jobkeeper payroll item

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I have a number of clients wishing to include the JobKeeper payment in the April 2020 pays $3000 per employee. When will Reckon release the patch to comply. The feedback I have received to date is that the JobKeeper payment should be setup as an allowance & reported as gross wages, if this is correct then surely we can proceed . . . . 
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Posted 4 months ago

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Rav, Community Manager

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Hi Jacqui,
We're currently formalising our processes for our individual software as we speak in conjunction with the ATO. We'll be able to provide guidance on this early next week. Stay tuned to this thread as further updates will be made there - Jobkeeper payments & Reckon software
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Leanne

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How can I fix my Accounts so that the AMounts show in the correct Line, and not on the Salary Wages Other Line.  Can someone help with this?  I have tried phoning, but no good.
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Linda Putland, Accredited Partner

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Hi Leanne - this usually indicates that you have a payroll item that is pointing to a header account instead of a sub account - if you zoom into where the amounts show on the Other line - then note the amount - then zoom into a pay - you should be able to identify which payroll item needs correcting... Once you correct it - then the pays will fix themselves.  :)
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Leanne

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Hi Linda.  Thanks for your help.  I am all good now.  Thanks again.  Leanne.  :)
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Colleen Dwyer

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Where is Reckon at with setting up for Jobkeeper? Quickbooks had it done a week ago?
Rav I presume we can follow the same process for Payroll Premier as Reckon Accounts
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Rav, Community Manager

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We've just completed our guide for Payroll Premier which I've posted here -
JOBKEEPER PAYMENTS WITH PAYROLL PREMIER 2019/20
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Gary Martin

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Hi, I am paying for first time April Jobkeeper so each employee is either getting $3000 or a top up to $3000
do I show FN1 or 2 as the start date
Gary
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Kevin Russell, Accredited Partner

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Who told you there's a patch? Myob have not done that. Nor Xero
Sorry, Patch and or Detailed instructions to comply with the STP reporting
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Linda Putland, Accredited Partner

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Hi Jacqui - there won't need to be a patch - your clients will just need to create a couple of extra payroll items.  Follow the thread that Rav has provided.. :)
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Susan Jenkins-Peat

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Linda thank you, this is what I thought and my question exactly, when I rang Reckon today, if there's no patch coming and we already know what codes to use and when, surely we could set these up manually in the Allowances tab
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Linda Putland, Accredited Partner

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Only if you know the EXACT requirements for the allowances etc - the ATO has very specific requirements.  The information will be made available by Reckon very soon.  
(Edited)
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Susan Jenkins-Peat

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Ok I will wait, thanks for the advice Linda
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Tian Lan

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Hi Linda
I've read the STP requirement posted by ATO. They have very strict description for each Jobkeeper payment, being JOBKEEPER-START-FN01 or JOBKEEPER-TOPUP showing under other allowance type. My question is:
We just finished our normal fortnightly payroll period from 6/4 to 19/4 with payment date 17/4. To qualify with the jobkeeper payment, we will have to make an additional payroll next week, say 23rd April, to top up some payroll we processed last fortnightly to $1500, also to report ATO that we have started job keeper payment for eligible employees. My understanding is we will add "JOBKEEPER-START-FN01" to each eligible employee as other allowance type with zero amount. But what should we do for those who earned more than $1500 fortnightly? We won't pay them extra on 23rd April. should I process as zero payment, but only putting "JOBKEEPER-START-FN01" to show they are eligible employees? Hope you can help with this. 
Thanks
Linda
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Linda Putland, Accredited Partner

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Hi Tian - to answer your question - go back and edit the pays you did on the 17th for the employees that earned more than $1500 and add in the JOBKEEPER-START-FN01 item to their pay with 0.00 amount.    Then lodge an STP file for this pay (do a full file replacement if you have already lodged prior to this?).

For the employees that you are going to topup on the 23rd - add in the JOBKEEPER-START-FN01 item with 0.00 as the amount and then add in the JOBKPEER-TOPUP item with the amount required to bring them up to the required amount for April... Note that this will be $1500 x two fortnights - or $3000 - so just check your figures before processing?  You can then lodge the STP file for the 23rd April pay.

