Fix JobKeeper payment errors

This article will help you to correct JobKeeper errors made either in the pay run or the pay category setting configuration.

Important information:

• If you have more than one error type to fix, we strongly suggest you correct all errors first, THEN lodge an update or pay event. Much easier to keep track of what's happening this way.
• Make sure to lodge an update or pay event where needed to report the fixes via STP. If you don't do this, you will be at risk of not getting reimbursed by the ATO. Additionally, if you have lodged an event but it has failed you need to lodge it again.

A breakdown of errors and solutions is as follows:

• JobKeeper related pay categories are named incorrectly
• Payment Classification setting of JobKeeper related pay categories are incorrect
• Incorrectly using "JOBKEEPER-START-FNxx" pay categories to report "top-up" amounts
• Reporting employee fortnight start and/or finish periods using the incorrect rate or number of units
• Claiming JobKeeper payments for eligible employees but not paying/topping up eligible employees to the Tier's requirements
• General corrections to incorrect reporting of JobKeeper fortnight start periods
• General corrections to incorrect reporting of JobKeeper fortnight finish periods
• Incorrectly using normal earnings pay categories to report "top-up" amounts

JobKeeper related pay categories are named incorrectly

The ATO are very strict about the naming conventions for JobKeeper pay categories.  Basically, if you set this up another way than what the ATO has specified (a) your reimbursements will be extremely delayed or (b) you won't receive any reimbursements at all.

The pay category naming requirements are as follows:

1. For topping up payments to the required fortnightly amount, the pay category name must be JOBKEEPER-TOPUP;
2. For notifying the ATO of the eligible employee's fortnight start, the pay category name must be JOBKEEPER-START-FNxx, where 'xx' = the fortnight period, ie 01, 02, 03, etc, up to 26.
3. For notifying the ATO of the eligible employee's fortnight finish, the pay category name must be JOBKEEPER-FINISH-FNxx, where 'xx' = the fortnight period, ie 01, 02, 03, etc, up to 26.

How can you check that you have named the pay categories correctly? We suggest generating a pay categories report for the period of 30 March to last pay in April. This will list all pay categories used in the pay run.

1. Go to Payroll.
2. Select the Reports tab (next to Payroll Settings) and then select Pay Categories Report (located under Payroll column).
3. Update the Date Range to 20/03/2020 to Today's date.
4. Select Run Report.

To fix the pay category names, you simply just need to edit the pay category itself. You do not need to do anything in the pay runs themselves. To do this:

1. Go to Payroll.
2. Select the Payroll Settings tab and then Pay Categories (located under Pay Run Settings).
3. Select the Name of the pay category you need to update.
4. Update and correctly enter the Name.
5. Select Save.

Be sure to repeat steps 3 to 5 or any other pay category you need to update.

Once you have done this for all incorrectly named pay categories, lodge an update event to report these changes to the ATO.

1. Go to Payroll.
2. Select the Reports tab and then select Single Touch Payroll (located under ATO Reporting).
3. Select Create Update Event.
4. Select the Pay Schedule then select Create.
5. Select Lodge with ATO.

Repeat this process for any other relevant pay schedules.

Payment Classification setting of JobKeeper related pay categories are incorrect

The ATO has made it clear that JobKeeper related pay categories must be classified Allowance (Other).  If the pay categories are incorrectly classified, the payments will not be itemised in the format required by the ATO and so may be completely missed.

To fix the pay category names, edit the pay category itself. You do not need to do anything in the pay runs themselves.

1. Go to Payroll.
2. Select the Payroll Settings tab and then Pay Categories (located under Pay Run Settings)
3. Select the Name of the pay category you need to update.
4. Select the dropdown for Payment Classification and select Allowance (Other).
5. Select Save.

Be sure to repeat steps 3 to 5 or any other pay category you need to update.

Once you have done this for all incorrectly classified pay categories, lodge an update event so that the updated correct pay categories are reported to the ATO.

1. Go to Payroll.
2. Select the Reports tab and then select Single Touch Payroll (located under ATO Reporting).
3. Select Create Update Event.
4. Select the Pay Schedule then select Create.
5. Select Lodge with ATO.

Repeat this process for any other relevant pay schedules.

Incorrectly using "JOBKEEPER-START-FNxx" pay categories to report "top-up" amounts

The purpose of the JOBKEEPER-START-FNxx and JOBKEEPER-FINISH-FNxx pay categories is to notify the ATO when an eligible employee has started receiving JobKeeper payments or when an employee is no longer eligible and payments have ceased. They are not intended to be used to report top-up payments.

The only way to report top up payments is by using the pay category JOBKEEPER-TOPUP.  This issue can only be rectified via a pay run. The specific steps to fix this are:

Step 1: Generate a pay categories report for the period of 30 March to the last pay period.. This will list the JOBKEEPER-START-FNxx pay categories and the earnings processed for each employee.

