JOBKEEPER PAYMENT: How to Set Up and Process the JobKeeper Payment
- Suzanne Johnstone
- Apr 22, 2020
- 5 min read
JobKeeper Payment STP Payroll Process Explained
The JobKeeper scheme starts on 30th March 2020 and ends on 27th September 2020.
There are in total 13 fortnightly pay cycles that the ATO will require reporting. The first ATO payroll cycle commences on Tuesday 31st March 2020.
This is only a 12 day cycle, whereas the following fortnightly payroll cycles are 13 days each, with the pay period covering from Monday through to Sunday.
NOTE: August contains 3 fortnightly pay cycles.
Your standard payroll cycle may be Weekly, Fortnightly or Monthly, and may not follow a Monday to Sunday pay week.
This article is written with the presumption that the Business is eligible, it has already Enrolled for the JobKeeper Payment via the Business Portal using myGovID, you have already identified your Employee’s eligibility for JobKeeper Payment, and you have sent your Employees the JobKeeper employee nomination notice.
Just to clarify what being an “eligible employee” means,
Are employed by the Business (including those stood down or re-hired)
Permanent Full Time or Part Time Employee as of 1st March 2020
Long-term Casual Employee (employed on a regular and systematic basis for at least 12 months) as of 1st March 2020 and not a permanent employee of any other employer
Were at least 16 years of age on 1st March 2020
Were an Australian citizen, the holder of a permanent Visa, or a Protected Special Category and Special Category (Subclass 444) Visa Holder.
Were not in receipt of government Parental Leave or Dad and Partner Pay for the relevant fortnight.
If the Business has not already conducted this 1st step, please read our recent article, “JOBKEEPER PAYMENT: Is your business eligible? – Australian Government Economic Response” (https://www.concise-advice.com.au/post/jobkeeper-payment-is-your-business-eligible-australian-government-economic-response) for further information.
The 2nd step, according to the “JobKeeper guide – employers reporting through STP” page on the ATO website (https://www.ato.gov.au/general/jobkeeper-payment/In-detail/JobKeeper-guide---employers-reporting-through-STP/),
Identify and maintain your eligible employees.
This can be done in 1 of 3 ways.
This article only goes into detail for the 1st option of “Directly into your payroll software by 30 April 2020”.
For any Businesses that are not using a payroll software that enables the JobKeeper functionality, I have included the links at the end of this article.
1. Directly into your payroll software by 30 April 2020, providing your software has been updated with JobKeeper functionality. Contact your payroll software provider to find out if they have updated the product with JobKeeper functionality. Most payroll providers have already done this.
From my experience, this is a straightforward process to follow. Obviously, each payroll software provider will vary their process.
This where you will have to set up the 3 different codes that you will need to set up in your payroll, under Allowance (Other). You need to ensure that these new payroll items are set up with NO SUPERANNUATION. Payroll Tax and Workers Compensation advice varies. See below.
i. JOBKEEPER-START-FNxx
ii. JOBKEEPER-FINISH-FNxx
iii. JOBKEEPER-TOPUP
Superannuation – Not applicable to the Top Up component of wages – Australia Wide.
Payroll Tax – Not applicable to the Top Up component in SA and WA. Remaining States have yet to announce if they will follow suit.
Workers Compensation – Whilst researching for this article, the only mention I could find was on NSW SIRA and SA. Effectively both sites have stated that they are reviewing how the JobKeeper Payment will be treated for Premium Calculation purposes will provide further information once this becomes available.
ANNUAL & PERSONAL LEAVE ACCRUALS – It is important to note that leave accrues as per the Employees ordinary hours before any Stand Down or Reduced Hours were implemented.
This may require a manual adjustment in your payroll entry.
If you are not including a "JOBKEEPER-TOPUP" payment in your 1st upload, you may need to process an out of cycle pay and upload it to the ATO via the STP function.
This process is where you will notify the ATO (via STP upload) of which eligible employee you are identifying, and most importantly, which fortnight that they became eligible.
The eligibility is tied to when the Business became ELIGIBLE.
The code JOBKEEPER-START-FN needs to have the corresponding week number immediately after “FN”.
For example;
There are payroll software providers that will not allow a “$0.00” entry for a payroll item. If your payroll software is one of these, simply enter $0.01”.
If you are running a Top Up payment for the month of April in your 1st payroll entry, you would also include on the payroll entry the code JOBKEEPER-TOPUP, with the amount equalling the balance of the $3,000 JobKeeper Payment for the month of April.
For each fortnightly payroll cycle thereafter (or the 2nd and 4th weekly payroll cycle for those Businesses that run weekly payroll), you only need to include the JOBKEEPER-TOPUP allowance code, ONLY FOR ANY SHORTFALL AMOUNT to reach the $1,500 per fortnight.
Weekly Pay Cycle – The reason it is recommended that you calculate the JobKeeper Payment Top Up in the 2nd and 4th weekly pay-run is to avoid inadvertently overpaying your Employees.
Monthly Pay Cycle – For those Businesses that run a Monthly payroll cycle, you would have to make the decision as to whether you are going average out the JobKeeper Payment (i.e. up to $3,250 per month) or do extra calculations on your payroll to break it down into the pay schedule provided by the ATO. If your Business pays your staff in advance (in most instances that would be 2 weeks in arrears and 2 weeks in advance), if your Employee resigned or they were terminated, there is the risk that you would have overpaid the JobKeeper Payment, with no recourse to claw back, without the Employees permission.
The above "JOBKEEPER-TOPUP" process is only required for any Employees who do not earn up to $1,500 per fortnight.
Employees who EARN through normal working hours and wages up to $1,500 per fortnight are to be paid as per the normal payroll process.
During this 13 week period, Employees may leave their employment. This is where the JOBKEEPER-FINISH-FNxx code is used.
As in the “START” process, a payroll cycle will need to include the JOBKEEPER-FINISH-FNxx code, where the “xx” quotes the week that the employment was terminated.
For example;
The 3rd step in this process is to make a business monthly declaration.
Make a business monthly declaration.
Each month you need to log onto the Business Portal and review the number of eligible employees for each JobKeeper fortnight.
You also have to provide your current and projected GST turnover. This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme.
You will also have to re-confirm your contact and bank details for payment from the ATO.
From the 4th May 2020, using the ATO Business Portal you can apply to claim the JobKeeper payment.
The ATO will have on file your payroll records from the STP upload.
Business Portal Links:
If your Business is confused about how to "Set Up & Process the JobKeeper Payment", that's where Concise Advice & Business Solutions Pty Ltd can help.
We can assess your current business with a fresh pair of eyes, and provide CONCISE ADVICE and offer BUSINESS SOLUTIONS.
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