The response to the Australian Government’s JobKeeper scheme has been staggering. It is great to see so many companies wanting to take advantage of a valuable initiative during such difficult times.
Although the JobKeeper legislation only became legislation on 9 April, our team has been working hard behind the scenes to get the required changes live to help our customers. We have been doing all we can to stay up to date with the ATO’s requirements to ensure the uptake and reporting runs as smooth as possible.
Before you get started, we have created a detailed JobKeeper guide to help you on your way.
I have just become aware of JobKeeper and I don’t know what to do?
If you are unsure of what you need to, below are some key milestones:
- Check – Check your company meets the eligibility requirements stated on the ATO website, including the turnover test.
- Enrol – Enrolments for the JobKeeper scheme via the ATO Business Portal or your BAS/Tax Agent are now open. The ATO suggests enrolling by 30 April, however, it will remain open until the end of May.
- Nominate – Start sending out the JobKeeper Employee Nomination Notice or your own employee nomination notice form to all eligible employees using Definitiv’s enhanced Announcement Feature (more information below) or an alternative method. It is important to note, an employee will need to agree to the notice before 31 May to be included in the month of April and May, i.e. first four fortnightly JobKeeper payments.
- Declare – Each month, starting 4 May, you will need to make a monthly declaration to the ATO via the ATO Business Portal or your BAS/Tax Agent reconfirming the reported eligible employees, if there are any changes in the reported eligible employees (i.e. new starters or finishers) as well as your current and projected GST turnover. You will need to fill in the declaration before the ATO will release payment for the past month.
For more information, read the ATO’s employer JobKeeper guide.
I have had confirmation our company is eligible for JobKeeper, what do I do in Definitiv to get this paid?
Depending on your business requirements your employees will fit into one or more of the scenarios below:
Scenario #1: Employees only receiving the JobKeeper payment
A common example of this scenario is if you have employees stood down without pay.
To get started, you will need to do the following;
1. Create a new Payment pay item;
2. Link the pay item to the ATO category “JobKeeper Top Up” (see the example screenshot below); and
3. Use this pay item for the full JobKeeper amount (this will depend on your pay cycle, keeping in mind you will need to ensure it equates to a minimum of $1,500 per ATO pay fortnight).
Hot Tip: We recommend this pay item be set up on the employee’s master record under Additions & Deductions with a cease date of 27 September 2020.
Scenario #2: Employees are earning below $1,500 and require a JobKeeper top up payment
This scenario is applicable when you have employees who are still working but earning less than $1,500 per fortnight.
1. Create a new Payment pay item;
2. Link the pay item to the ATO category “JobKeeper Top Up” (see the example screenshot below);
3. Calculate the employee’s pay as normal; and
4. If below $1,500 across the fortnight, use this new JobKeeper Top Up pay item to bring the employee’s total payment up to $1,500 a fortnight.
Note: The JobKeeper scheme details employees must receive no less than $1,500. If there is any shortfall to an employee’s normal income this needs to be reported separately through STP. Although this is reported separately, the shortfall must be paid to the employee.
Hot Tip: We recommend assigning a new GL code to this pay item, so these top-up payments can be reconciled on the company’s balance sheet back to the full amount reimbursed by the ATO each month (similar to the government paid parental leave).
Scenario #3: Employees are receiving their full payment in line with their employment agreement with JobKeeper making up the first $1,500
If you are paying any eligible employees normally and their earnings are above $1,500 a fortnight, the ATO does not require you to report this amount separately. However, if you wish to reconcile the reimbursement from the ATO against the employee’s timesheet costing you will need to create a new Accrual pay item:
1. Create the JobKeeper – Accrual pay item (see the example screenshot below); and
2. Add this pay item to the employee’s master file record under Additions & Deductions as an ongoing accrual up until the 27 September 2020.
The new pay item will be used to normalise the payment across the employee’s costing over the pay cycle. Having this as an accrual pay item allows the JobKeeper payment to be credited proportionally against the costing dimensions assigned to the employee’s work schedule.
The full salary/wages payment will be paid as ordinary time earnings, the accrual simply helps with the reporting of the cost that the JobKeeper payment has supported.
Hot Tip: Make sure you check each state’s payroll tax treatment of JobKeeper payments. WA and SA have confirmed that payments subsidised by the JobKeeper are exempt.
What if I have already paid employees for April; how do you claim JobKeeper?
Don’t worry! There’s nothing that can’t be fixed!
1. Firstly, ensure you have enrolled as an employer;
2. Obtain written/digital consent from your eligible employees in relation to the JobKeeper payments;
3. Create a new pay run for the same dates of the previously completed pay runs that are now required to include JobKeeper payments; and
4. Make the necessary manual corrections using the pay item for those requiring the JobKeeper Top Up.
How do I identify my employees that are entitled to JobKeeper?
This is all taken care of through the Definitiv platform!
We have been working hard behind the scenes to ensure our customers manage this all through Definitiv using the Announcement feature.
As part of this update, we have also added a section to the Tax Information screen under the employee’s master file record so you can identify whether an employee is eligible and has agreed to receive the JobKeeper payment.
The date the employee accepts the JobKeeper payment will then automatically drive the fortnight the employee falls under based on the below calendar for ATO reimbursement.
Remember, an employee now has until 31 May to agree to be nominated and included within the first four fortnights. However, you will need to make payment by 8 May for the first two fortnights.
Can we have employees accept a JobKeeper Employee Nomination Notice through Definitiv?
The short answer is yes! We have added an enhancement to our Announcements feature to make your life easier for eligible JobKeeper employees.
What are the enhancements and how do they work?
1. Ability to request consent: With our new “Requires Acknowledgement & Response” option, you will now be able to send your own employee nomination form to employees to read through and provide consent, if they wish to receive the JobKeeper payment.
Setting it up in Administration
Employee Mobile Experience
2. Automatically saved documents: Once an employee has acknowledged, agreed to receive the JobKeeper payment and signed the acknowledgment, the signed employee nomination form will be automatically saved on the employee’s master record under the Document Management screen.
Please be aware, once an eligible employee has agreed via the Announcements feature, you can then update their eligibility and commencement date within the new JobKeeper Eligibility section under the Tax Information screen on an employee’s master record.
We are also working towards a few more enhancements to the Announcements feature that won’t be too far away, these include;
- Reporting upgrade;
- Configurable questions and responses; and
- Automatically add incumbents to past announcements based on the dimensions previously saved, i.e. company induction for new hires.
We know that as wonderful as the JobKeeper scheme is, it can be overwhelming. If you need assistance with implementing the JobKeeper requirements within Definitiv our consulting team is here to help.
To make it simple, we have a fixed consulting fee of $250 (exc GST) for all customers that includes the following services;
- Set up all required pay items;
- Update of all your confirmed eligible employees as eligible and the date of acceptance by the employee in the new JobKeeper Eligibility section under the Tax Information screen; and
- Add the required JobKeeper pay items to all applicable employees under their Additions & Deductions
If you require assistance with processing any JobKeeper payment corrections, these can be quoted to you on request.
Please note, all JobKeeper consulting must be logged via the Definitiv Help Desk as a consulting ticket. The consulting can only be scheduled in for completion once we receive a signed work order.
Information provided in this article is general information, not legal advice and should not be relied upon as such. Definitiv does not accept liability for any loss or damage arising from reliance on the content of this article.
Please be aware, information within this article is correct as of 28 April 2020.