how to record jobkeeper business participant payment from the ATO

Lee_8688889

Linda ABC

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

Lee_8688889

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

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

thanks very much