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Set up and manage JobKeeper payments

Learn how to record JobKeeper 2.0 payments in the pay run.

This process will ensure you are using the correctly named pay categories without having to create the pay categories yourself. 

Note: This article will refer to fortnights as the ATO's predefined fortnight dates as listed here. Regardless of how often you pay employees, or the pay period start and end dates, the JobKeeper payment rate per fortnight applies to the pay dates within the ATO's fortnights and from which fixed fortnight the payment applies.

JobKeeper subsidy duration

JobKeeper 2.0 will continue until 28 March 2021. In addition to a lower payment amount, you will have to assign Tiers to your JobKeeper eligible employees, based upon the average hours worked per week in a reference period, rather than paying a flat payment 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.

How to classify employees against a tier

Each employee must be classified against a tier as it determines the amount of top-up payment required against each employee. The tier level is determined by hours worked per week in either one of the following reference periods: the four weeks ending at the end of the most recent pay cycle before 1 March 2020 or before 1 July 2020.

Your employee only needs to satisfy the 80-hour threshold in one of the 28-day reference periods. If they satisfy it in one reference period, they do not need to satisfy the other.

Employees will satisfy the 80-hour threshold if, in their 28-day reference period, the total of the following is 80 hours or more:

  • actual hours worked, and/or
  • hours they were on paid leave, and/or
  • hours they were paid for absence on a public holiday.

If your eligible employee satisfies the 80-hour threshold, they will be classified under Tier 1. If they do not meet the 80-hour threshold, they will be classified under Tier 2.

Since classifying the tier relies on past pay run information, so an employee’s Tier will not change during JobKeeper 2.0 unless it was incorrectly reported in the first place.

The ATO has also provided alternative reference periods that can be used if the standard periods are not appropriate. More information on alternative reference periods can be found here.

Assign JobKeeper tier

This action is mandatory for all new and existing eligible employees. If the eligible employee's tier is not reported, the ATO will not reimburse for that employee. Once each employee has been assessed and tier determined, record this in the pay run (so it is then reported via STP):

  1. Go to the pay run, select the employee's name and select the green Actions button
  2. Select Add JobKeeper Payment then select Assign JobKeeper tier from the options dropdown list
  3. Select JOBKEEPER-TIER1 or JOBKEEPER-TIER2 from the dropdown
  4. Select Finished 
  5. Select Save 

Fix an incorrect JobKeeper tier

This action is only required when the employer has reported the incorrect Tier for an employee. It is important to ensure the correct tier is reported because each tier level has a different payment rate and the ATO will only reimburse you based on what tier you classify your employee.

To reverse a previously reported incorrect tier:

  1. Go to the pay run, select the employee's name and select the green Actions button
  2. Select Add JobKeeper Payment and then select Report incorrect JobKeeper tier from the options dropdown
  3. Select JOBKEEPER-TIER1X or JOBKEEPER-TIER2X from the dropdown
  4. Select Finished  

Note: If you incorrectly reported an employee's tier as 1 and they should be on tier 2, you would select "JOBKEEPER-TIER1X" from the dropdown list.

If you incorrectly reported an employee's tier as 2 and they should be on tier 1, you would select "JOBKEEPER-TIER2X" from the dropdown list.

Important takeaways:

  • An employee's tier cannot move from one to the other during JobKeeper 2.0. The only exception here is if the tier was reported incorrectly in the first place. 
  • We automatically apply a rate of $0.01 to the JobKeeper tier pay categories. This pay rate is required so that the tier classification is included in the pay/update event to the ATO.
Important: If you change the rate to anything less than $0.01 it will not report via STP which means you have missed the compulsory step of notifying the ATO of the employee's tier level.
  • The JobKeeper tier pay categories are system generated and set up in accordance with ATO requirements. Changing the pay category name or payment classification may result in payment delays by the ATO or no reimbursement at all.

JobKeeper Start

If a JobKeeper 2.0 eligible employee is to start receiving payments on or after 28 September 2020, then you will need to report a JOBKEEPER-START-FN line in the pay run for them. If you have eligible employees who also received JobKeeper 1.0 payments (i.e. have been reported with JOBKEEPER-START-FN1 to FN13), then you do not have to report JobKeeper Start for them again - you only need to report their JobKeeper Tier.

If an eligible employee had a JOBKEEPER-FINISH-FN1 to 13, then you will have to report JOBKEEPER-START-FN in the pay run again in order for the ATO to trigger JobKeeper payments for them. This only needs to be reported once (only exception to this rule is detailed below in the important takeaways section) and should be done within the fortnight period the payment commences.

To determine what fortnight you commenced paying an employee the JobKeeper payment, refer to the ATO's JobKeeper fortnight calendar. Cross-check the dates allocated to each fortnight with the date you paid the employee. For example, if you paid an employee the JobKeeper payment for the first time on the 30 September (ie pay date was 30/9/20), this means the payment was made in FN14. To record this in the pay run (so it is then reported via STP):

  1. Go to the pay run, select the employee's name and select the green Actions button
  2. Add JobKeeper Payment and then select JobKeeper Start 
  3. Select JOBKEEPER-START-FN14 from the JobKeeper period dropdown
  4. Select Finished 
  5. Select Save.

Important takeaways:

  • You cannot forward date the fortnight start entries in the pay run, but you can add it to a subsequent pay run if you've already started paying your eligible employees JobKeeper. E.g. if your pay run's pay date is 30 September you cannot, in that pay run, apply a fortnight start of "FN15" to indicate an employee will start receiving payments in the fortnight period 12 to 25 October. If you select a fortnight start that is after the period end date of the pay run you are processing you will the see the following warning and will not be allowed to save.
  • The following scenarios are valid exceptions where the fortnight start can be reported more than once:
    • If you incorrectly report a fortnight start to be later than what it actually was, you will need to report the correct fortnight again in the next pay run. To do this follow the normal instructions of adding the JobKeeper start.
    • If you incorrectly report a fortnight start to be earlier than what it actually was, you will need to report a fortnight finish (applying the same FN as the incorrect fortnight start) and then report the correct fortnight start in the next pay run. To do this follow the normal instructions of adding the JobKeeper start and JobKeeper finish.
    • Where an employee's JobKeeper payment ceased due to ineligibility, for e.g. they were on a worker's compensation absence, paid parental leave, etc) the fortnight finish should have been recorded in the relevant pay run. If the employee returns/becomes eligible for JobKeeper again, you will need to notify of the new fortnight start in the relevant pay run. To do this follow the normal instructions of adding the JobKeeper start.

JobKeeper Finish

Similarly, with the JobKeeper start fortnight, the ATO must be made aware when JobKeeper payments cease for any employee, as they may no longer be eligible. The ineligibility may be due to:

  • Workers’ compensation absence;
  • Paid parental leave;
  • Cessation of employment; or
  • Change of citizenship, visa, personal circumstances.

The ATO only need to be notified where eligibility ceases during JobKeeper 2.0. If you have already reported finish fortnights during JobKeeper 1.0 for some employees, please do NOT report this again.

Additionally, if the employer is not eligible for JobKeeper 2.0, there is no requirement to report finish fortnights for the employees who were receiving JobKeeper payments. Rather, the employer just simply needs to stop reporting JobKeeper in the pay run. 

To determine what fortnight you ceased paying an employee the JobKeeper payment, refer to the ATO's JobKeeper fortnight calendar. Cross-check the dates allocated to each fortnight with the date you stopped making the payment to the employee. Then select the fortnight period after to be the fortnight finish period. E.g. if you last paid the employee the JobKeeper payment on the 30th of October (i.e. pay date was 30/10/20), this means the last payment was made in FN16. However, the employee is technically no longer eligible from the FN17 period. To record this in the pay run (so it is then reported via STP):

  1. Go to the pay run, select the employee's name and select the green Actions button
  2. Select Add JobKeeper Payment
  3. Select JobKeeper finish from the options dropdown list 
  4. Select JOBKEEPER-FINISH-FN17 from the JobKeeper period dropdown list
  5. Select Finished
  6. Select Save 

You can record this in the same pay run that the employee is receiving their last JobKeeper payment.

