Jobkeeper and Annual Leave

KellyH
KellyH Member Posts: 35
edited July 2020 in Accounts Hosted

I have set up all the Payroll Items in Reckon as per the Jobkeeper instructions but Im a little confused as to the Leave entitlements. Most of my staff will be paid the $1500 jobkeeper payment plus the difference to make up their normal pay.  I understand that I will use the jobkeeper topup payroll item with the $1500 and then work out what the hours are to make up their normal pay.  I have read in all the previous posts that the $1500 doesn't automatically accrue the leave entitlements so im just wondering how to set this up as the instructions in the leave requirements are a little confusing. Im starting to understand it better but im just wondering if anyone can tell me how they have set their systems up.

Also I have a few staff that earn under the $1500.00 per fortnight so I know if just calculate their pay as normal and use the Jobkeeper topup item to make up their pay to the $1500.  For these staff I presume that they wont accrue holidays on their topup amount.  Am I presuming correctly. 

Any assistance would be greatly appreciated.

Comments

  • Linda ABC
    Linda ABC Accredited Partner Posts: 1,131 Accredited Partner Accredited Partner
    edited June 2020
    Kelly - are the employees who you are going to pay more than $1500 pf - actually working for this total amount of pay?  if so, then they get NIL topup - they just get their normal pay with all the normal accruals?

    for the staff who earn less than $1500 assume they are working less hours and yes, they get a topup payment to $1500 pf... BUT - are they working less because that's their normal situation - or are they stood down and working less than contracted?  the question about leave accruals depends on their employment contract with you and their current situation? 

    You may need to seek some advice from one of the HR groups and/or fairwork around this?  there is lots of info on the Fair Work website about this... once you know what your obligations are, then we can assist with how to record in Reckon?
  • KellyH
    KellyH Member Posts: 35
    edited May 2020

    Hello Linda.  All staff are continuing to work their normal hours.  Do I not have to show the 1500 jobkeeper component in their payslips.  I would continue to pay them their normal wages but I would be claiming the $1500 for each of them per fortnight. 

    With the staff that earn less than $1500 this is also their normal hours and wages, so I would pay them their normal wages and top them up to the $1500. 

    None of my staff have been stood done or doing less hours .

    Unfortunately im unclear for both different areas
  • Linda ABC
    Linda ABC Accredited Partner Posts: 1,131 Accredited Partner Accredited Partner
    edited July 2020
    Hi Kelly - if no staff are doing less than before - then I would say all wage accruals would be as per usual.  For those getting in excess of $1500 - you DO NOT have to show the jobkeeper payment in their wages - this reimbursement from the govt will just assist your business to keep paying them.  For those getting less than $1500 - you DO HAVE to show the Jobkeeper topup.  

    Have you watched the webinar that Reckon gave this week?  I believe it should answer all these questions for you?  https://community.reckon.com/reckon/topics/register-now-jobkeeper-webinar-for-reckon-accounts-reckon...
  • Simone Farrell_10599168
    Simone Farrell_10599168 Member Posts: 9
    edited July 2020
    Hi Kelly,
    This is a link to all the information regarding JobKeeper for Reckon.
    https://m.youtube.com/watch?v=kCAASHuJyJE&feature=youtu.be

    For your normal full time workers the $1500.00 will not be on their payslip. Just pay them as per usual. They will accrue leave as normal too..
    Jobkeeper comes up on a payslip for workers who receive a JOBKEEPER-TOPUP (allowance).

    Simone
  • KellyH
    KellyH Member Posts: 35
    edited May 2020

    Thankyou ladies.  I love that there is always someone with the right answer who is willing to help.  This makes perfect sense but I will watch the webinar just to be sure.  Thanks again
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited May 2020
    Hi Kelly.  As Linda has stated, watching the seminar, plus other setup procedures provided by Reckon, will answer your queries.  In particular there are critical issues involved, some of which Linda has referred to:
    1.  The flag JOB-KEEPER-START-FNXX indicates to the ATO the fortnight for which your are starting your claim.  If it relates to Fortnight 1, it will be FN01
    2.  The Topup payment in your case only relates to the difference between $1,500 and the amount they are earning in each pay, if they are earning less than $1,500
    3.  There are no leave accruals involved for the TOPUP because leave accrues on hours worked and in this case there are no hours worked, but just a TOPUP allowance which is being paid.
    John L G
  • KellyH
    KellyH Member Posts: 35
    edited May 2020

    Silly me did all the set ups for the new Payroll Items but didn't watch the webinar as I thought I had my head around what to do from ATO info and other webinars I had watched.  Will go and watch the Reckon one later today.
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Hi Linda and John,

    According to Fair work update, Jobkeeper Topup does accrue leave on the same rate as employees normal  work hours. (even for stand down employees) I just watched the Webinar again, Clayton did mention this but didn't calculate in his example of pay run. My question is when you set the payroll item Jobkeeper Topup as an allowance, you would not be able to enter the leave accrue rate. Also because we have to set the payroll item exact as  Jobkeeper Topup, so how we just use this one item for casual and full/part time employees? It is ok for casual because there is no leave accrued. However, how that apply to full/part time employees? enter accrued leave manually?

