IMPORTANT INFORMATION ABOUT Processing April pays in Xero for JobKeeper
– must be done by 8 May
– must be done before the next step – Monthly Declaration – (will be discussed later)
To receive the correct JobKeeper subsidy payments from the ATO, pays will need to be processed correctly in Xero before you make your Monthly Declaration (see our next blog).
Our Benkorp Team has created some important highlights, instructions and links to the detailed steps, for you to follow and use.
There are 2 highlight sections below (A and B) and instructions with links included.
A. BEFORE processing your JobKeeper pays in Xero you must have already completed these:
- Determined if your organisation is an eligible employer
- Determined your eligible employees
- Enrolled for JobKeeper on the ATO Site – (Please note the Commissioner has extended the time to enrol for the initial JobKeeper periods from 30 April 2020 until 31 May 2020. If you enrol before 31 May, you will still be able to claim for the fortnights ending in April and May provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate dates for each fortnight.)
- Calculated the JobKeeper Top-up payment amounts, if applicable, for eligible employees
Please click here for more details on these points above.
B. In Xero
Before processing JobKeeper pays in Xero you need to:
- Enrol your Eligible Employees for JobKeeper payments
- Set up or update JobKeeper pay items if required
- Update Pay Template for
Please click here to read this Xero support page for the above points
The next steps in Xero are to
1. Assign the JobKeeper Top-up pay item to the Pay Template for those employees who are eligible for JobKeeper Top-up payments
2. Process JobKeeper pays for April pays that have already been processed in Xero.
This is for all eligible employees – regardless of whether they will get a JobKeeper Top-up or not
Details for steps 1 & 2
1.. Assign the JobKeeper Top-up pay item to the Pay Template for those employees who are eligible for JobKeeper Top-up payments
- This is for Eligible employees earning less than $1500 per fortnight.
- NB: there is no need to change the Pay Templates of employees who earn $1500 per fortnight or more.
- Click here for some great examples of how to do this.
- Click here for our example on how to set up JobKeeper Top-up pays for ministers
2. Processing JobKeeper for April Pays that have already been processed in Xero.
This also assumes that you have already processed your normal April Pays.
- When referring to April, we are referring to the ATO’s April period of the 2 fortnights between 30 March – 26 April Pays
- When referring to these dates, these dates refer to Payment dates. They do not refer to “Period Worked” dates
- Click here for more information about the Frequency of JobKeeper payments in relation to your payroll calendars in Xero and the ATO JobKeeper fortnights
- You don’t need to change your pay periods in Xero to align with the ATO’s JobKeeper fortnights
There are 3 VERY Important points within this step 2:
- Calculate the necessary JobKeeper Top-up amount you will need to pay – per pay calendar.
- Process the JobKeeper Top-up pays missed in April, in Xero
- Notify the ATO via STP of ALL Eligible employees.
1. Calculate the necessary JobKeeper top-up amount you will need to pay – per pay calendar.
- If the employee is paid weekly, and already paid $350 Gross wages, then the JobKeeper Top-up amount, before tax, will be $400
- If the employee is paid fortnightly, and has not received any wages between 30 March & 26 April, then the JobKeeper Top-up amount, before tax, will be $1500
- If the employee is paid monthly, and already paid $2500 for Gross wages paid between 30 March & 26 April, then the JobKeeper Top-up amount, before tax, for April will be $1000
Click here for detailed steps & examples
2. Process the JobKeeper Top-up pays missed in April, in Xero
NB: It is best to process the JobKeeper Top-up pay for each pay calendar for each employee as the top-up amounts may vary from week-to-week and the tax will be calculated correctly in Xero.
Click here for steps on Processing JobKeeper Top-up pays missed in April
Some special notes:
- Make sure that you date these unscheduled payruns on the usual Payment Date between 1-26 April.
- Repeat the above process for the JobKeeper Top-up-pay for each employee as required, and
- then post the pay run, and
- then file it with STP, and
- then you will also need to repeat this process for each applicable pay period.
- When you file with STP, it will update the earnings reported to the ATO for the first two JobKeeper fortnights (30 March – 12 April and 13 April – 26 April). You must pay these adjustments by 8 May 2020 to qualify for the refund of the first 2 JobKeeper periods.
3. CRITICAL – Notify the ATO via STP of ALL Eligible employees – CRITICAL
If JobKeeper Eligible employees’ have already been paid before they have been enrolled for JobKeeper in Xero, you will need to:
- run $0 unscheduled payrun(s) for each pay Calendar that includes all eligible employees, regardless of whether they get a JobKeeper Top-up payment or not.
- Date this Payrun 26 April, and
- file these with ATO via STP
- This is only necessary for this first JobKeeper month
NB all these adjustments must be completed by 8 May 2020 to qualify for the refund of the first 2 JobKeeper periods.
Click here for more detailed steps on processing April pays & Unscheduled Payruns.
Benkorp is working hard to help small & medium not-for-profit organisations and particularly Australian Churches during this difficult time. Our aim to inform you about these great government benefits as clearly and as practically as we can. Please note that this information has only just been legislated and is changing and is still being clarified as we write and therefore subject to change. We are doing our best to keep up to date and keep you informed as quickly as possible.
If you require any help with any of these steps, please don’t hesitate to send us an email at [email protected]
Still unsure about the eligibility of you as an employer or your employees? Read our blogs: