What is JobKeeper?
The JobKeeper payment is a subsidy for businesses, aimed at keeping more employees in jobs. The payment will be paid to employers for up to six months for each eligible employee that was employed on March 1, 2020, and is retained or continues to be engaged by that employer.
The question that is asked though is “How do we apply JobKeeper payments in payroll?“
Before we start there are a few things that we need to consider:
- Where a business is eligible for JobKeeper there is not the option to choose which employees are paid in this manner. It is “One In, All In”.
All eligible employees are to be given the opportunity to sign up and it is their choice whether or not to sign up.
- Employees can only be signed up to JobKeeper with one employer.
If they are eligible under more than one employer, they need to choose which employer that they receive JobKeeper from.
- JobKeeper is not a straightforward payment to the employee, it varies based on the circumstances of employments.
How is JobKeeper applied to Payroll?
JobKeeper is not a one size fits all. The way that it is applied to your payroll depends upon the employment circumstances of the employee.
Where an Employee is Stood Down
As COVID-19 spread across Australia and the world, many businesses were forced to temporarily close and remain closed until government restrictions are lifted.
|Leave without Pay||Before Tax||After Tax|
Where an Employee is still working (Regular or Reduced Hours)
The key when paying income is not whether or not an employee is working their regular, reduced, or in some cases more hours, but rather what the wages from these hours amounts to per fortnight in comparison to the JobKeeper payment.
If the wages are less than the $1500 value of JobKeeper
The key here is that any hours that are worked are treated as a Normal Wage with normal liabilities including accrual of leave, long service leave, and payment of Superannuation.
The balance of the JobKeeper payment is an allowance or “Top Up” without these liabilities to the employer.
|Wages less than JobKeeper||Before Tax||Liabilities|
|Normal Wages||Wage||$ 1000||Superannuation & Leave Liabilities|
|JobKeeper Top-Up||Allowance||$ 500||No Superannuation or Leave Liabilities|
If the wages are equal or greater than the $1500 value of JobKeeper
Where the wages are equal or higher than the value of JobKeeper then there is no change to the handling of payroll. All hours and wages are treated as a normal wage with normal liabilities including Leave and Superannuation.
What about if I go on Leave?
If an employee takes Annual Leave, Sick Leave can be paid by JobKeeper.
It is treated the same as other wages.
|Wages less than JobKeeper (using Leave)||Before Tax||Liabilities|
|Annual Leave||Wage||$ 250||Superannuation & Leave Liabilities|
|Long Service Leave||Wage||$ 250||Superannuation & Leave Liabilities|
(Sick or Carer’s Leave)
|Wage||$ 250||Superannuation & Leave Liabilities|
|JobKeeper Top-Up||Allowance||$ 750||No Superannuation or Leave Liabilities|