    Please advise,

    Thank you!
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Ok worked out. Need to make a new payroll item with hourly rate on Gross payment. For example, JKP TOPUP LEAVE ADJ, make it counts hours accrued  but no earning amount.
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited May 2020
    Lilly  You appear to be talking about a changing of the rules.  Annual leave still accrues on normal pay, but where Jobkeeper is being paid as a TOPUP, no hours are being worked, hence the reason that TOPUP is set up as an allowance.  Can you please direct us to the specific place in Fair Worker Australia, which states that leave accrues on the actual  TOPUP payment that is being made?
    John L G
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Hi John, I wish it is not the case. Because I myself also think it is not right to pay accrued leave on allowance. However, when I had Ai Group seminar about jobkeeper payment and Fair Works change, many people asked this question, the answer is Yes. The only option payment for an employer is Super SGC. And as far as I know MYOB has already set accrued leave for Jobkeekper topup.

    Clayton in his Webinar also mentioned this but no setting details. Anyway I worked out and tested, it is ok now.

    I guess it may be some grey area here, depending what industry you are and what your awards is.

    Kind regards,
  • Acctd4
    Acctd4 Accredited Partner Posts: 3,366 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited May 2020

    Hi Lilly

     

    The change to the Fair Work rules regarding Leave Accrual during JobKeeper periods specifically relates to full or part-time employees whose hours have been reduced or cut completely (stood down)

     

    Just to clarify further ….

     

    There is no Leave Accrual on the actual JK Topup Allowance itself.

    Where JK is being claimed & on-paid to employees, the employee must still accrue leave on their Pay based on their original, normal hours of work. 

    Their wages payment may be a combination of worked hours &/or JK Topup Allowance but their usual leave accrual must be continued.

     

    eg If an part-time employee normally works 25 hours p/wk but has been stood down, during JK they must continue to accrue the same amount of leave (on that 25 hrs p/wk).

     

    Kelly was correct in that setting up an additional “Hourly” standard Wage Payroll Item (@ $ 0.00 rate) (called “Stand Down Leave Accrual” or similar) & ensuring it is included for Leave Accruals is the current workaround to achieve this.

     

    In the above example, in addition to the JK Topup Allowance in the Other Payroll Items section, you would also include the SDLA Payroll Item in their Earnings section with “25” as the Hours in order to accrue the leave correctly.

    In cases where hours have been reduced, only the difference (between the usual quantity & that pay’s reduced quantity) would be entered for the Hours.

     

    Note: You are not paying accrued leave, the employee is just earning it as they normally would.

     

    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


    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!)
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Sorry I may not write clear, what I mean is accrued rate same as normal working hours. Of course there is no leave accrued on Jobkeeper Topup, (This is addition/allowance, you are not able to enter accrued rate)  that's why you need to set a new payroll item in Gross payment to enter accrued rate but value as 0. 
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Hi Shaz,

    According to your clarify,  then the accrued leave hours on any jobkeeper payment (include working normal or reduced hours even stand down) will be all same as employees normal working hours. It is different with John's reply: where Jobkeeper is being paid as a TOPUP, no hours are being worked so there is no accrued leave hours?
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited May 2020
    Lilly.  What Shaz says accords with what Fair Work Australia says.  It would have been more correct for me to say on normal pay ?or normal pay hours prior to JobKeeper.?
    John L G
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited May 2020
    As a follow up to this, I would hope that Reckon picks up the content of this thread and incorporates the workaround to cater for this in their instructions on how to properly record this to cater for the leave accrual issue.  Until I explored this further today, I was unaware of the Fair Work Australia ruling on stand-downs and I venture to say that I might not be the only one.  Therefore instructions on the correct method to account for the continuing leave accruals on original pre-Jobkeeper hours is imperative.
    John L G
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Hi John, I actually don't think that is logical/reasonable. Because they made Super SGC payment optional based on the Jobkeeper Topup is not ordinary earning. However, accrued leave hours also based on worked hours. With employees paid on Jobkeeper Topup or reduced working hours, there is not normal hours worked. The accrued leave hours should be based on worked hours as you said and same treatment as Super SGC. I really don't understand why they need to set accrued leave hours same as normal working hours!
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Sorry, accrued leave hours based on employee's normal working hours 
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited May 2020
    Hi Lilly.  I can readily agree with you that it does not sound logical, but unfortunately, neither of us make the rules and what comes out of this is that there is now a bit of a sting for employers who might think that they are fully covered by the JobKeeper payment they receive in such circumstances, whereas in fact they are still liable for accruing annual and personal leave on normal hours as if the stand down had not occurred.   The following statement comes from a publication issued by the Fair Work Ombudsman on 1/5/2020 which states:
    Employees subject to a JobKeeper enabling stand down direction still accrue their usual leave entitlements for the period the direction applies (as if the direction hadn't been given to them).  
    You can refer to this information and other similar information by following this link:
    https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/pay-and-leave-during-coronavirus/jobkeeper-wage-subsidy-scheme/leave-the-jobkeeper-scheme
    John L G
  • Lilly Scalora
    Lilly Scalora Member Posts: 49
    edited May 2020
    Yes. Thank you!




  • Mark Harrison
    Mark Harrison Member Posts: 2
    edited May 2020
    Excellent work John