To add a JobKeeper payment in the pay run:

  1. Go to the pay run, select the employee's name and select the green Actions button
  2. Select Add JobKeeper Payment

A drop-down menu under JobKeeper options will appear:

  • JobKeeper top-up:Top up an employee's pay (where their original earnings are less than the payment rate for their Tier). 
  • JobKeeper start: Record the 'start' fortnight the JobKeeper payment is commencing for each affected employee. This MUST be reported for each eligible employee and only needs to be reported once.
    • During JobKeeper 2.0, you only need to record a JobKeeper Start for employees who start to receive JobKeeper from 28 September onwards. You are NOT required to re-report existing eligible employees whose start fortnight has already been reported and still applies. 
  • JobKeeper finish: Record the 'finish' fortnight the JobKeeper payment is ceasing for each affected employee. This only needs to be reported if an employee ceases to be eligible for the JobKeeper payment from 28 September 2020 onwards.
    • You are NOT required to re-report JobKeeper finish for employees in the following scenarios:
      • JobKeeper Finish fortnight has been reported previously and still applies
      • Were eligible for JobKeeper 1.0 but are not eligible for JobKeeper 2.0, and so received their last payment in FN13. In this instance, simply stop reporting any JobKeeper top up.  
  • Assign JobKeeper tier: This MUST be reported for all eligible employees (new and existing) and only needs to be reported once. If this action is not completed, you will not be reimbursed by the ATO.
  • Report incorrect JobKeeper tier: This action is only required where an employee’s tier was initially reported incorrectly. If this action is performed in a pay run, you must then also select add another option, then complete an Assign JobKeeper tier to report the correct Tier for the affected employee.  

JobKeeper Top Up

If an employee’s pay run earnings is the same amount or more than that of the relevant Tier payment rate, continue to pay the employee all earnings as normal and include all entitlements to leave accrual and superannuation. There is no top up or change required to the employee's pay in this instance. Rather, the JobKeeper payment will be a supplement for the employer.

You only need to top up an eligible employee's pay if they earn less than the relevant Tier payment rate per fortnight. In this instance, you would pay the employee all earnings and include all entitlements to leave accrual and superannuation as you normally would. Then, you will need to top up an amount being the difference between what the employee was paid and the relevant tier payment rate. For eg, an employee is classified as tier 1 and has been paid a gross earnings amount of $330 in the first quarter of the extension period. The employer would then be required to top up the employee's pay by $870 (being $1200 - $330). To do this:

  1. Go to the pay run, select the employee's name and select the green Actions button
  2. Select Add JobKeeper Payment
  3. Select JobKeeper top-up from the options dropdown
  4. Enter 870 in the Top up amount 
  5. Select Add and then Finished - The top up amount will then appear in the eligible employee's pay using a system-generated pay category that reflects the ATO's requirements:
  6. Select Save

Important takeaways:

  • Super is not calculated on any "top-up" earnings. It will be up to the employer if they want to pay superannuation on the "top-up" component of the JobKeeper payment.
  • This payment is subject to PAYG.
  • All state/territory authorities have confirmed that top-up payments are not liable for payroll tax. As such, all system JobKeeper related pay categories have the "Payroll Tax Exempt" checkbox ticked by default.
  • The JOBKEEPER-TOPUP pay category is system generated and set up in accordance with ATO requirements. Changing the pay category name or payment classification may result in payment delays by the ATO or no reimbursement at all. 

Once the pay run has been finalised, you must lodge the pay event to ensure the data has been transmitted to the ATO.

There are no new steps required when reporting JobKeeper payments - just follow the usual steps required to lodge pay events and/or update events.

JobKeeper Pay Categories

Once any of the above JobKeeper options are used in the pay run, the system will automatically create a pay category for that action, e.g. if you topped up an employee's pay, a system based pay category named "JOBKEEPER-TOPUP" will be added to your pay category list.

