Accounting for Federal Budget economic recovery stimulus measures – JobMaker Hiring Credit


This article was originally drafted based on information available at 11 November 2020, including the Government’s Fact Sheet and Exposure Draft of legislation to support this scheme, as well as in the Explanatory material. It has been updated in December 2020 to reflect the Final rules for determining eligibility and the amount of the JobMaker payment included in the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 9) 2020.

The 6 October 2020 Federal Budget plots out the Government’s road to economic recovery and includes several new or amended stimulus measures including:

  • JobMaker Hiring Credits
  • Apprenticeship wage subsidy
  • Full write-off of capital assets
  • Loss carry-back for companies
  • Research and development tax incentives
  • Export market development grants (EMDG Scheme)

Please refer to BDO’s 2020 Federal Budget Report for more information on these measures.

Given that legislation giving effect to JobMaker Hiring Credits was passed on 11 November 2020, this month we look at the accounting impacts for entities receiving JobMaker Hiring Credits.

What is the JobMaker Hiring Credits?

The Government has committed $4 billion over the next few years in the form of JobMaker Hiring Credits to be paid to eligible employers that create additional employment over the next 12 months (7 October 2020 to 6 October 2021) for eligible employees aged 16-35 years. The program is designed to encourage employers to hire young workers and move people from JobSeeker, Youth Allowance or Parenting Payment programs into stable employment. It is not available to the major banks and those businesses currently claiming JobKeeper.

How does it work?

Employers will be paid the following amounts from government for each additional job created for an ‘eligible additional employee’:

  • $200 for employees aged 16-29, and
  • $100 for employees aged 30-35.

The payments will be available for the first 12 months of a worker’s employment and will be capped at $10,400 for each additional position created (i.e. 52 weeks X $200 per week).  Because the scheme applies to new employees hired until 6 October 2021, employers could be receiving JobMaker credits up to 6 October 2022.

What is an ‘eligible additional employee’?

Eligible additional employees are those that fit into the above age categories who have worked, on average, at least 20 hours per week each quarter. They must also have received the JobSeeker Payment, Youth Allowance or Parenting Payment in at least one of the three months prior to their new employment.

Employer’s entitlement to receive JobMaker Hiring Credits

Employers are only entitled to receive JobMaker Hiring Credits if they meet all the conditions in sections 27 to 29 of the Final rules. In addition to various administrative-type criteria included in those sections, the following key conditions must be met in order to qualify:

  • The eligible additional employees for the period must have worked a minimum of 20 hours per week on average
  • There is a headcount increase, i.e. the total number of employees at the end of the last day of the claims period (quarter) exceeds the baseline headcount on reference date (30 September 20201), and
  • There is a payroll increase for the claims period (quarter) as compared to the equivalent period (quarter) ending 6 October 2020 (baseline payroll amount)2.


  1. This baseline amount increases during the second year of the program for the number of new jobs created in the first year of the program. This is to ensure that credits are received for only 12 months for each employee.
  2. The Final Rules prescribes more precisely how these two amounts are calculated.

Simple Example 1 – Employee headcount increase

Company A had five employees on their payroll on 30 September 2020.

As a result of government’s announcement of the JobMaker Hiring Credits, Company A employs two additional employees (aged 18) on 7 October 2020 who each work more than 20 hours per week. These new employees were previously claiming JobSeeker.

Company A therefore meets the criteria for having increased employee headcount because in total it now has seven employees as compared to five on 30 September 2020.

Simple Example 2 – Increase in payroll

Company A’s payroll for the three months ended 6 October 2020 was $100,000 and the baseline headcount was five employees.

The two additional employees each earned $6,000 for the period from 7 October 2020 to 6 January 2021. Total payroll therefore increased to $112,000 from the baseline payroll amount of $100,000.

As there is an increase in payroll cost of $12,000, as well as the total employee headcount, Company A is eligible to receive the JobMaker Hiring Credits of $200 per week for each new employee.

It should be noted that determining whether there has been an increase in employee headcount and payroll can be complicated. For further information and examples, please contact your BDO tax advisor or refer to the Final rules.

When do employers receive these credits?