Maybe consider reviewing your payroll fortnights?  the ATO will reimburse 2 x fortnightly JobKeeper amounts in April, May, June, July and September and 3 for August... but the dates you appear to be using would have you doing 3 x fortnights in May ... it might be easier to align your payroll fortnights with the ATO for this 6 months?
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Tian Lan

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Hi Linda
Thanks for your response. We have fortnightly payroll, however it's one week different to the ATO jobkeeper payment cycle. I'm planning to pay as below, not sure if it's ok. What do you think? Or is it an ATO question?
Thanks

ATO Jobkeeper cycle                                        Our business payroll Cycle
Fortnight 01 (30 March – 12 April)                       6 April - 19 April
Fortnight 02 (13 April – 26 April)                          20 April - 3 May
Fortnight 03 (27 April – 10 May)                          4 May - 17 May
Fortnight 04 (11 May – 24 May)                          18 May - 31 May
Fortnight 05 (25 May to 7 June)                          1 June - 14 June
Fortnight 06 (8 June to 21 June)                          15 June - 28 June
Fortnight 07 (22 June to 5 July)                             29 June - 12 July
Fortnight 08 (6 July to 19 July)                              13 July - 26 July
Fortnight 09 (20 July to 2 August)                           27 July - 9 Aug
Fortnight 10 (3 August to 16 August)                      10 Aug - 23 Aug
Fortnight 11 (17 August to 30 August)                     24 Aug - 6 Sep
Fortnight 12 (31 August to 13 September)               7 Sep - 20 Sep
Fortnight 13 (14 September to 27 September)       21 Sep - 4 Oct
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Tian Lan

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Hi Linda
You are right. I just spoke to ATO. my plan won't work, as we must pay our employees at least $3000 by end of April to be eligible for the April job keeper payments. Which means, we had to go back to 2 payroll cycle (23 March to 5 April, and 6 April to 19 April) and changed the codes etc. And you are right, aligning with ATO might be easier going forward. Haven't thought about how it will work though. Any idea? 
Thanks
Linda
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Glenda Veale

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My understanding is that it commences on 30th March so only one week of your first pay cycle would be in that period.  Then at the end you will have one week of a pay cycle that falls into the period.
(Edited)
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Tian Lan

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That will be very hard to separate. Do you know how it should work?
Thanks
Linda
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Linda Putland, Accredited Partner

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One thought would be to pay 1 weeks pay before end of April - to be the 2nd fortnight of $1500 JK topus etc... then stick with the altered fortnights until the end of JK - then pay another Week and revert back to usual fortnight schedule if you want?  see below:

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Tian Lan

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Thanks Linda, it’s a very good thought. When I code it next week for the 1 week pay say on 24th April, should I code to f01 or f02? Do we need to code JobKeeper f01, 02, 03..... every time when we process each payroll cycle or only once to ATO for STP purposes?
Thanks
Linda
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Linda Putland, Accredited Partner

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Just use the FN01 code.. to indicate that you started paying your staff the min 1500pf from the first JobKeeper fortnight ..... you don't need to use this code again...just once ..
(Edited)
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Tian Lan

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Thanks Linda. When I use the FN01 code for next week special pay run, should I include my previous 2 payroll cycle processed in April to make decision if a top up is needed to reach $3000 for the April month? Sorry for all the questions, clear as mud.
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Linda Putland, Accredited Partner

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ok - I see what you mean... so... firstly  - any eligible employees that you paid in excess of $1500 pf don't need any topup - so the payrun for the 26th would just be a normal one week pay...then that just leaves the employees working/earning less than $1500pf... so for the previous fortnight - you will need to calculate their topup amount... but then you have a weeks work to 26th May and you might need to workout what their work/pay was for the week prior to 6th April - add these together and then work out what topup amount is required to bring these 2 weeks to $1500?  does that make sense?
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Tian Lan

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A little bit Linda. What I meant is we have processed two fortnightly payroll in April, one paid on 3rd Apr and second one paid on 17th April. When I prepare the one week special pay next week on 24th April, should I add these 3 up together, and top up those who earns less than 3000( as it’s two fortnight pay)? Another concern is the annual leave accrual. We are accruing on each pay, the special one week pay will mess up the annual leave accruals.
Thanks
Linda
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Tian Lan

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Hi Linda
I think we should follow your first response. We go back to the payroll processed on 3rd April (the payrun before last), edited each eligible employee by adding FN01 showing they are eligible. For those who earns more than 1500 pf, everything will be fine, for those who earns less than 1500 pf, we will make additional payrun next week to top up to 3000 (being two payruns). And stp 3rd apr file as full file replacement. What’s your thought?
Linda
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Linda Putland, Accredited Partner