Please note of the following system created pay categories:    

  • System created pay categories will NOT automatically be created if you already have the applicable JobKeeper pay category set up AND that pay category is set up correctly. In this instance, the system will continue to use the pay category already set up;  
  • The "Name", "Units" and "Payment Classification" fields of the pay category are locked and cannot be edited. This is intentional - the ATO are very specific about how JobKeeper must be identified in STP reporting and so we do not allow any of the crucial settings to be changed;
  • By default the "Super Rate" field is set at 0% which is allowed by the ATO. If you want to pay super on the top-up payments,  change the rate from 0 to 9.5 in the Payroll Settings Pay Categories section;
  • All other fields in the pay category settings can be edited to suit the business' needs.   

On April 8th the JobKeeper Payment program passed into legislation.

The JobKeeper Payment per fortnight is paid to the employer as a supplement to assist with the payment of salary and wages and will be paid in arrears commencing from May 2020, with payments backdated from 30 March 2020.

For more information, we recommend that you visit the JobKeeper Payment webpage provided by the Australian Government.

How do I know if my business is eligible for JobKeeper?

The Australian Government has outlined the eligibility criteria here. If you are still unsure we recommend you reach out to your Accountant or Payroll officer.

Note: From May 4th onwards you will need to submit a monthly declaration to the ATO to reconfirm eligibility, for more information visit the ATO website

Note: You can calculate your turnover by running a Profit and Loss Comparison report.

How do I register for JobKeeper payments?

If you meet the above criteria you need to register for JobKeeper following the steps the ATO has provided.

How do I know if my employee is eligible?

The Australian Government has outlined the eligibility criteria here. If you are still unsure we recommend you reach out to your Accountant or Payroll officer.

A report has also been provided to assist you with this:

  1. Select Employees in the left hand menu
  2. Select the Reports tab
  3. Select JobKeeper Eligibility Report (located under Employee)
  4. Choose the appropriate filters and then select Run Report

Navigate to the Eligibility Status column to see whether the employee/s are eligible for the JobKeeper payment.

Next you'll need to nominate the employee/s, you will need to notify employees and have them complete an employee nomination notice.

This information will need to be provided to the ATO on a monthly basis, including the number of eligible employees employed by the business. The ATO has provided guidance on this.

Note: You will need to complete the employee nomination notices and pay your employees before April 30th to claim JobKeeper payments for April.

How to report JobKeeper payments through STP

For employees who are earning more per fortnight in gross earnings compare to eligible JobKeeper payment, nothing needs to change, you can continue to use the same the pay category and report STP as normal. You will only need to add the relevant start or finish JobKeeper pay category.  The process of adding the start or finish fortnight pay category is explained further below in the How to complete a pay run for JobKeeper section.

For those earning less than eligible JobKeeper payment per fortnight in gross earnings, you will need to create a "top-up" amount to bring their gross earnings up to the eligible amount per fortnight.  This top-up amount needs to be recorded as an allowance.

Note: You cannot forward date the start fortnight entries in the pay run, but you can add it to a later pay run if you've already started paying your employees JobKeeper (see the section at the bottom of this article for further explanation).

How to complete a pay run for employees under JobKeeper

There are different scenarios to consider in a pay run depending on the eligible employee’s gross fortnightly wages. If the employee is still completing their duties and working, then you still need to pay the employee for the work they are doing and the employee is to receive their entitlements.

If the employee’s earnings in the pay run you are processing will be more than eligible amount per fortnight, then continue to pay the employee all earnings and include all entitlements to leave accrual and superannuation as you usually would. The JobKeeper Payment will be a supplement for the employer. If this is the first time pay run you are claiming the JobKeeper subsidy for this employee you will need to add a pay category to indicate this.  

  1. While in the pay run select the employee you wish to add JobKeeper start to
  2. Click the Actions button and select Add JobKeeper Payment 
  3. Under JobKeeper options  select JobKeeper start
  4. Select the relevant JobKeeper Period 
  5. Select Finished 

Notes:

  • The reason you add $0.01 to the Rate field as STP does not report $0 earnings to the ATO.
  • Remember that you only need to notify the ATO of the start fortnight once for each eligible employee.

