Workcover payments to employee

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Hi,

I'm seeking advice on how to set up payroll items in Reckon Accounts for an employee who is on workcover, initially not working at all for 3 weeks and then transitioning back to work with modified duties and reduced hours. I'd also like to know how to correctly categorise these items for STP 2 reporting.

Any advice appreciated - thank you!

Best Answer

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,460 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    Hi @Wini1010

    You need to set up 2 new Payroll Items for this as "working" & "non-working" under Workers Comp need to be reported separately for STP2. The 2 relevant Tax Tracking Types to be mapped to are:

    • Working = Gross Payments
    • Non-Working = Leave - Workers Compensation (W)

    PAYG will be applicable in both cases as per the employee's usual tax code status.

    Generally, SG Super is only payable when working however, some modern Awards specify super is payable regardless, so you'll need to refer to your relevant Award to clarify this.

    Leave entitlements also vary from state to state so again, you'll need to check your specific state legislation on that.

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)

Answers

  • Wini1010
    Wini1010 Member Posts: 14
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    Thanks so much Shaz - that is really helpful!

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,460 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    You're very welcome @Wini1010 😊

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Wini1010
    Wini1010 Member Posts: 14
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    Hi Shaz,

    I'm hoping you can assist me with some further queries on this issue:

    1. Is there a reason I should use a new payroll item Workers Comp - Working for the hours worked on modified duties rather than the employee's normal hourly rate payroll item?
    2. Annual leave accrues on WC leave in Victoria but personal leave doesn't- what is the best way to manage the accrual for AL but not PL in Reckon?
    3. The employee was paid personal leave for a fortnight when the injury occurred. The Workcover claim/reimbursement has been backdated to cover this fortnight and I need to reallocate this time from personal leave to Workcover leave - non working for that prior pay period. What is the best way to do this adjustment in Reckon and for STP? Superannuation applied to the personal leave payment but doesn't apply to Workcover - non working leave, so the superannuation needs to be adjusted as well. How do I do this?

    I'd appreciate your advice please!

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,460 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    Hi @Wini1010

    1. Only because the ATO wants it identified separately for STP2, it doesn't affect any actual liability calculations
    2. This is a tricky one because Payroll Items can only be set to accrue All Leave or None (eg not selected Leave) Therefore, you would need to manually adjust the Personal Leave Available balance in the employee record to remove the accrual of this one. HOWEVER, this may cause calculation issues as the system is not designed for regular manual adjusting so I would be inclined to either wear it or adjust it ONCE only, after all the WorkCover payments have been completed
    3. Unlock that Paycheque & edit it to replace the Personal Leave with the WorkCover Payroll Item instead. Assuming you have the Payroll Items all set up correctly, this will automatically adjust the Super calculation too.

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Wini1010
    Wini1010 Member Posts: 14
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    Thank you Shaz.

    Just to clarify re Q1, the employee's usual hourly rate payroll item also maps to Gross Payments for STP2. Do I still need to use a new Workers Comp - working payroll item for the modified duties worked hours because this shows separately somehow in STP 2?

    I really appreciate your help. :)

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,460 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    Hi @Wini1010

    It depend if the Workers Comp is a topup (eg out of pocket, additional amount paid by you) or purely on-payment of the Workers Comp amount received.

    The designated category for STP2 - working & non-working - that needs to be mapped if the W/Comp IS covered/reimbursed by WorkCover is Leave - Workers Comp (W)

    If the amount you are paying is NOT covered under W/Comp then yes, you can just use the employee's usual Payroll Item as this isn't reported any differently 😊

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Wini1010
    Wini1010 Member Posts: 14
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    Ok, so this employee is paid a weekly payment by Workcover (by reimbursement to our business) calculated as "95% of your pre-injury average weekly earnings subject to a Statutory maximum of double the Victorian average weekly earnings (currently $2660* a week), minus what you're currently earning at work".

    The employee has returned to modified duties for a few hours a day (less than normal). We pay the employee at their usual hourly rate for these hours worked.

    Is this correct then:

    Hours worked -> use employee's usual payroll item which maps to Gross Payments

    Workcover weekly payment as described above -> Workcover - non working payroll item mapped to Leave - Workers Comp (W)

    Thanks Shaz!

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,460 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    Yes, that's correct @Wini1010 ☺️

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Wini1010
    Wini1010 Member Posts: 14
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    Thanks Shaz - very helpful. :)