATO website.

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Overpayments, ‘cashback’ and the JobKeeper scheme

The information in this section is for qualifying employers and their eligible employees.

Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

If a qualifying employer mistakenly overpays an employee under the JobKeeper scheme, the usual rules about overpayments apply. An example of an overpayment includes when an employer pays an employee the amount of the applicable JobKeeper payment thinking the employee is eligible when they aren’t, and they don’t get the payment from the ATO.

Under the Fair Work Act, employers can only deduct money from an employee’s pay to fix an overpayment in limited situations. This includes if it’s allowed by:

  • an award or agreement (and the employee agrees to it)
  • legislation
  • a court order, or
  • a 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 a ‘cashback scheme’) if it’s unreasonable and the payment is for the benefit of the employer or someone related to them. This is unlawful.

Employers also can’t ask their employees to ‘earn back’ their JobKeeper payments by working for free or on reduced pay rates once JobKeeper ends or they stop being eligible or involved in the scheme.

See our Resolving workplace issues during coronavirus page for information and resources to help resolve workplace disputes and issues, including where and how to get assistance.

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

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Payment during a JobKeeper enabling stand down direction

The information in this section is for qualifying employers and their eligible employees.

Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

The temporary JobKeeper provisions in the Fair Work Act allow a qualifying employer to give directions to an eligible employee to:

  • reduce their hours of work (a JobKeeper enabling stand down direction)
  • change their duties or location of work.

Any JobKeeper enabling directions or agreements made under the JobKeeper provisions can’t reduce minimum pay rates. An employee working under these arrangements still needs to be paid based on their usual base hourly rate and any applicable penalty or overtime rates for any hours that attract those extra rates. If an employee has been directed to work different duties that attract a higher pay rate, the employee must be paid at that higher pay rate. 

When an employee of a qualifying employer has been asked to work fewer hours (or no hours) under the JobKeeper provisions, the employer has to pay the employee the higher of:

  • an amount equal to the applicable JobKeeper payment, or
  • the employee’s pay for the work they perform that is required to be paid in the fortnight (including any payments for leave or public holidays).

See Satisfying the minimum payment guarantee for details.

For more information on these provisions for qualifying employers and their employees:

For information about the different applicable JobKeeper payment amounts, visit Payment rates external-icon.png on the ATO website.

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JobKeeper payment and interaction with other minimum entitlements

The information in this section is for qualifying employers and their eligible employees.

Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

Under the JobKeeper scheme, an employee’s usual terms and conditions of employment continue to apply. This includes terms and conditions from:

  • an applicable award
  • applicable agreement, or
  • employment contract.

However, a JobKeeper enabling direction or agreement applies instead if the direction or agreement is different to the employee's usual terms and conditions.

Any terms and conditions of employment not related to the direction or agreement continue. For example, sick and carer’s leave, penalty and overtime rates.

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.

Public holidays

Public holiday pay needs to be included when calculating an employee’s usual pay if the employee:

  • would normally have worked on the public holiday if the JobKeeper enabling stand down direction hadn’t been given
  • would have been entitled to time off without loss of pay.

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Pay slips, record-keeping and paying wages

Pay slip and record-keeping obligations continue to apply for all employers accessing the JobKeeper scheme. 

Pay slips for a fortnight that the employee was paid the applicable JobKeeper payment need to show any extra amount that the employer paid to make sure the employee received at least the JobKeeper amount.

Find more information on employer obligations at Pay slips and record-keeping.

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 payments are a before tax amount (gross) payment. For more information on tax and superannuation related to the scheme, visit JobKeeper payment external-icon.png on the ATO website.

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More information

JobKeeper scheme

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

For information about the applicable JobKeeper payment amounts, visit Payment rates external-icon.png on the ATO website.

More information:

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
  • disputes related to requirements for legacy employers, including certificates.

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