Fair Work Commission

What is the ‘10% decline in turnover test’ and what is a ‘10% decline in turnover certificate’?

10% decline in turnover test

An employer satisfies the ‘10% decline in turnover test’ for a designated quarter if the employer’s actual GST turnover for the previous quarter is at least 10% less than their actual GST turnover for the corresponding quarter in the previous year.^[1]

A quarter is the period of 3 months ending on 31 March, 30 June, 30 September or 31 December.^[2]

The ‘designated quarter’ for a direction or request made:

• before 28 October 2020—is the quarter ending on 30 June 2020,
• between 28 October 2020 and 27 February 2021 (inclusive)—is the quarter ending 30 September 2020, and
• on or after 28 February 2021—is the quarter ending 31 December 2020.

10% decline in turnover certificates

A ‘10% decline in turnover certificate’ must be issued by an ‘eligible financial service provider’ that is satisfied that the employer meets the 10% decline in turnover test for the designated quarter. An ‘eligible financial service provider’ is a registered tax agent or BAS agent, or a qualified accountant.^[3]

However, a 10% decline in turnover certificate cannot be issued by:

• a director or employee of the employer
• an associated entity of the employer, or
• a director or employee of an associated entity of the employer.^[4]

Small business employers (that have less than 15 employees) do not require a certificate from an eligible financial service provider. Instead, if the employer or  an individual who is authorised by the employer and has knowledge of the employer’s financial affairs makes a statutory declaration that says the employer satisfied the 10% decline in turnover test, this is taken to be a 10% decline in turnover certificate.^[5] A person must not knowingly make a false statement in such a statutory declaration. This is a civil remedy provision.^[6]