With the introduction of the JobKeeper legislation and the various ATO and Treasury Explanatory Memorandums and updates, it is timely to re-visit as an employer what you need to do from here for the JobKeeper scheme which runs from the 30 March 2020 to 27 September 2020.
Enrolment
- Review and ensure all eligible employees have been paid a minimum gross payment of $3,000 by the 8 May 2020 (extended date) covering the fortnightly pay periods 30-Mar-20 to 12-Ap-20 and 13-Apr-20 to 26-Apr-20. This is must be done to ensure your eligibility for the JobKeeper payment for each individual employee (One in – All in scheme).
- Ensure all Eligible Employees have now returned their Employee Nomination form indicating their eligibility and acceptance of being nominated by you.
- For all casual staff ensure they are long term employees (ie they have been employed for 12 months on a casual basis since 1 March 2019) and that they do not have a full time or part time job elsewhere. (Please note casual employees with a full time or part time job elsewhere cannot be nominated by you).
- Ensure employees who are aged 16 or 17 as at 1 March 2020 who are full-time students and are not financially independent are not eligible to be included.
- Ensure Eligible Participant Nominations Notice form has been completed by the employee
- For eligibility for future JobKeeper Payments you must ensure that all eligible employees are paid a minimum of $1,500 per fortnight where the payroll is weekly or fortnightly. Where you pay monthly, you must ensure that the employees receive the monthly equivalent of $1,500 per fortnight.
- JobKeeper Scheme enrolment from must be completed by 31 May 2020 (extended date) in order to claim JobKeeper payments for months of April and May. If the enrolment is after 31 May 2020 then regardless of your eligibility date there will be no catch up of the JobKeeper payments. Enrolments after 31 May 2020 will only qualify for the JobKeeper payments from the date of enrolment.
Monthly Reporting (Apr’20 to Oct’20)
- Once enrolled in the JobKeeper scheme entities are required to lodge their application for the JobKeeper payments within 7 days of end of the month.
- As part of the month end reporting entities are required to lodge a “JobKeeper Declaration Report” which will include the last months GST Turnover and the next months Projected GST Turnover. Please note this is not a retest of an entity’s eligibility. Once an entity meets the eligibility requirements of JobKeeper they are eligible for the remainder of the JobKeeper scheme period (30 March 2020 to 27 September 2020). This turnover information is being used by the ATO & Treasury to get up to date information on a monthly basis (rather than quarterly BAS returns) and also to get an indication of the actual results v projected results to get a guide as to the state of health of the business community and the recovery of the economy.
- Weekly / Fortnightly Payrolls – Review each pay run and payroll amounts paid and ensure all eligible employees have been paid a minimum gross wage of $1,500 for the fortnight. If any eligible employee has not been paid $1,500 gross for the fortnight then a “Top Up” payment (refer below) should be processed with that pay run. Please note there is no requirement to pay superannuation on any “Top Up” payments. Any employee that is paid less than $1,500 gross for the fortnight will not be eligible for any JobKeeper subsidy payment for that pay run.
- Monthly Payrolls – Review the monthly pay run and payroll amounts paid and ensure all eligible employees have been paid a monthly equivalent of $1,500 gross per fortnight ($3,000 per month assuming two fortnights per month). A “Top Up” payment (refer below) should be paid in that month to any eligible employee who has not received an equivalent of $1,500 per fortnight. Please note there is no requirement to pay superannuation on any “Top Up” payments. Any employee that is paid less than an equivalent of less than $1,500 gross for the fortnight will not be eligible for any JobKeeper subsidy payment that month.
- Ensure Single Touch Payroll (STP) reporting has been filed with the ATO following the processing of each payroll run.
- In order to meet the “JobKeeper Declaration Report” lodgement deadline of the 7th day following month end, you will need to ensure that your accounting and payroll transactions are processed on a regular basis and are up to dates. At a minimum, you will require all invoicing, debtor receipts and payroll transactions are processed for the month as this data is required to be included in the monthly report to the ATO.
Calculating & Recording JobKeeper “Top Up” Amounts
- Care needs to be taken when recording JobKeeper “Top Up” payments in the processing of your payroll. In your accounting software (Xero & MYOB) there is a “Top Up” payment category that should only be used where there is a “Top Up” payment. This category should be used when the gross payment is less than $1,500 per fortnight to bring them up the minimum $1,500 per fortnight (wage condition). This top up payment amount is not subject to Superannuation Guarantee. Allocating payments to JobKeeper “Top Up” payments incorrectly will result in the incorrect calculation of Superannuation Guarantee to be provided for employees.
- Below are some examples of wage payments to Eligible Employees and how the JobKeeper “Top Up” payments would be treated in your payroll;
- Part time employee who is still actively working in the business, receives gross wage of $1,000 per fortnight.
- The “Top Up” payment category is $500.
- The $1,000 representing payment for the hours worked is allocated to the normal payroll categories.
- Superannuation Guarantee is $95
- Part time employee who is still actively working in the business, receives gross wage of $1,000 per fortnight.
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- Stood down employee who is being paid $1,500 per fortnight in order to qualify for JobKeeper payments.
- The “Top Up” payment category is $1,500.
- No allocation of the payment to the normal payroll categories.
- Superannuation Guarantee is $ Nil
- Stood down employee who is being paid $1,500 per fortnight in order to qualify for JobKeeper payments.
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- Employee is still actively working in the business and receives a gross wage of $3,000 per fortnight.
- The “Top Up” payment category is $ Nil.
- The $3,000 representing payment for the hours worked is allocated to the normal payroll categories.
- Superannuation Guarantee provided is $285
- Employee is still actively working in the business and receives a gross wage of $3,000 per fortnight.
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- Employee who is taking annual leave while the business has slowed receives an annual leave payment (gross wage payment) of $1,300 per fortnight.
- The “Top Up” payment category is $200.
- The $1,300 which represents payment for accrued annual leave is allocated to the normal leave payroll category.
- Superannuation Guarantee is $123.50
- Employee who is taking annual leave while the business has slowed receives an annual leave payment (gross wage payment) of $1,300 per fortnight.
JobKeeper Fortnightly Pay Periods
| · Fortnight 1 – 30 March 2020 – 12 April 2020 |
| · Fortnight 2 – 13 April 2020 – 26 April 2020 |
| · Fortnight 3 – 27 April 2020 – 10 May 2020 |
| · Fortnight 4 – 11 May 2020 – 24 May 2020 |
| · Fortnight 5 – 25 May 2020 – 7 June 2020 |
| · Fortnight 6 – 8 June 2020 – 21 June 2020 |
| · Fortnight 7 – 22 June 2020 – 5 July 2020 |
| · Fortnight 8 – 6 July 2020 – 19 July 2020 |
| · Fortnight 9 – 20 July 2020 – 2 August 2020 |
| · Fortnight 10 – 3 August 2020 – 16 August 2020 |
| · Fortnight 11 – 17 August 2020 – 30 August 2020 |
| · Fortnight 12 – 31 August 2020 – 13 September 2020 |
| · Fortnight 13 – 14 September 2020 – 27 September 2020 |
Recording of JobKeeper Payments
We recommend that you set up a new account in your accounting software under the “Other Income” area (ie outside of your normal trading P&L accounts) and name this account “ATO JobKeeper Payments”. Please ensure for GST purposes that you select the GST Non-Reportable tax code and all payments from the ATO should be credited to this account.
Please note the JobKeeper payments do not form part of your GST turnover (that is to be reported monthly on your “JobKeeper Declaration Report” and these payments are also not subject to GST
If you need any accounting assistance then please contact your accountant who you deal with at the office.
