Overview of the reporting of JobKeeper Payments via Single Touch Payroll

Background:

Employers claiming the JobKeeper Payment (JKP) will need to consider how this is reported to the ATO. There are 3 options to notify the ATO and the focus of this article will be to provide links to guidance and resources on how this is achieved via Single Touch Payroll (STP) through the top 4 SME accounting systems (i.e. Xero, QuickBooks Online, MYOB AccountRight and Reckon Desktop). The other methods will not be covered. This document assumes that the reader has a certain level of background and understanding of the JobKeeper Payment scheme as set forth by the government and administered by the ATO.

For more information please refer to the ATO’s website (www.ato.gov.au/jobkeeper) and Saward Dawson’s collection of resources on the topic (www.sawarddawson.com.au/covid-19)

Most software providers are providing articles on how to record the JKP scheme in their software. MYOB, QBO and Reckon Accounts have similar instructions that require users to create the 3 types of JobKeeper pay items/categories (i.e. JOBKEEPER-TOPUP, JOBKEEPER-START-FNXX, JOBKEEPER-END-FNXX). Refer to their instructions and our general commentary below on how this is meant to work. With Xero, they have decided to automate the reporting of JKP starting dates and ending dates for each employee, this actually makes tackling JobKeeper payments in Xero more straightforward than the other software providers. Xero have also provided a interactive checklist/landing which assist with streamlining what employers need to take note of and do based on your own data file (e.g. providing a list of potentially relevant employees to the user for consideration).

General observations and comments on how this will be tackled via STP:

According to the ATO’s instructions to Digital Software Providers, there is a specific requirement in how the STP pay event is recorded so that the ATO’s systems are informed correctly of when an employee first receives the JKP, the amount of the JKP Top Up (if any) and when an employee stops receiving the JKP.

At a very high level, this involves the setting up of a separate payroll category for the JKP Top Up. The ATO have instructed that the TOP UP category be setup as an allowance instead of a normal gross wage category. Consideration needs to be given on whether the employer’s wish to pay super on the JKP Top-Up as this it is currently voluntary.

For software providers that are not going to automate the reporting of when employees starts and end on JKP, the recommended instructions seem to revolve around creation of fortnight specific payroll categories called “JOBKEEPER-START-FNXX” and “JOBKEEPER-END-FNXX” (FNXX denotes the JKP fortnight as per the ATO’s calendar). Take note of this nuance if it impacts your particular software solution.

Saward Dawson recommends that employers ensure that the right payroll settings are used in order to “get it right the first time” and therefore minimise any reporting errors or issues that may arise as it may be difficult to reach the ATO during this time unprecedented demand on their support staff. For employers that are not yet reporting through STP, we highly recommend moving to STP enabled system as it will make administering the JKP easier.

The table below summarises the links and proposed setup instructions at a high level. Please refer to the direct links to the relevant software provider for additional details.

Links to Software Provider’s Support Guide:

Xero

https://central.xero.com/s/article/Enrol-employees-for-JobKeeper-payments

https://central.xero.com/s/article/Set-up-or-update-JobKeeper-pay-items

https://central.xero.com/s/article/Process-JobKeeper-payments

MYOB AccountRight

https://help.myob.com/wiki/display/ar/COVID-19+wage+subsidy+%28JobKeeper%29+payments

MYOB Essentials

https://help.myob.com/wiki/display/ea/COVID-19+wage+subsidy+%28JobKeeper%29+payments

Reckon Desktop

https://help.reckon.com/category/fyauksd7j5-reckon-accounts-how-to-payroll-jobkeeper-payment

Reckon One

https://help.reckon.com/category/1qtha4h03h-reckon-one-how-to-payroll-jobkeeper-payment

Reckon Payroll Premier

https://help.reckon.com/article/o2icztv7ys-payroll-premier-2019-20-job-keeper-guide

QBO

https://support.yourpayroll.com.au/hc/en-au/articles/360001461816-Managing-the-JobKeeper-Payment

Current Recommended Software Setup

Xero:

In the payroll section of your Xero file, follow the Covid-19 support message to the JobKeeper landing page. Xero have included an interactive checklist for you to go through that includes the setting up of your payroll for JobKeeper.
What we found very helpful about this feature is that it includes links to various official ATO advice and Xero support articles for each step of the process.
If you had previously set up the JKP top up category as an allowance as per Xero’s previous advice prior to the Xero’s JobKeeper feature being released, there is a conversion process that you have to step through to migrate the pay run data from the previous setting to the new feature. This is also in Xero’s guidance.

MYOB AccountRight and Essentials:

Set up an income account to receive JobKeeper payments
Set up the JobKeeper wage categories
Exempt the JobKeeper top-up category from accruing super
Please take note that you will need to ensure that the naming of the JKP Start and Finish payroll category is correct as it is specific to the fortnight of the ATO’s JKP calendar.

Reckon Desktop and Reckon One

The concept is similar to MYOB or QBO where:

1. You will have to record any JobKeeper Top Up payments under a pay item/category called “JOBKEEPER-TOPUP”.
2. You will have to manage the reporting of the JobKeeper start and ending dates of each employee via the using of new payroll items/categories called “JOBKEEPER-START-FNXX” and “JOBKEEPER-END-FNXX”.
   Refer to the links to Reckon’s support articles in this article for more detail.

QBO

Use a the new JobKeeper Eligibility Report which is meant to assist users with determining employee eligibility.

1. Create the JobKeeper “top-up” pay category and set it as an allowance type.
2. Create a pay category for the “JobKeeper Start Fortnight”
3. Create a pay category for the “JobKeeper Finish Fortnight”
   Take note that you will need to know how to use the 2nd and 3rd categories when starting an employee on JKP and ceasing the employee from JKP. Refer to the link above for more details.
   Please take note that you willQ need to ensure that the naming of the JKP Start and Finish payroll category is correct as it is specific to the fortnight of the ATO’s JKP calendar.

What should users look out for in the near future?

Xero:

On first impressions, it would seem like Xero have given this a lot of thought and have done a good job implementing the feature/support pages. Future changes will be updated via their Covid19 landing page and notifications should pop up if Xero needs to bring your attention to any new changes.

MYOB AccountRight and Essentials

As far as we know there are no plans by MYOB to launch a JobKeeper feature so the advice given by MYOB as per their website should remain the same.

Reckon Desktop and Reckon One

We don’t expect any additional features for JobKeeper to be announced in Reckon as of this stage.

QBO

As far as we know there are no plans by Intuit/Keypay to launch a JobKeeper feature so the advice given as per their website should remain the same.