If the employee’s earnings are less than eligible amount per fortnight, then continue to pay the employee all earning and include all entitlements to leave accrual and superannuation as you usually would, plus an additional earnings line for the “top-up” amount totalling the difference between the JobKeeper Payment and the employee’s gross earnings. Use the JobKeeper Payment Pay Category for this. To add the JobKeeper pay category:

  1. While in the pay run select the employee you wish to add the payment to
  2. Click the Actions button and select Add JobKeeper Payment 
  3. Under JobKeeper options select JobKeeper top-up
  4. Enter in the relevant Top up amount 

If this is the first time pay run you are claiming the JobKeeper subsidy for this employee you will need to add an additional earnings line for the JobKeeper Start

  1. Select Add another option 
  2. Under JobKeeper options  select JobKeeper start
  3. Select the relevant JobKeeper Period 
  4. Select Finished 

Notes:

  • The reason you add $0.01 to the Rate field as the STP does not report $0 earnings to the ATO.
  • Remember that you only need to notify the ATO of the start fortnight once for each eligible employee
  • The JobKeeper payment will not accrual leave or superannuation.
  • The JobKeeper payment amount is based on a fortnightly pay run if you are paying your employee on a weekly or monthly basis you will need to adjust accordingly (see below).

If an employee has been stood down and is eligible for the JobKeeper Payment, then they will be entitled to the full JobKeeper Payment per fortnight. Learn how to manage a stand down.

  1. While in the pay run select the employee you wish to add the payment to
  2. Click the Actions button and select Add JobKeeper Payment 
  3. Under JobKeeper options select JobKeeper top-up
  4. Enter in the relevant Top-up amount 

If this is the first time pay run you are claiming the JobKeeper subsidy for this employee you will need to add an additional earnings line for the JobKeeper Start

  1. Select Add another option 
  2. Under JobKeeper options  select JobKeeper start
  3. Select the relevant JobKeeper Period 
  4. Select Finished 

Notes:

  • The reason you add $0.01 to the Rate field as the STP does not report $0 earnings to the ATO.
  • Remember that you only need to notify the ATO of the start fortnight once for each eligible employee
  • The JobKeeper payment will not accrual leave or superannuation.
  • The JobKeeper payment amount is based on a fortnightly pay run if you are paying your employee on a weekly or monthly basis you will need to adjust accordingly.

How to work out your JobKeeper Start Number

The JobKeeper start number is determined based on the 13 fortnightly period outline below by the ATO, your start date is based off the first time you paid your employees, for example, if you first paid your employees on the 3rd of April your JobKeeper period would be JobKeeper-Start-FN01 (regardless of whether you are paying your employees Weekly, Fortnightly or Monthly)

FN Date Range Allowance Description
01 30/03/2020-12/04/2020 JOBKEEPER-START-FN01
02 13/04/2020-26/04/2020 JOBKEEPER-START-FN02
03 27/04/2020-10/05/2020 JOBKEEPER-START-FN03
04 11/05/2020-24/05/2020 JOBKEEPER-START-FN04
05 25/05/2020-07/06/2020 JOBKEEPER-START-FN05
06 08/06/2020-21/06/2020 JOBKEEPER-START-FN06
07 22/06/2020-05/07/2020 JOBKEEPER-START-FN07
08 06/07/2020-19/07/2020 JOBKEEPER-START-FN08
09 20/07/2020-02/08/2020 JOBKEEPER-START-FN09
10 03/08/2020-16/08/2020 JOBKEEPER-START-FN10
11 17/08/2020-30/08/2020 JOBKEEPER-START-FN11
12 31/08/2020-13/09/2020 JOBKEEPER-START-FN12
13 14/09/2020-27/09/2020 JOBKEEPER-START-FN13

