How Do I Setup JobKeeper Payments in Lightning Payroll?

The JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by COVID-19. It is to be administered by the ATO.

18/09/2020 Edit: JobKeeper has been extended until 28/3/2021, please see here for more information on how JobKeeper extension features work in Lightning Payroll.

For answers to most payroll related Coronavirus questions please see the Fair Work website here.

If you are confident that your business and employees are eligible to receive the Australian Government's JobKeeper payments, these are to be best entered into Lightning Payroll as an allowance.

For more detailed information, please see the ATO JobKeeper (Employers) page as it contains the best information regarding paying JobKeeper and the full application process.

The full ATO enrolment process is available here. Step 2 on this enrolment page (Identify and maintain your eligible employees) can be handled by Lightning Payroll as we are both STP and JobKeeper enabled. How to do this is described below.

JobKeeper Payment enrolment is open to eligible employers until the program closes. Your clients must enrol and identify their eligible employees by the end of the month they wish to claim for. A monthly business declaration will then need to be completed from the 1st to the 14th day of the following month.

For detailed information on accruing and taking leave when receiving JobKeeper payments please see the Fair Work Australia website.

There are two parts to recording JobKeeper payments in Lightning Payroll:

• Step 1 of 2: Making a JOBKEEPER-TOPUP allowance
  • This step is only required for employees earning under the minimum amounts, thus requiring a topup of their earnings
• Step 2 of 2: Reporting JobKeeper through STP
  • Required for all JobKeeper-claimed employees

Note: For JobKeeper features you will need to be on the latest version of Lightning Payroll. Click Check for updates now? at the bottom of the program to speed up the update process.

JobKeeper in LP (Step 1 of 2): Making a JOBKEEPER-TOPUP Allowance

If you have employees earning under the JobKeeper minimum amount and wish to claim for them, a topup payment will be required to maintain eligibility. This JOBKEEPER-TOPUP allowance is only needed for such situations. JobKeeper (Step 2 of 2) mentioned below, is required for ALL employees you wish to claim JobKeeper for.

Regarding Backpayment of the JOBKEEPER-TOPUP for April, the ATO says:

"For the first two fortnights (30 March – 12 April, 13 April – 26 April), we will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by you by 8 May. This means that you can make two fortnightly payments of at least $1,500 per fortnight by 8 May, or a combined payment of at least $3,000."

Lightning Payroll lets you add the backpayment in either the current pay as a lump sum, or separately within each individual pay within April (by clicking Last Pay Run and editing each pay). Both methods look the same within STP as it only sends an employee's YTD totals. Do not use the Backpayment box however. JOBKEEPER-TOPUPs must be recorded as allowances, just like we describe below.

Below is an example of how a typical weekly JOBKEEPER-TOPUP allowance would be configured. An allowance can be created under one of two places:

• Company >> Allowances
  
  • Use a company allowance if you wish to apply the JOBKEEPER-TOPUP allowance to multiple employees at the same $ amount per pay.
• Employees >> Allowances/Deductions >> Allowances
  • Use employee allowances if you want to set each employee's topup $ amount differently between staff (e.g. One person earning $400 weekly requires a $350 topup to reach the minimum $750. Another person earning $700 weekly would need a $50 weekly topup).

For employees whose pay and topup amounts change from pay to pay, either allowance type would suit as you will still need to manually calculate and edit the topup amount, dependant on each pay in Pays >> Edit Pay/s.

Once you are in the appropriate allowance section click on the green plus button to add a new allowance.

• Enter the Description as JOBKEEPER-TOPUP (typed exactly like that).
• Set the Amount as required:
  
  • Minimum gross pay amounts are $1500 fortnightly, $750 weekly or $3000 monthly (with the exception of $4500 for the month of August since it has three fortnights). Monthly payers can also opt to pay $3250 consistently if they prefer. The example image below is set to $0 by default, which suits constantly varying pays. Just top up the allowance from $0 to the required amount on each pay as you go.
  • Only pay full amounts if the employee has been stood down.
  • For employees earning under the JobKeeper amount, pay them as usual and 'topup' the difference using this allowance, via the usual Edit Pays screen. The ATO site above says "If your eligible employees earn less than $1,500 per fortnight before tax, you must pay them at least $1,500 for each fortnight to claim the JobKeeper payment. This is a ‘top up’ of their salary or wages and will ensure they remain eligible."
  • For employees earning over the JobKeeper amount, simply pay them their usual pay. There is no need to use this allowance.
• Set 'Classification' to 'Other'
• Enable 'Taxable?'
• Enable 'Itemised?' to separate the allowance out in the STP report
• Disable 'Included in Super Calculations?' as super is not required on JobKeeper amounts.

If you're creating a Company Allowance don't forget to add eligible employees to the new allowance underneath, using the green plus.

You can now edit their pay under Pays >> Edit Pay/s using the JobKeeper allowance. Simply enter ordinary time and other pay items like normal, then edit the JOBKEEPER-TOPUP allowance to make up the difference so that the gross matches the required minimum mentioned above.

JobKeeper in LP (Step 2 of 2): Reporting JobKeeper through STP

Once you have completed your JobKeeper eligible pays you need to mark intended employees as eligible to report JobKeeper through Single Touch Payroll. To do this go into Employees >> Tax Rates >> JobKeeper Settings and tick the box to mark the employee as eligible.

Eligibility dates are preconfigured to apply the entire 13 week ATO JobKeeper period, but you can reduce this date range if you only want to apply for a shorter JobKeeper period for this employee.

This will mark pays between these dates as claimed for JobKeeper and report appropriately through Single Touch Payroll. You will be able to see the special ATO JobKeeper claim reference codes showing up in your STP report and lodgements.

These FN (Fortnight) reporting codes are automatically handled by Lightning Payroll using the eligibility dates you have set under Employees >> Tax Rates.

The JOBKEEPER-START-FN code represents the fortnight they started JobKeeper, and the JOBKEEPER-FINISH-FN code represents the first full fortnight they become ineligible for JobKeeper. These codes should not change with each pay period.

Why is The ATO's Website Not Showing a List of JobKeeper Eligible Employees?

From a recent ATO software developers newsletter:

"A business that has reported JobKeeper codes in their STP software will only see the number of eligible employees that have been reported, not a list of each employee.... They will need to check the number is correct or edit the number."

You Do Not Need To Change Your Pay Cycle

The JobKeeper scheme relies on processed date (date the payment was made to employees), not the pay run dates. Please see the fortnight codes tables below for an example.

From the ATO:

"Regardless of the frequency of regular pay cycles or out of cycle pay periods, or the pay period start and end dates, the $1,500 per fortnight applies to the paydays (payment date) within the defined fortnights and from which fixed fortnight the payment applies. Special rules apply for payments within the month of April and for employees receiving monthly pay."