This article will be updated regularly as more information comes out. If you need any assistance or have any questions, feel free to reach out to us.
- Keep yourself informed of any updates. JobKeeper subsidy will be passed through parliament this Thursday 9th of April https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employers_0.pdf Once this is passed through Parliament we will all have a clearer picture of the requirements for submission of the applications. Please register yourself on this link (if you have not done so already) for any updates with the JobKeeper payment https://www.ato.gov.au/general/gen/JobKeeper-payment/
- Consider your decline in revenue – Does it meet the 30% requirement for eligibility. Run Xero’s Profit and Loss report to view comparison for March 2020 and March 2019 as well as the March Quarter 2020 and March Quarter 2019
- Consider if you have the cashflow to re-employ those workers that you have stood down. Do you have the cashflow to top up those employees that would not ordinarily earn more than $1500 a fortnight? You will not see a reimbursement for these registered Jobkeeper payments until the first week of May. If you do not have the cashflow, you are not obligated to reinstate stood down staff.
- Determine the employees who may be eligible AND that you want to claim the JobKeeper payment for using this criteria:
Employees must continue to be employed
- You will only be able to claim the JobKeeper payment for eligible employees that were in your employment on 1 March 2020; and
- continue to be employed while you are claiming the JobKeeper payment.
- You can choose reinstate employees terminated post 1 March and still be eligible
- is a full-time or part-time employee, OR
- if casual, must have been employed on a regular and systematic basis for at least than 12 months as at 1 March 2020; and
- was aged 16 years or older at 1 March 2020; and
- was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020; and
- was a resident for Australian tax purposes on 1 March 2020; and
- is not in receipt of a JobKeeper Payment from another employer.
You can only claim JobKeeper payment for eligible employees if you pay the $1,500 per fortnight (before tax) to each eligible employee.
To find out if the employee is eligible as of 1st of March 2020, what their start date was, their employment status, basis, standard units of pay, rates and annual salaries in Xero, go to reports, scroll down to payroll section and selected EMPLOYEE REMUNERATION REPORT (see below)
This report will also assist you to determine if casuals are eligible as they must have had at least 12 months continual service as at 1st March 2020
5. Communicate with your employees
Have a conversation with the eligible employees to determine if they are already receiving any other government payments that this may impact. If they are already claiming JobSeeker, they will need to choose only one of the benefits as they will only be eligible for one of them.
Once those initial conversations have been made, inform them in writing of your intention to claim on their behalf. You will also need to communicate they can continue to work and any changes to their rosters; whether they will be stood down due to not enough work being available; and the fact that they will still receive the JobKeeper payment.
If the employee has two employers, the employee will need to let the other employer know not to claim on their behalf as only one of the employers are eligible to claim on their behalf.
Ensure you have their current payroll and personal details available for your application when it becomes available online. Send this Fact Sheet to your employees so they can be fully informed. https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employees_0.pdf
Once you determine an employee’s eligibility and your business’ eligibility, it is essential to communicate this to your employees ASAP. Where employees are eligible to receive JobKeeper, they do not need to register for JobSeeker. If already registered for JobSeeker, they will need to let Centrelink know that they will be receiving JobKeeper.
6. Set up relevant codes in Xero to account for those subsidies coming in. Please speak to your bookkeeper or accountant for advice if you are unsure.
Other Income – JobKeeper Subsidy – BAS EXCLUDED
Other Income – Cashflow Boost (PAYGW Credit) – BAS EXCLUDED
Other Income – Government Loan – BAS EXCLUDED
Other Income – Payroll Tax Refund – BAS EXCLUDED
Other income – Apprentice/Traineeship Support – BAS EXCLUDED
Non-Current Liability – Covid19 Govt Support Loan
7. Setup Xero Payroll (or your other payroll software) in preparation of the payments and continue paying your employees. These payments should be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available. If you do not report through Single Touch Payroll, you can still claim the JobKeeper payment; however there will be a manual claim process.
For those that have kept their fulltime staff that earn more than $1500 a fortnight, nothing changes. Keep the set up the same as usual.
For those that have fulltime, part time employees earning less than $1500, you need to top up their Wages to reach the $1500 taxable gross amount each fortnight. Create a COVID19 Pay item in payroll settings as per below. The employee will still accrue the same leave but you are not required to pay super on the top up amount (you can if you wish to but it’s not advisable).
For those you wish to pay the Jobkeeper payment for, but are not working during this time, you do not have to pay super on the $1500 but a fixed amount of accrued leave processed
The Pay Period for JobKeeper payment commences 30th of March 2020 so you need to consider all of the above ASAP if you have a pay period due this week.
Configuration of payroll in Xero can be complex. If Link is processing your payroll, we will attend to this automatically. If you are a Link client, but we do not process payroll for you, please reach out to us to work through this with you.
Refer to this link for the most up to date Job Keeper FAQs: https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_0.pdf
We will send out another communication as soon as this has been passed through Parliament after the 9th of April.