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that certainly would be simpler - but you will only get a payment from the ATO for May of $3000 per employee - even though your current pay cycle has 3 x fortnights in May - so long as the ATO then pays you $4500 in August (when you only have 2 x fortnights) all will be good - but not sure if any of us know if that will work at this stage?  perhaps do what you propose (the simpler option) and we will cross the 3 x fortnight month issue when we come to it?

re the leave accruals - yes, I can see your point - could be manually fixed if a small number of employees - but if lots of employees - then your suggestion above is simplest...
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Tian Lan

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Hi Linda
Yes, to manually adjust 90 employees' annual leave won't be a fun process.
And no one knows if that May and Aug payments will work yet at this stage. Maybe Rav from Reckon Technique support will have some detailed instruction from ATO after discussion?
Another question goes back to adding one extra pay this week for all employees, to align with ATO cycle (which my boss prefers). If i do this way, and i put FN01 for this week's pay run, does that mean all my previous April payroll won't be counted as part of $3000 jobkeeper calculation? Then we are worse off? 
Thanks
Linda
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Linda Putland, Accredited Partner

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The purpose of adding the flat JOBKEEPER-START-FN01 is to tell the ATO that this employee is eligible right from the first ATO fortnight... it can be added in any payrun for April and will achieve the desired result.  So all good with what you are proposing..  this information comes from the document - here I quote:
"if the employer is back paying an eligible employee in an out of cycle payment on the last Friday in April to qualify for the subsidy, where the employee was topped up each fortnight, use JOBKEEPER-START-FN01"
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Tian Lan

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In that case, we may process all eligible employees this week, instead of editing previous STP, but put zero amount for those who already earns more than $3000 for April, and top up those who are less. Only question will depend on if we can get the same result for May and Aug from ATO, without aligning with their jobkeeper payment cycle.
Thanks
Linda
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Tian Lan

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Hi Linda
Thanks for all your valuable information. I think we will do a topup payrun this week and change the cycle in May to align with ATO. Do you know if there's any faster way to adjust the annual leave accruals instead of manually adjusting all and adjusting back afterwards?
Also for those who earns more than 3000 for April already, should I add them in this week's special pay run by putting zero amount and adding FN01 on the bottom, or should I edit the previous payroll? Is zero amount OK? as I heard somewhere says i have to put 0.01, other wise it won't report to ATO through STP?
Am I the only one who's getting all these complicated issues?
Thanks
Linda
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Linda Putland, Accredited Partner

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Tian - if you wait a day or so - Reckon are planning to fix the STP lodgement process so that a 0.00 amount for the FN01 allowance item will be sufficient to record start of JK... then I would leave it up to you to decide if you edit the previous pay for those earning more than $3k for April and add the FN01 item - or do as you have suggested with the special payrun. 

Re the leave accruals - if you are going to realign your pay periods - and since leave only applies to your permanent staff - you could tick the Do not accrue leave on the week of the cycle change - then when you cycle change back after JobKeeper - leave that week to accrue the full fortnight's leave?  Or do this in reverse, allow the full fortnight accrual when you do the cycle change - then tick Do not accrue leave on the week that you reverse the cycle change? This would negate the need to make any complicated changes to the employees files?  Maybe run all the leave reports before and after each cycle change for reference points?
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Tian Lan

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Thanks Linda. I'll wait for Reckon's update.
Re the leave accruals, we will change the cycle permanently. so tick and untick is not doable. Any other suggestions?
Thanks
Linda
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Linda Putland, Accredited Partner

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Let me know how you currently accrue for staff and I will have a think for you! :)
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Tian Lan

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You are amazing Linda! We are currently accrue annual leave and personal leave as per pay cycle. For example, 20 days annual leave entitlement for a permanent full time employee, with 38 hours each week. Every fortnightly pay, we accrue 5.85 hours for the annual leave and 2.92 personal leave.
Thanks
Linda
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Linda Putland, Accredited Partner

