If your organisation is eligible and you have eligible employees, it is now time to process your JobKeeper Top-up payments NOW
By now you have already:
- Determined if your organisation is eligible for JobKeeper Payments – click here for details
- Determined which employees are eligible – click here for more details
- Determined which employees will require a JobKeeper Top-up payment
- Enrolled your organisation with the ATO – see our previous blog for more details.
Now it is time to set up your payroll settings & process pays in your Xero accounting system
The steps are:
- Review the JobKeeper Pay Item in Xero payroll
- Select the eligible employees in Xero
- Calculate the JobKeeper Top-up payments for applicable employees
- Update the Pay Templates for employees who are entitled to JobKeeper Top-up payments
- Pay any catch up Top-up payments for past periods
- Pay employees including to JobKeeper Top-up payments going forward
1.Review the JobKeeper Pay Items in Xero payroll
- Xero has already updated your pay Items to include a new Pay Item – JobKeeper Payment Top-up. It is an Allowance with a special new ATO Allowance type.
- Find it in your Payroll Settings under Pay Item Tab.
- Open the JobKeeper Payment Top-up and:
- Adjust the Expense account if you wish.
- UnClick the Exempt from Superannuation checkbox if our organisation will pay super on the top-up payment. This is not necessary
- Click here for Xero’s support pages on this – it is very clear
JobKeeper Top-up payments and Salary Sacrifice
- The ATO states that JobKeeper Top-up Payment may be paid to an employee in cash or as a fringe benefit or an extra superannuation contribution where the employee and employer agree. Click here for this ATO document FYI
- In this case, after receiving proper documentation for this additional salary sacrifice, we suggest that you process this additional Salary Sacrifice as any other.
- Here is an example our suggested process for entering a JobKeeper Top-up payment where 40% is to be Salary Sacrificed into their usual MEA Liability account.
2. Select the Eligible Employees in Xero – before you process any pays!!
- Once you have determined and have the correct documentation for the eligible employees, you will need to identify them in Xero.
- Eligible employees must be selected in Xero regardless of whether they will receive a Top-up payment or not.
- The details of these employees will flow to the ATO when you process pays and file with the ATO using the STP function.
To do this click on Pay Employees in the Payroll section
Then click on Visit the Xero Support page
- Click on Enrol employees in the Enrol employees for JobKeeper payments
- Click Start JobKeeper against every eligible employee
- (NB make sure that you have documented that all the Employee Eligibility criteria have been met). Also, note the this is all eligible employees, not just the ones who will receive the extra Top-up payments.
- Selecting these employees, paying these employees and subsequently filing the pay run information with the ATO provides the information that the ATP requires to show them the payments to eligible employees.
3. Calculate the JobKeeper Top-up Payments for eligible employees who receive less than $1500 per fortnight
4. Update the Pay Templates for employees who are entitled to JobKeeper Top-up payment.
Use the Pay Item – JobKeeper Payment Top-up and additional MEA deduction or any other Salary Sacrifice arrangements as required as mentioned in point 1 above
5. Pay any catch up Top-up payments for past period
- Use an Unscheduled Payruns for these.
- Ensure you use Payment dates with in the 2 fortnights from 30 March – 26 April
- If the pay calendar is fortnightly, I recommend that the Top-up payments are processes in 2 fortnight periods with the payment dates within both fortnights – 30 March – 12 April, 13-26 April.
- NB the dates the ATO is referring to in these payments are the Payment Dates. They are not referring to the Period Worked dates
- Make sure that these pays are filed using STP
6. Pay employees including to JobKeeper Top-up payments going forward
Make sure that these pays are filed using STP
From 4th May Complete the monthly declaration via your pre-populated Business Portal Employee Listing
Just in case you missed it head over to our blog about Enrolling for the JobKeeper Payment.