JobKeeper deposits received from ATO - entering in your Reckon Accounts

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  • Updated 2 weeks ago
As there are many threads on the Community asking how to enter the deposits received into your bank accounts for the Job Keeper payments (and also for the Cashflow Boost payments and other Covid-19 grants)... I will summarise here what most of those answering these questions are suggesting.  

From the ATO re business participants (sole traders, partnerships, companies, trusts)...
"The entity, not the eligible business participant, receives the JobKeeper payment. The exception is a sole trader, who is both the business entity and an eligible business participant, and so receives the JobKeeper payment themselves."
refer to https://www.ato.gov.au/General/JobKeeper-Payment/Sole-traders-and-other-entities/

In Reckon Accounts - I would suggest:

  • Create a new account of the type Other Income - call it Covid-19 Stimulus payments
  • Then create two sub accounts - one for Cashflow Boost (which is not taxable) and one for JobKeeper payments (which is taxable).
  • You may need a third sub account if you receive a State Govt grant payment (such as we have in SA) which will also be taxable.
  • Record the funds received from the ATO using Make Deposits to these accounts...
  • None of these payments will have GST on them or be reported on future BAS lodgements
Hopefully this is easily searchable on the Community - and reduces the number of similar questions?  

Regards
Linda


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Linda Putland, Accredited Partner

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Posted 2 months ago

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Jo Arnold

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Hi Linda

Thank you for simplifying these entries.  Could you please advise which is the correct tax code to use for each account.
Thank you in advance.
Jo

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Kris Williams

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No tax code, tax codes are only necessary for things that go on the BAS
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Jo Arnold

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Even easier.  Thanks Kris.

Any thoughts on how to mark a PAYG liability amount as paid in Reckon that has been waived by the ATO?
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Linda Putland, Accredited Partner

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Jo - the PAYG liability should be paid off as normal - and then the full amount of the cashflow boost should be entered to the Other Income account described above...
the PAYG liability has not been waived...  you have still paid it - but you have received funds from the ATO to help you to pay it...
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Jo Arnold

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ok thanks.  I think I've got it now!
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Jose Batres

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Hi Linda,
I create 2 separate Other income, one for cash flow boots and one for the JK payments.
I make a mistake when created the JK payments On the account type field I choose Income instead of other income. When I run profit and loss the JK payments show me as an income.
How can I edit the account and change the account type?
Cheers
Jose Batres
quickcleaning@bigpond.com  
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Jose Batres

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HI Linda,
I create other income with the correct account type, then in the journal I choose the new other account, now the JK payment doesn't show me in the profit and loss.

Jose Batres 
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Linda Putland, Accredited Partner

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Jose - you should be able to edit the JK payments account and change its type to Other Income?  If its not showing in your P&L then I would be double checking your entries/dates?
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Vanessa

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Hi Jo, I'm having difficulties regarding paying off the PAYG liability with the funds received from ATO. How did you go about inputting this into Reckon?
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Jo Arnold

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Hi Vanessa. 

I have created an "Other Income" account which has sub accounts of Cash Flow Boost and JobKeeper payments.  That way I can track the money we have received from the stimulus payments.  I also created a 'dummy' bank account which I called Cash Flow Boost.  I deposited the money in from the stimulus payments into that account and paid the liabilities from there.
Hope this helps.
Regards
Jo
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Sarah

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Hi There

I am attempting to set up new items in the Chart of Accounts and have set up the Covid-19 Stimulus payments as suggested. Is this the right location, and if so, should this have GST, or be GST free?

Additionally, in the sub-account for the JobKeeper payment, should this have GST applied?

Thanks
Sarah
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Linda Putland, Accredited Partner

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No GST on any of the payments Sarah - and they are not reported on the BAS - they are government payments.  :)
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Angela Kirk

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Hi,

Is there a way to do a P & L that shows this income?  My settings are on ALL income and ALL expenses, but it doesn't show the other income from the cash flow boost.  This means when we spend it it will look like the company has a decent deficit.  My accountant says it should show up in the P&L and Budget vs Actual.  Is there something wrong with my settings? or does this software just not do this?

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Kris Williams

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Accountant is correct. The account for the cash flow boost should be an income account or other income. It may be down the bottom of the P & L. Can’t remember if that’s where other income accounts appear
(Edited)
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Angela Kirk

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Thank you so much!  I didn't scroll down far enough to see that it was down the bottom.
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Kelly

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Thank you for your help. I have set up the accounts as you have described above and received payments into these accounts. Do I then transfer the money from this account into our business account to then pay wages out of the business account? We have 2 staff and my husband is the eligible business partner. Thank you
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Jo Arnold

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Hi Kelly
Assuming you're referring to the JobKeeper payment, all you need to do is receipt that money into your business account as it is purely a reimbursement for wages already paid.

How do we account for the cash flow boost merely being used in our integrated account to offset the PAYG owed. No cash refund received.
I also need to know how to clear the amount owing in the pay liabilities tab for PAYG. I am still confused... (not hard I know). This months cash flow boost only partially covered the PAYG owed
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Kris Williams

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Create a clearing account and pay the tax liability from this account. Then do a deposit to the same account for the amount of the cash flow boost. Clearing account will then be zero.
Another way that I use is to enter a bill for the PAYG and do a minus figure to the Cash Flow Boost other income a/c
Thanks Kris, but where does the deposit come from? As in where do I indicate it is "Received From" and "From Account"?
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Kris Williams

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ATO
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Kris Williams

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The amount is going to an income account called Cash Flow Boost via the make deposit window
Hi

can someone tell me what Tax Code to use for the Jopbkeeper Subsidy, I have set it up as Other Income but need to know the tax code.  TIA
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Kris Williams

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No tax code, it goes to an income account or other income as you have done but does not get shown in BAS