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ATO Publishes Guidance on the Treatment of JobKeeper Voluntary Repayments — Orbitax Tax News & Alerts

The Australian Taxation Office (ATO) has issued guidance regarding the voluntary repayment of payments received under the JobKeeper payment scheme, which was introduced in 2020 to support businesses significantly affected by the COVID-19 pandemic.

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JobKeeper voluntary repayments

Eligible businesses that received JobKeeper payments do not need to repay those amounts. However, some businesses may choose to voluntarily repay an amount. This amount can be equivalent to some or all the JobKeeper payments received from us.

Voluntary repayments do not reduce the amount of JobKeeper a business received. These payments must be included in a business's assessable income.

Tax consequences

All JobKeeper payments that an eligible business received are assessable income.

A voluntary repayment of JobKeeper may be deductible only in limited circumstances and only if the voluntary payment is clearly appropriate to achieve, or directed at achieving, the business objectives of the business.

For example, a deduction may be available if the payment is made to:

  • prevent reduction in business, or
  • publicise and promote your business in the short-term.

Provided you treated your original JobKeeper payments correctly as assessable income, if you then act in good faith and use your best endeavours to determine whether you are entitled to a deduction for the voluntary repayment, we will generally not apply compliance resources to confirm if the payment is deductible.

Businesses must claim the voluntary repayment deduction in the same income year in which the repayment was made.

Businesses that are unable to claim a deduction may still wish to make a voluntary repayment. A voluntary repayment equal to the JobKeeper received less the tax paid on that amount will ensure a tax neutral outcome overall.

See also:

How to make a voluntary repayment

Business can choose to make a voluntary repayment to us. You must contact us before making a voluntary repayment.

Voluntary repayments:

  • are treated differently to other payment types made to us
  • cannot be made through usual ATO payment channels
  • require a special Payment Reference Number (PRN).

If you have considered your circumstances and have decided to make a voluntary repayment to us of an amount equivalent to all or part of the JobKeeper payments you have received, you can contact us by: