Managing the JobKeeper Payment

Reporting JobKeeper Payments via STP

Step 1: Create the JobKeeper "top-up" pay category

For employees who already earn $1,500 or more per fortnight in gross earnings, nothing needs to change. That is, the pay category assigned against the employee's earnings are not required to change and you will keep reporting the employee's earnings via STP as per normal.

What will change is the reporting requirement for employees earning less than $1,500 gross earnings per fortnight. For these employees, a “top-up” amount must be paid to bring their taxable gross to $1,500 per fortnight. This "top-up" needs to be reported as an allowance and named using a specific description. To achieve this, a new pay category will be required as follows:

• Navigate to Management > Payroll > Payroll Settings > Pay Categories screen;
• Click on the 'Add' button located on the right-hand side;
• A new pay category box will open. Type the name of the new pay category, being JOBKEEPER-TOPUP, in the pay category name box.  Then click the 'Save' button:

Change the units on the pay category to ‘Fixed’, Super Rate to ‘0’ and payment classification 'Allowance (Other)':

It is essential that the pay category name and payment classification are set up as per the above instructions. The ATO has advised that any deviations from this exact set up may significantly delay or prevent reimbursement.

Note:

• Super is not mandatory on this payment. It will be up to the employer if they want to pay superannuation on the "top-up" component of the Jobkeeper Payment.
• This payment is taxable, however, the state authorities are yet to provide clear direction on whether the payment is liable for payroll tax.
• If you have already processed JobKeeper payments in the pay run and used a different pay category, that is fine. What you will need to do is edit the name and settings of the pay category already used in the pay run. When you then next report the pay run via STP, the employee's YTD earnings will update correctly to report in the ATO's prescribed format.

 

Step 2: Create a pay category for the "JobKeeper Start Fortnight"

The ATO requires that the employer indicates via STP when the JobKeeper payment commenced for each eligible employee. This needs to be done via setting up a new pay category for each applicable fortnight (where relevant) over the 13 fortnight period that the JobKeeper payment will run.

As per the "JOBKEEPER-TOPUP" pay category, the start fortnight pay category must be named and set up as per the ATO's specifications. The specifications are as follows:

• Pay Category Name: Must be in the format "JOBKEEPER-START-FNxx", where 'xx' is the number of the fortnight, ie the 1st fortnight is '01'. A separate pay category per fortnight will be required. Only create start fortnight pay categories for the fortnights that apply.  
• Payment Classification: Must be assigned to "Allowance (Other)". 

To determine what fortnight you commenced paying an employee the JobKeeper payment, refer to the table below and the dates allocated to each fortnight. Cross-reference the date you paid the employee with the dates in the table. For example, if you paid an employee the JobKeeper payment for the first time on the 2nd of April (ie pay date was 2/4/20), this means the payment was made in FN01:

The purpose of creating these pay categories is to be able to add them into the pay run as a one-off for each eligible employee. This data will then be transmitted to the ATO when the pay run is reported via STP. Please note: you cannot forward date the start fortnight entries in the pay run.

The process of adding the start fortnight pay category in the pay run is explained further below in the "Applying the JobKeeper Payment into the pay run" section.

 

Step 3: Create a pay category for the "JobKeeper Finish Fortnight"

Similarly, with the JobKeeper start fortnight, the ATO must be made aware when JobKeeper payments cease for any employee, as they may no longer be eligible. The ineligibility may be due to:

• Workers’ compensation absence;
• Cessation of employment; or
• Change of citizenship, visa, personal circumstances.

The ATO only need to be notified if the payments cease before the 13 fortnight period, ie before the 27th of September (being the date the JobKeeper payments subsidy ceases).   

As per the "JOBKEEPER-START-FNxx" pay category, the finish fortnight pay category must be named and set up as per the ATO's specifications. The specifications are as follows:

• Pay Category Name: Must be in the format "JOBKEEPER-FINISH-FNxx", where 'xx' is the number of the fortnight, ie the 4th fortnight is '04'. A separate pay category per fortnight will be required. Only create finish fortnight pay categories for the fortnights that apply.  
• Payment Classification: Must be assigned to "Allowance (Other)". 

To determine what fortnight you ceased paying an employee the JobKeeper payment, refer to the table below and the dates allocated to each fortnight. Cross-reference the date you last paid the employee with the dates in the table. For example, if you last paid an employee the JobKeeper payment on the 13th of May  (ie pay date was 13/5/20), this means the last payment was made in FN04:

The purpose of creating these pay categories is to be able to add them into the pay run as a one-off for each eligible employee. This data will then be transmitted to the ATO when the pay run is reported via STP. Please note: you cannot forward date the start fortnight entries in the pay run.

The process of adding the finish fortnight pay category in the pay run is explained further below in the "Applying the JobKeeper Payment into the pay run" section.

 

Applying the JobKeeper Payment into the pay run

There are different scenarios to consider in a pay run depending on the eligible employee’s gross fortnightly wages. If the employee is still completing their duties and working for the employer, then the employer still needs to pay the employee for the work they are doing and the employee is to receive their entitlements. 

 

Scenario A: Eligible employee earnings are more than $1,500 per fortnight before tax

If the employee’s earnings in the pay run you are processing will be more than $1,500 per fortnight, then continue to pay the employee all earnings and include all entitlements to leave accrual and superannuation as you usually would. The JobKeeper Payment will be a supplement for the employer and there will be no change required in the pay run. For this scenario, you would just need to notify the ATO from which fortnight the subsidy is to be reimbursed to the employer for the eligible employee. To do this, you would add an earnings line in the pay run using the start fortnight pay category (ensure to use the correct pay category based on the fortnight the subsidy is to commence being reimbursed for). Because the system does not report $0 earnings to the ATO, you will need to add earnings of $0.01, as follows:

Remember that you only need to notify the ATO of the start fortnight once for each eligible employee.

Scenario B: Eligible employee earnings are less than $1,500 per fortnight before tax

If the employee’s earnings are less than $1,500 per fortnight, then continue to pay the employee all earning and include all entitlements to leave accrual and superannuation as you usually would, plus an additional earnings line for the “top-up” amount totalling the difference between the JobKeeper Payment and the employee’s gross earnings. Use the "JOBKEEPER-TOPUP" pay category for this. Add 1 x Unit and the rate will be the difference between the JobKeeper Payment and the employee's gross earnings, known as the “top-up” payment:

With this scenario, you also need to notify the ATO which fortnight you commenced paying the eligible employee the JobKeeper payment. As such, as per scenario A, you need to add an earnings line in the pay run using the relevant start fortnight pay category (ensure to use the correct pay category based on the fortnight the payment to the employee commenced). Because the system does not report $0 earnings to the ATO, you will need to add earnings of $0.01. The start fortnight only needs to be entered once in a pay run for each eligible employee. 

Scenario C: Eligible employee is not working due to a stand-down period

If during a stand-down period the employee is eligible for the JobKeeper Payment, the employee will be entitled to the full JobKeeper Payment amount of $1,500 per fortnight (as they are not being paid during stand down). For further information on managing a stand down in the pay run, click here.

Use the "JOBKEEPER-TOPUP" pay category for this and add 1 x unit of $1500:

Note, the earnings details will still accrue leave from the Stand Down pay category however the payment will not attract superannuation.

With this scenario, you also need to notify the ATO which fortnight you commenced paying the eligible employee the JobKeeper payment. As such, as per scenario A, you need to add an earnings line in the pay run using the relevant start fortnight pay category (ensure to use the correct pay category based on the fortnight the payment to the employee commenced). Because the system does not report $0 earnings to the ATO, you will need to add earnings of $0.01. The start fortnight only needs to be entered once in a pay run for each eligible employee. 

Notifying the ATO of JobKeeper payment cessation

If there is an employee who is no longer eligible for the JobKeeper payment and so the employer must cease paying, the employer must also notify the ATO via STP. To do this, add an earnings line in the pay run using the relevant finish fortnight pay category (ensure to use the correct pay category based on the fortnight the payment to the employee will cease). Because the system does not report $0 earnings to the ATO, you will need to add earnings of $0.01. The finish fortnight only needs to be entered once in the applicable pay run:

 

Bulk import of start fortnight/finish fortnight notifications in the pay run

If you have many employees being paid the JobKeeper payment and need to process the one-off notification to the ATO using the"JOBKEEPER-START-FNxx" pay category in the pay run, you can do this using the import a pay run feature.

 

Should you have any questions, feel free to email us at support@roubler.com.