Additional jobs created from 7 October 2020 will be eligible for the program, however employers will be required to make claims for the JobMaker Hiring Credits from the Australian Tax Office (ATO), in arrears, from February 2021 as follows:

  • First quarter will be claimed in February 2021,
  • Second quarter  will be claimed in April 2021,
  • Etc.

Employers will therefore be required to pay employees before they receive payment from the ATO. Employers will need to notify the Commissioner of Taxation of their intention to participate in the JobMaker scheme before the end of each quarter (JobMaker period) in order to be eligible for the scheme.

Is there a limit on the JobMaker Hiring Credit?

Yes. If the JobMaker Hiring Credit works out to be greater than the payroll increase for the period, the refund will be limited to the amount of the increased payroll. In Simple Example 2 above, the increased payroll was $12,000 for the first quarter and the JobMaker Hiring Credit was calculated as $5,257 ($200/7 days x 92 days x 2 employees), so the whole $5,257 would be received. However, had the increase in payroll only been $4,000 for the quarter, the JobMaker Hiring Credit would be limited to $4,000, even though the calculated amount is $5,257.

In addition, there are further limits to the JobMaker claim if the ‘total counted days for the period’ used to calculate the claim (i.e. days worked by eligible additional employees) is greater than the maximum number of days allowed (i.e. total headcount increase X number of days in the claim period), then there is a complicated process which reduces the overall claim. This could occur when eligible employees leave before the end of the claim period. Please refer to section 34(2) the Final rules for more information.

Accounting for JobMaker hiring credits by FOR-PROFIT ENTITIES

For-profit entities will account for JobMaker Hiring Credits as government grants under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance because:

  1. It transfers resources to the entity in the form of a cash rebate
  2. In order to receive the rebate, the entity must comply with certain conditions, including that it is an eligible employer creating jobs for eligible employees working on average 20 hours per week for each quarter (claim period), and
  3. The conditions in 2. above relates directly to the operating activities of the entity, i.e. the employees must be employed in the entity’s business for each quarter.

Features of a government grant

Income for the JobMaker government grant is only recognised when there is reasonable assurance that the entity will comply with the conditions relating to the grant, and that the grant will be received (AASB 120, paragraph 7).

Government grants, including non-monetary grants at fair value, shall not be recognised until there is reasonable assurance that: 

(a) the entity will comply with the conditions attaching to them; and
(b) the grants will be received.

AASB 120, paragraph 7

Because the three key conditions noted above relating to the employer’s entitlement can only be tested at the end of each JobMaker claim period, we expect that in many cases it would be unlikely for employers to have ‘reasonable assurance’ on a reporting date prior to the end of the claim period.

For example, an employer with a 31 January year-end would not have ‘reasonable assurance’ of receiving JobMaker for the claims quarter ending 6 April, despite having taken on additional employees and incurred additional payroll expense. This is because:

  • The employee could leave or have their employment terminated prior to the end of the claim period, and/or
  • Casual employees in particular may not reach the average 20-hour minimum work requirement.

However, for entities reporting at 31 December 2020, employers may be able to assert that they have ‘reasonable assurance’ because the reporting date is so close to the end of the claim period. Judgement is required based on specific facts and circumstances.


Assuming the facts in Simple Examples 1 and 2 above, Company A would meet the criteria for claiming JobMaker Hiring Credits on 6 January 2021 because:

  • The two additional employees worked a minimum of 20 hours per week on average (i.e. they were employed on a permanent part-time basis for three days a week)
  • There is an increase in total employee headcount in that it now has seven employees compared to the baseline number of five at 30 September 2020, and
  • There is an increase in total payroll cost of $12,000 compared to the September 2020 quarter.

Assuming Company A’s year-end is 31 December 2020, based on facts and circumstances, it determines that it has reasonable assurance on 31 December 2020 that the criteria in IAS 20, paragraph 7 will be met. If Company A pays employees monthly on the last calendar day of each month, on 31 December 2020 it therefore recognises the following journal entry:

Dr      Receivable for JobMaker Hiring Credits                 $4,914
Cr      Government grant income                                                $4,914

$200 per week/7 days X 86 days in payroll period X 2 employees

Presentation in the financial statements of JobMaker hiring credit income

Employers need to consider their existing accounting policies for presentation of government grant income in the financial statements because the presentation of JobMaker grant income should be consistent with that policy.

