nav[aria-label="Primary Navigation"] { padding: 0; & ul { list-style: none; width: 100%; display: flex; flex-direction: row; justify-content: start; align-items: start; gap: 30px; padding: 0; & li { margin: 0; } & ul li { list-style: none; } } }

covid-19 stand down

JULIE HENSHAW

Employees being stood down due to Covid-19 still accrue annual and personal leave. How do I manage this in payroll?

Comments

unknown

This content has been removed.

JULIE HENSHAW

Authority for what?

Sheelagh Lawton

Hi Julie, I'm not 100% on the answer to this so my suggestion comes with another suggestion that you confirm this with your Accountant first.
I would think to handle it this way: process your pay run as you normally would each week with: 0 Hours worked and $0 paid to each employee.
I would expect to see that Leave Entitlements will simply accrue throughout this period, doing this each week and submitting as you normally would. This keeps you compliant to the ATO and STP as normal.
I'm assuming from your post that you have had to stand your staff down due to Covid-19 and your plan is to recommence trading when you are able to.
I hope this helps in some small way. All the very best to you throughout all of this. Kind Regards.

Kris_Williams

Wouldn’t that depend on if the leave was set to accrue by pay, not by hours worked?

Acctd4

It’s far better to have all Leave accruing per hour as this can be applied across all employees & minimises errors if/when hours change or fluctuate.

If you have leave accruing per hour, you can then still track & accrue the leave correctly but just change the Pay Rate:

As RA can’t process $ 0.00 Pays, the workaround is currently to create a new Payroll Item for COVID-19. (This should be the same as their normal Payroll Item but at $ 0.00 rate)

Then process pay of $ 1 using this Payroll Item & deduct it back off again also

(You may need to create/use a separate Payroll Item to ensure Leave remains unaffected).

However I would hold off on the above for the moment following the PM’s announcement of the JobKeeper stimulus today.

Passing on of the JobKeeper Payment will likely best be trackable via a new Payroll Item too which will need to be setup just like a standard wage Item, accruing Super & Leave. However employers do have the option of limiting SGC on it to the employee’s usual pay amount which may mean any additional Super may then need to be setup & reported as RESC *

* This is based on the current information available but may be subject to change

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

John Graetz

I note that this initial conversation has now split into two different streams. One relates to leave continuing to accrue, whilst the other relates to the payment of SGC. Dealing with the SGC aspect, this is the current information available, you can refer to the following link:
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_0.pdf
This states that where the payment to the employee exceeds the amount that they normally receive, the employer has the option of paying SGC on that extra amount. To me, that does not seem to mean that this amount would be treated as RESC if paid, but rather as SGC if paid. The above link comes from The Treasury.

Regarding the issue concerning the accrual of leave during stand down, you can reference information from Fair Work Australia from the following link:
https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/business-closures-during-coronavirus
Within that documentation is the following statement:
Employees accrue leave as normal for the duration of the stand down.
So, two different principles are explained as above.

I agree with the comment by Shaz that it is far better to accrue leave on the basis of hours paid/worked. Where no payment is applicable because no Job Keeper money is being received, that does present a problem. Using the example that Shaz has provided above, it would seem that to set this up in Reckon, the actual pay item used would need to record say 38 hours worked (at a nominal rate) for the full-time employee per week with an offset using another salary type item, to reduce the payment back to zero, in order to show that there is no actual value wages paid during the period - I used to use a similar type of approach to cater for leave without pay. The first pay item in the sequence would therefore be set up to accrue leave on an hourly basis, whilst the second offset salary item would not attract any leave accruals. By doing this, leave would still accrue at the previous normal rate.
I know that in the past there have been some issues with trying to process zero value pays in Reckon, so, without doing any testing, I don't know if this approach will work or whether there needs to be a nominal payment of say 1 cent which must be processed.
John L G

unknown

This content has been removed.

unknown

This content has been removed.

John Graetz

Kevin. The rules are one thing but the method is another. Casuals don't accrue annual or personal leave so, I do not set them up to accrue leave. For all others, I only use hours these days as I have found that to be the best method, which overcomes any issues which might arise due to a change in actual hours worked.
John L G

unknown

This content has been removed.

JULIE HENSHAW

Thanks Everyone! My question is answered and even questions I didnt ask! Thank you!

Reckon Accounts Hosted Announcements & Important Info

Check out the latest important info & announcements for Reckon Accounts Hosted

Button

View all Reckon software categories 🗃️

Each Reckon software has its own dedicated category on the Community. Click below to browse all categories.

Explore all categories