1. Go to Payroll.
2. Select the Reports tab and then select Pay Categories Report (located under Payroll).
3. Update the Date Range to 20/03/2020 to Today's date.
4. Select Run Report.

Keep note of all the earnings related to  JOBKEEPER-START-FNxx and JOBKEEPER-FINISH-FNx.

Step 2: Create a pay run (select the 'Create pay run with empty pays' options so that employee standard pays do not come through in the pay run). Also ensure if you're fixing April pays, that the period end and date paid is no later than 30 April.

1. Go to Payroll.
2. Select New Pay Run.
3. Ensure the Pay period ending and Date pay run will be paid are 30 April or earlier.
4. Tick the box Create pay run with empty pays.
5. Select Create.

Step 3: For each affected employee, you will need to reverse the top up earnings processed using the incorrect pay category. ( e.g. If you paid an employee a total of $2000 in top up pay for the month using the JOBKEEPER-START-FN01 pay category. Using the 'Add Earnings' action, you will need to assign the same pay category and enter the top up amount as a negative:

1. Select the Employee's Name.
2. Select Actions and choose Add Earnings.
3. Select the incorrectly used Pay Category.
4. Enter the amount allocated in the previous pay run/s as negative amount (e.g. -$2000).

Repeat this process for all relevant employees.

Step 4: For each affected employee, you will then need to add the top up earnings as a positive amount using the correct pay category. Using Add JobKeeper Payments, select the JOBKEEPER-TOPUP option and then enter the total top up amount (e.g. $2000)

1. Select the Employee's Name. 
2. Select Actions and choose Add JobKeeper Payment.
3. Select JobKeeper top-up from the JobKeeper options dropdown menu.
4. Enter the amount allocated in the previous pay run/s as positive amount (e.g. $2000).

The employee's earnings will then have 2 lines - one negative and the other positive - and gross earnings should be $0.

Step 5: Finalise the pay run. You don't need to publish the pay slips as this pay run is purely for adjustment purposes. You must lodge the pay event so that the corrections are reported to the ATO.

1. Select Finalise Pay Run.
2. Select Create pay event immediately.
3. Select Finalise.
4. Select Lodge with ATO.

Reporting employee fortnight start and/or finish periods using the incorrect rate or number of units

Employers must notify the ATO:

• When eligible employees commence receiving JobKeeper payments
• When employees no longer become eligible and stop receiving JobKeeper payments.

The other requirement when reporting start/finish periods is that the rate associated to the earnings line must be a minimum of $0.01. If you enter in amount less than this than there will be no trigger to the ATO to notify them of any commencement of payment and therefore any reimbursements from the ATO may be delayed or never received.

Some common errors are:

• Units of 1 and a Rate of $0 (which results in a $0 earning)
• Units of 0 and a Rate of $0 (which results in a $0 earning)
• Units of 0 and a Rate of $0.01 (which results in a $0 earning)
• Units of 0 and a Rate of $0.0.00001 (which results in a $0 earning as it will round down to the nearest cent)

As you can see, the above scenarios end up with a total of $0.00 and because $0 allowances are not reported through STP, which means the ATO will not be notified of your JobKeeper start (or finish) date/s.

This issue can only be rectified via a pay run. The specific steps to fix this are:

Step 1: Generate a pay categories report for the period of 30 March to the last pay period end in April. This will list the JOBKEEPER-START-FNxx and JOBKEEPER-FINISH-FNxx pay categories and the earnings processed for each employee. Keep note of all employees whose YTD earnings for these pay categories are $0.

1. Go to Payroll.
2. Select the Reports tab and then select Pay Categories Report (located under Payroll).
3. Update the Date Range to 20/03/2020 to Today's date.
4. Select Run Report.

Step 2: Create a pay run (select the 'Create pay run with empty pays' options so that employee standard pays do not come through in the pay run). Also ensure if you're fixing April pays, that the period end and date paid is no later than 30 April.

1. Go to Payroll.
2. Select New Pay Run.
3. Ensue the Pay period ending and Date pay run will be paid are 30 April or earlier.
4. Tick the box Create pay run with empty pays.
5. Select Create.

For each affected employee, you will need to add the $0.01 earnings against the relevant start/finish fortnight period.

Note: You only need to record the finish fortnight IF the employee is no longer eligible and hence does not receive JobKeeper payments anymore.

1. Select the Employee's Name .
2. Select Actions and choose Add JobKeeper Payment.
3. Select JobKeeper start (or JobKeeper finish if applicable) from the JobKeeper options dropdown menu.
4. Select the relevant JobKeeper period.
5. Select Finished.

The employee's pay will have 1 earnings line with 1 unit of $0.01, please do not change this.