If the employer does not have an accounting policy because they receive no grant income, AASB 120, paragraph 29 provides a choice of presenting the receipt of the government grant income in the financial statements either on a ‘gross’ or ‘net’ basis.  Therefore, either of the following presentation formats are acceptable, although in our view, the ‘gross’ presentation format provides more useful and relevant information for users:

Gross basis


Other income - Government grants

$200/7 days X 86 days X 2 employees


Salaries expense

$6,000 /92 days X 86 days X 2 employees


Net profit



Net basis


Salaries expense ($11,217-$4,914)


Net profit


Grants related to income are presented as part of profit or loss, either separately or under a general heading such as ‘Other income’; alternatively, they are deducted in reporting the related expense.

AASB 120, paragraph 29

Accounting for JobMaker hiring credits by NOT-FOR-PROFIT ENTITIES (NFPS)

AASB 120 does not apply to NFPs. JobMaker government grants are therefore accounted for under the not-for-profit Accounting Standard AASB 1058 Income of Not-for-Profit Entities. As the JobMaker scheme does not contain sufficiently specific performance obligations, AASB 15 Revenue from Contracts with Customers does not apply, and income would be recognised in profit or loss (AASB 1058, paragraph 10). The continued employment of additional staff is an internal activity and does not represent the transfer of goods or services to a customer, i.e. no sufficiently specific performance obligations.

When should JobMaker grant income be recognised?

While AASB 120, paragraph 7 requires ‘reasonable assurance’ in order for the grant income to be recognised as a receivable, AASB 1058 does not specify when the receivable would be recognised. AASB 1058, paragraph 8 merely cross-references to various Accounting Standards to deal with the ‘asset’ side of the transaction, including timing of recognition.

The ‘receivable’ for JobMaker does not meet the definition of a financial instrument in AASB 132 Financial Instruments: Presentation, paragraph AG12 because it arises from statute rather than a contract. However, AASB 9 Financial Instruments, paragraph Aus2.1.1 states that NFPs would nevertheless apply the recognition and measurement requirements of AASB 9 to non-contractual receivables arising from statutory requirements as if those receivables are financial instruments.

Notwithstanding paragraph 2.1, in respect of not-for-profit entities, the initial recognition and measurement requirements of this Standard apply to non-contractual receivables arising from statutory requirements as if those receivables are financial instruments.

AASB 9, Aus2.1.1

AASB 9, Appendix C (applying to NFPs) further notes that:

  • The nature of statutory receivables is in substance similar to a contractual receivable because the statutory requirements also provide an entity with the right to receive cash or another financial asset (Paragraph C4), and
  • An entity recognises and measures a statutory receivable as if it were a financial asset when statutory requirements establish a right for the entity to receive cash or another financial assetSuch a right arises on the occurrence of a past event (paragraph C5).

In the case of JobMaker, NFPs have a right to receive the JobMaker payments on the occurrence of a past event, being that their eligibility for the scheme has been confirmed, the relevant employee salaries have been paid, and the three key conditions noted above have been met at the end of the relevant JobMaker claim period. That is, NFPs will generally need to wait until the end of each JobMaker claims period to recognise the grant income.

Financial assets include contractual rights to receive cash or another financial asset from another entity. However, in a not-for-profit context, a receivable may arise from statutory requirements rather than through a contract (for example, rates, taxes and fines). The nature of such a receivable arising from statutory requirements is, in substance, similar to a contractual receivable, as the statutory requirements also provide an entity with a right to receive cash or another financial asset from another entity.

AASB 9, Appendix C4

Accordingly, an entity recognises and measures a statutory receivable as if it were a financial asset when statutory requirements establish a right for the entity to receive cash or another financial asset.  Such a right arises on the occurrence of a past event.

AASB 9, Appendix C5

Presentation in the financial statements

AASB 1058 does not provide a choice to offset the government grant against the salary expense. They payment is therefore presented as Other Income.

This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such. The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read. The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances.

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