how to record jobkeeper business participant payment from the ATO

Lee_8688889
Lee_8688889 Member Posts: 85 Reckoner Reckoner
edited July 2020 in Accounts Hosted

Comments

  • Linda ABC
    Linda ABC Accredited Partner Posts: 1,133 Accredited Partner Accredited Partner
    edited July 2020
    Lee , I think l and others have answered this question a dozen times this week...the business participant payment is income to the business, not the individual, and is taxable.. allocate it to an Other Income account . Reckon cant really create a thread around this as it would constitute accounting advice I think, but I will try to find the ATO wording that is relevant..and post the link..
  • John Graetz
    John Graetz Member Posts: 1,663 Reckon Star Reckon Star
    edited May 2020
  • Lee_8688889
    Lee_8688889 Member Posts: 85 Reckoner Reckoner
    edited May 2020
    Thank you for comments Linda. I appreciate your response. Just to clarify, ...

    I thought Other Income was a non-taxable account. So I have placed the Cashflow Boost as Other Income because of this.

    So then Jobkeeper is just listed as an Income account, not Other Income?
  • Linda ABC
    Linda ABC Accredited Partner Posts: 1,133 Accredited Partner Accredited Partner
    edited May 2020
    Other Income is just a type of account that allows the formatting of the Profit & Loss statement to show in a specific way - eg Operating Income - less Cost of Goods sold, then shows a Gross Profit total, less Operating Expenses, then shows a Net Ordinary Income figure - then you have Other Income and Other Expenses that subtotal as Net Other Income - with a final total of Net Income....

    Its up to the individual business to determine what they use the Other Income and Other Expense items for - and it varies from business to business... but given that these stimulus payments are not part of the ordinary operations of the business - this is why we are suggesting they get allocated to Other Income - so when reviewing your business this year and comparing figures to previous and future years - the payments you are getting now - wont "muddy the waters" from a business operations perspective.  

    Your accountant will always then work out your taxable income - with various add back amounts, such as Entertainment expenses, Exempt Minor Fringe Benefits, these stimulus payments, Non Deductible expenses etc...
  • Lee_8688889
    Lee_8688889 Member Posts: 85 Reckoner Reckoner
    edited May 2020
    thanks very much :)