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Well as much as it probably is going to be a pain - I think the best plan of attack is this:
  • just before you run the weekly pay that realigns your fortnightly schedule to the ATO one.. run the Leave Accrual report - and add the Personal Rate and the Holiday rate columns before bringing this up on the screen.
  • Send to yourself as an Excel file - save this original file
  • When opened in excel - first turn all the values into numbers
  • Then add a column for New Personal Leave available and New Holiday Leave available.
  • in the New Personal leave column - type =(current personal leave available column - (Personal rate/2) and press enter... once this works correctly on the first line - copy it down all the other applicable rows
  • in the New Holiday leave column - type "=(current holiday leave available column - (Holiday rate/2))" and press enter
  • once this works correctly on the first line - copy it down all the other applicable rows (this is taking half a fortnights leave accrual off the current accrual - which aligns with the single weeks pay you will process when you change the pay schedule)
  • Save this spreadsheet and call it something similar to "Calculations for leave adjustments upon conversion to new fortnightly pay schedule"
  • Now go back to your Leave accrual report
  • for the relevant employees - drill down into each line - this will take you straight to the employees record - you can go to their Payroll & Compensation window - then choose Leave accruals - then edit their personal and holiday leave as per the spreadsheet
  • Before pressing OK to save each employees changes - I would click on the Notes button - then the date stamp - and then - type Leave edited as per calculations (refer to the spreadsheet) upon change to fortnightly pay schedule)
  • Repeat for each employee - I know it will take awhile - but I think much quicker than editing pays/accrual rates... - and is fully documented...before and after
  • When completed - re-run the Leave Accrual report and save - with reference to this being AFTER conversion to new pay schedule.
Hopefully this makes sense?

cheers
Linda
PS - if you think you can cashflow the May additional fortnight topup that you have to pay (until August) - then you may not need to do this?...
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Tian Lan

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Hi Linda
I have thought the same: instead of adjusting twice on the rate, only adjust once on the leave balance available. Just not sure if Reckon has import function for this to import all changes from excel to the system.
PS boss prefers to change the cycle to align with ato and permanently. As no one knows what will happen if we are not align with it.
It’s not an easy process to get JobKeeper payment. We are slowly getting there.
Will wait on reckon update regarding the other issue. Really appreciate all your help and explanation.
Linda
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Linda Putland, Accredited Partner

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Morning Tian, you can now lodge STP with the 0.00 FN01 allowance item.
(Edited)
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Tian Lan

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Morning Linda. It's great news. Thanks!
Hi Jacqui

Set up a new payroll item based on an amount entered and not rate & hours.  Make the item excluded from super but taxable. Link it to your payroll expense account and part of Gross payments for STP reporting.

The job keeper payment received is classed as "income" but does not attract gst, I would recommend setting up a new income account for this.

On the second week of the fortnight (1st one being 30Mar-12Apr) work out if the employee reached the $1500 gross, if not put the difference in the job keeper payroll item as a lump sum, then produce the pay as normal.  If the employee is on a regular weekly wage then and will always be under the $750 a week then you can add the difference to each pay making it up to the $750 per week.  This is advisable if a casual worker, who might get a very small pay on the first week of the fortnight you could always top up their pay a little say $200, then the balance of the $1500 top up on the second week, to even out the pay.
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Lorrain Zimmerman

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That is how I have done it you may have to recalculate JK for some employees but it will work.
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GENEVIEVE

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Hello,
Thank you. That seems to make sense. I think I've managed to do all the changes on my accounting side. I just want to confirm one thing about STP reporting please.

You say: "Link it to your payroll expense account and part of Gross payments for STP reporting."

Does that mean that when putting the information in Reckon STP it is not done in such a way that the ATO can distinguish between the actual wages (for work done) and the top up they are subsidishing? I would have thought the two numbers go in separate STP fields so the ATO how much actual pay is, not as one amount. 

I appreciate your help. Thank you.
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Kevin Russell, Accredited Partner

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Kwik I spoke to Reckon Tech Support late Friday I was told the implementation was proceeding and there would be a KB early this week. I am not going to jump the gun here until I have all the information. And thats what I am advising the businesses with which I I work. The ATO haven't finalized anything. 
Hi Genevieve

ATO will need to know when it starts & stops, this is being worked out for the STP reporting side, if you are micro employee and don't STP report yet, it can be reported manually to the ATO.  Jobkeeper is a taxable income to the employee, but you don't have to include super, it forms part of the gross wage that is taxable.  The employer is not reimbursed per $$, it is reimbursed per eligible employee, so for the employees that earn more than $1500 a fortnight, there is no top up, but the employer still gets the $1500 if the employee is eligible.

ATo need to know who is eligible and when it starts, they can tell from stp and Gross column that the employee got $1500 or more in the fortnight.
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Amy Evans

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If you are a non stp reporting business how do you record the ATO reimbursement into the system when it is paid. Also how should you record the job keeper payments as we dont run a payroll we take Drawings?