What Is Changing With The JobKeeper Extension?

The ATO have released rules and information relating to the JobKeeper extension. Please see their page on the topic here, or click here for the technical STP extension document.

The main difference going forward into the JobKeeper extension periods (post 27/9/2020) is that the payments are now tiered depending on an employee's past workload.

What If My Employees Aren't Eligible for the JobKeeper Extension?

If you have been claiming JobKeeper and wish to stop claiming for any or all of your employees you just need to adjust their JobKeeper eligibility end date/s. This can be done under Employees >> Tax Rates >> JobKeeper Settings.

Do not untick the main JobKeeper eligibility tickbox. Simply change their JobKeeper eligibility end date to the paid/processed date of the last JobKeeper-related pay you will be making to each employee. If claiming until the end of the scheme, do not change this date, as the automatic, default end date is ideal.

E.g. Ending JK on 27/9/2020 will generate A JOBKEEPER-FINISH-FN14 code for an employee, which tells the ATO that they are ineligible for JobKeeper starting JK fortnight number 14.

How Much Do I Need To Pay Employees In Each Of The Two Extension Periods?

Tier 1 employees are eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1/3/2020 or 1/7/2020.

Tier 2 employees are all other JobKeeper eligible employees. 

The extension periods and updated amounts are as follows:

• Extension 1: from 28/9/2020 to 3/1/2021
  • Tier 1: $1,200 per fortnight (before tax)
  • Tier 2: $750 per fortnight (before tax).
• Extension 2: from 4/1/2021 to 28/3/2021
  • Tier 1: $1,000 per fortnight (before tax)
  • Tier 2: $650 per fortnight (before tax).

See the ATO's website for information on reporting business participants, as Lightning Payroll only reports JobKeeper via STP for employees.

You don't need to remember tier levels or JK amounts during each period. For convenience, Lightning Payroll will display the appropriate amount at the top of each employee's Edit Pay window.

Note: If you cannot see this blue text message at the top of the window it means the employee is not JobKeeper enabled (under Employees >> Tax Rates >> JobKeeper Settings), or that the current pay's processed date is outside of the JobKeeper extension period (28/9/2020 - 28/3/2021). Press the small pencil button at the top of the Edit Pay window to change the processed/paid date.

In this example, it is for a Tier 1 employee, paid weekly, during JK extension period 1.

Note for MONTHLY pays: The prompted amount shown in your monthly employee's Edit Pay window is calculated using the average JK monthly amount method by default. You can change this setting to calculate based on the number of fortnights ended within the month under Settings >> Time/Display Settings by unticking the box which says Use average-out method for calculating monthly JobKeeper amounts.

What Do I Need To Do In Lightning Payroll?

Lightning Payroll does its best to automatically detect each employee's tier, so you will not likely need to change any employee settings if you are already claiming JobKeeper.

Please review your employees' tier levels to ensure they are accurate.

Note: There are still some reasons why Lightning Payroll's automatic tier assessment may need manual setting up, for example:

• Difference of interpretation of the ATO's criteria. Since pay cycles can vary quite a bit, Lightning Payroll calculates an employee's average hours starting at their most recent pay date within the months prior to 1/3/2020 or 1/7/2020, then calculates the four weeks before and inclusive of this date (27 + 1 days). This is more complicated than just averaging hours worked in February and June. Exceptions to an employee's Tier 1 eligibility could include when:
  • they have taken unpaid personal leave during the pre-March or pre-July reference period and this is not representative of their typical hours.
  • their first pay cycle ends on or after 1 March or 1 July.
  • employed part-way through the reference period.
• Lightning Payroll can only detect hours it is aware of. If you pay your employees using non-hourly pay rates you will need to manually set tiers.

To check or change the automatically determined employee tier levels go to Employees >> Tax Rates >> JobKeeper Settings >> Should this employee be classed as Tier 1 for the JobKeeper extension?

The program will also add an employee note with basic reasoning why that tier level was auto-marked.

You will need to ensure you correct the amounts paid each pay period (the program will prompt the appropriate amount; see above image). These JobKeeper reductions might require you to make some JOBKEEPER-TOPUP allowance amount changes. Allowance templates are configured under either:

• Company >> Allowances
• Employees >> Allowances/Deductions >> Allowances

Either allowance template type allows you to edit an individual allowance amount within an individual pay. These individual pay allowances are edited under Pays >> Edit Pays >> Allowances/Deductions >> Allowances.