Single Touch Payroll (STP) will be crucial for businesses wanting to quickly and easily access the Government’s JobKeeper wage subsidy scheme, which aims to provide payments of $1,500 per fortnight to eligible employees.
Those businesses that are not using STP will be able to manually enter their employee details in the ATO’s online services or Business Portal.
How will I process the JobKeeper payments?
For employees who already earn $1,500 or more per fortnight in gross earnings, nothing needs to change. That is, the pay category assigned against the employee’s earnings is not required to change and you will keep reporting the employee’s earnings via STP as normal.
What will change are the reporting requirements for employees earning less than $1,500 gross earnings per fortnight. For these employees, a “top-up” amount must be paid to bring their gross earnings up to $1,500 per fortnight. This “top-up” needs to be reported as an allowance.
If an employee has been stood down, the employee will be entitled to a full JobKeeper amount of $1,500 gross earnings per fortnight. It too will be reported as an allowance.
Is superannuation required to be paid?
Employees will continue to receive the 9.5% superannuation guarantee on their ordinary earnings worked. It is up to the employer whether superannuation is paid on any additional wage due to the JobKeeper Payment.
What about leave entitlements?
Leave entitlements will continue to accrue for full time and part-time employees.
Check the leave accrual settings in your payroll system to ensure they are set-up correctly. Those who have their XERO set-up on ‘Based on Ordinary Time Earnings’ will need to change it to ‘Fixed Amount Each Period’.
A full-time employee will generally accrue a minimum of 2.9231 Hours for Annual Leave and 1.4615 Hours for Personal/Carers Leave on a weekly basis. A part-time employee would receive a pro-rata amount based on their normal ordinary hours worked.
How do I do it in my Payroll Software?
The above is a summary only and each payroll system is slightly different. There are also some additional JobKeeper pay categories that are needed to notify the ATO when you become eligible to receive payments. For full details click the relevant link below or contact your payroll software provider.