How to notify the ATO if you stop JobKeeper payments for an employee

If there is an employee who is no longer eligible for the JobKeeper payment the employer must also notify the ATO via STP. To do this:

  1. While in the pay run select the employee you wish to add the payment to
  2. Click the Actions button and select Add JobKeeper Payment 
  3. Under JobKeeper options select JobKeeper finish
  4. Select the relevant JobKeeper Period 
  5. Select Finished 

Notes: 

  • The reason you add $0.01 to the Rate field as the STP does not report $0 earnings to the ATO.
  • Be sure to add the JOBKEEPER-TOPUP category if applicable for this employee.
  • The JobKeeper payment will not accrual leave or superannuation.
  • The JobKeeper payment amount is based on a fortnightly pay run if you are paying your employee on a weekly or monthly basis you will need to adjust accordingly.

For weekly pay runs:

  • The JobKeeper payments would calculate to $750 per week.
  • Use the same logic when determining the JOBKEEPER-START-FNXX or JOBKEEPER-FINSH-FNXX e.g. depending on when the employee was first or last paid.

For monthly pay runs:

For example: The JobKeeper payments would calculate to either:

a)$3250 per month or

b) $3000 per month for March-July and $4500 per month for August

Notes: 

  • Either way you choose, the ATO will be reimburse you based on method a).
  • Even if you average out the payment, use method (b), you will not be out of pocket overall because you’ll be reimbursed the exact same amount as you'll have paid the employee. If you don’t want to be out of pocket the $250 leading up to August then you should just pay the employee as per ATO reimbursement method (a).

No matter what pay schedule you use:

  • Still set up and apply the appropriate "fortnightly" pay category to let the ATO which fortnight you commenced and finished paying the employee/s, ie. JOBKEEPER-START-FNXX and JOBKEEPER-FNISH-FNXX - it's the name on the pay category that's informing the ATO, not the dates on or length of the pay period it's reported in.

If you've already processed pay runs with paid dates on or after 30/3/20 you'll need to complete two steps

  1. Adjust the pay category used to pay the employee so far
  2. Notify the ATO of JobKeeper start fortnight

Adjust the pay category used to pay the employee so far

 

If you have already created a new pay category to pay the topup amounts for pay periods up to now then all you have to do is change the name on the pay category you've been using to the name the ATO has provided ie. JOBKEEPER-TOPUP

To edit a pay category name:

  1. Select Employees from the left hand menu
  2. Select Payroll Settings
  3. Select Pay Categories 
  4. Select the pay category you created earlier
  5. Update the name to JOBKEEPER-TOPUP then select Save

The next time you pay employees using the pay category the YTD earnings will be properly reported to the ATO.

If you've used an employee's"usual" pay category for the top up earnings to date you'll need to add the JobKeeper Topup amount in the next pay run, reverse the total top-up amount to date out of the "usual" pay category and put them in again using JobKeeper Topup (Located under the by selecting the Action button and then selecting Add JobKeeper Payment.

  1. Select the employee's name in the next pay run to expand the pay run record
  2. Click on the Actions button and select Add earnings
  3. Choose the existing pay category and enter a negative number of units to reverse the total top-up earnings out to date
  4. Click the Actions button and select Add JobKeeper Payment 
  5. Under JobKeeper options select JobKeeper top-up
  6. Enter in the relevant Top-up amount 

Note: the net effect of these two earnings lines will be $0 but when you lodge the pay event the payments will be correctly reported to the ATO.

Notify the ATO of JobKeeper start fortnight

You'll then need to notify the ATO of the fortnight you wish to start claiming JobKeeper for:

  1. Click the Actions button and select Add JobKeeper Payment 
  2. Under JobKeeper options  select JobKeeper start
  3. Select the relevant JobKeeper Period 
  4. Select Finished 

 Note: If you're claiming JobKeeper for April you will need to notify the ATO and pay your employees by April 30 (the same logic applies for subsequent months).  JobKeeper Start is used to notify the ATO when you're claiming the subsidy from, it's the name on the pay category that's informing the ATO, not the pay period it's reported in.

 

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