Is JobKeeper taxable?

The ATO confirms that JobKeeper is assessed as taxable income and for this reason needs to be included in a tax return.

Employees

The fortnightly JobKeeper Government payments to workers are treated just like regular wage income, and taxed as it is received.

The Australian Taxation Office said employees receiving JobKeeper as their full wage or partial wage did not need to do anything different at tax time as JobKeeper payments would be automatically included into their tax return by the end of July.

Sole traders

People who own their own business as a sole trader comprise about half of all JobKeeper recipients.

Sole traders will need to add what they have received from JobKeeper into the income of their business which won’t happen automatically. JobKeeper payments, need to be included as business income in an individual tax return.

Small business owners

Small businesses who employ staff who have received JobKeeper, will have taken out the taxable portion based on the staff member’s marginal tax rates, because JobKeeper payments to employees are treated the same way businesses normally treat salary and wages.

If you need help with JobKeeper payments, please give us a call on 1300 513332 or use our simple online enquiry form.

Date published 21 Jul 2021 | Last updated 22 Jul 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.