Repeat this process for all relevant employees.

Step 3: Finalise the pay run. You don't need to publish the pay slips as this pay run is purely for adjustment purposes. You must lodge the pay event so that the corrections are reported to the ATO.

1. Select Finalise Pay Run.
2. Select Create pay event immediately.
3. Select Finalise.
4. Select Lodge with ATO.

Claiming JobKeeper payments for eligible employees but not paying/topping up eligible employees to the Tier's requirements

If you've paid an employee less than what is specified depending on their Tier, you will need to create a pay run and pay the difference as a top up amount.

The first quarter of JobKeeper 2.0 runs from 28 September 2020 to 3 January 2021, comprising 7 fortnights of:

• Tier 1: $1,200 per fortnight for those working 80 hours or more in any reference period; and
• Tier 2: $750 per fortnight for those working fewer than 80 hours in any reference period.

The second quarter of JobKeeper 2.0 runs from 4 January 2021 to 28 March 2021, comprising 6 fortnights of:

• Tier 1: $1,000 per fortnight for those working 80 hours or more in any reference period; and
• Tier 2: $650 per fortnight for those working fewer than 80 hours in any reference period.

The specific steps to rectify any underpayments are as follows:

Step 1: Create a pay run (select the 'Create pay run with empty pays' options so that employee standard pays do not come through in the pay run). Also ensure if you're fixing April pays, that the period end and date paid is no later than 30 April.

1. Go to Payroll.
2. Select New Pay Run.
3. Ensue the Pay period ending and Date pay run will be paid are 30 April or earlier.
4. Tick the box Create pay run with empty pays.
5. Select Create.

For each affected employee, you will need to add top up earnings to ensure you comply with the Tier's amount.

1. Select the Employee's Name.
2. Select Actions and choose Add JobKeeper Payment.
3. Select JobKeeper top-up from the JobKeeper options dropdown menu.
4. Enter the relevant Top up amount.
5. Select Finished.

Finalise the pay run. Seeing as you are adding earnings to an employee's pay, you must ensure you send the pay to the bank and publish the pay slips. You must also lodge the pay event immediately so that the corrections are reported to the ATO.

1. Select Finalise Pay Run.
2. Select Create pay event immediately.
3. Select Finalise.
4. Select Lodge with ATO.

 General corrections to incorrect reporting of JobKeeper fortnight start periods

1. If you've reported a fortnight start period for an employee who is actually not eligible, you would correct this by reporting the equivalent fortnight finish period. (e.g. if the ineligible employee was reported using the pay category JOBKEEPER-START-FN01, you must then use the JOBKEEPER-FINISH-FN01 pay category to cancel out the incorrect entry).
2. If you've incorrectly reported a later fortnight start period for an eligible employee, you would correct this by subsequently reporting the correct fortnight start period. The ATO will assume the earlier fortnight start period is the correct one, assuming no equivalent fortnight finish period has been reported.
3. If you've incorrectly reported an earlier fortnight start period for an eligible employee, you would correct this by reporting the equivalent fortnight finish period. (e.g. if the employee was reported using the pay category JOBKEEPER-START-FN04, you must then use the JOBKEEPER-FINISH-FN04 pay category to cancel out the incorrect entry. You would then have to record the correct fortnight start period.

General corrections to incorrect reporting of JobKeeper fortnight finish periods

1. If you've incorrectly reported a fortnight finish period for an employee who is actually still eligible, report the equivalent fortnight start period. (e.g. if the incorrect employee was reported using the pay category JOBKEEPER-FINISH-FN06, you must then use the JOBKEEPER-START-FN06 pay category to cancel out the incorrect entry).
2. If you've incorrectly reported a later fortnight finish period for an employee, report the correct (earlier) fortnight finish period. The ATO will assume the earlier fortnight finish period is the correct one where no unmatched fortnight start period has been reported.
3. If you've incorrectly reported an earlier fortnight finish period for an employee, you would correct this by reporting the equivalent fortnight start period.(e.g. if the employee was reported using the pay category JOBKEEPER-FINISH-FN04, you must then use the JOBKEEPER-START-FN04 pay category to cancel out the incorrect entry. If the fortnight period that the employee actually did finish has already passed, you would then have to record the correct fortnight finish period.

Incorrectly using normal earnings pay categories to report "top-up" amounts

If you started topping up employee pays before the ATO published specific instructions on how to report JobKeeper payments, you may have used the employee's default pay category to do this. You will need to make adjustments here and ensure the top-up payments are processed in the pay run using only the JOBKEEPER-TOPUP pay category.

Follow the instructions provided in the scenario Incorrectly using JOBKEEPER-START-FNxx pay categories to report top-up amounts to rectify this issue. Secondly, ensure you have reported the fortnight start periods for each eligible employee.

_{Content sourced from} Employment Hero