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JobKeeper 2.0 is set to launch in Australia. Xero Payroll will be ready

Posted 2 months ago in Advisors by Mel Arrold
Posted by Mel Arrold

Thanks to just released guidance from the Australian Taxation Office, we now have a clearer picture of the JobKeeper 2.0 extension that begins at the end of September. We’re happy to say that Xero Payroll will be updated in time to accommodate these changes. Below we offer a look at how Xero Payroll will handle the changes, as well as a brief overview of the new guidelines. 

The key changes for employers are:

  • You must demonstrate a decline in actual GST turnover relative to a comparable period, as opposed to a projected decline under the first phase of JobKeeper
  • JobKeeper payments for employees will depend on the total hours worked during a specific period, with employers assigning each nominated worker to one of two tiers.

You can see the new payments and tiers on this ATO page.

In Xero Payroll, we’ve made it easy for employers to assign a tier to a JobKeeper recipient. 

Simply choose an employee and click Set Tier. If you make a mistake, you can click on the overflow menu (the three dots on the right) and change the tier. Next, choose the correct tier from the dropdown list. 

When you file your next pay run, Payroll will assign the correct codes to the eligible employee. 

The same process applies for an employee that you’re newly nominating for JobKeeper. You can start them on JobKeeper and set the tier at the same time.

On the Single Touch Payroll page, you’ll be able to see your submission with the full CSV if you’d like to check what was sent to the ATO. 

Webinars for employer eligibility

Determining which employers are eligible for JobKeeper based on actual GST turnover is straightforward in many cases. But some employers will need to use alternative tests. These can be quite complex, and will likely require the help of a bookkeeper, BAS agent or accountant. You can learn more about alternative tests on this ATO page

To help you out here, we’ll be holding Xero webinars later in September showing you the steps from end to end in Payroll. And be sure to check out our September 21 webinar with Matthew Addison, executive director of the Institute of Certified Bookkeepers, as he walks us through the rules and eligibility tests for employers. We’ll also be updating Xero Central with information about JobKeeper 2.0. 

What doesn’t change for employers, according to the ATO:

  • Employers don’t need to re-enroll for the JobKeeper extension if they are already enrolled for JobKeeper for fortnights before 28 September.
  • Employers don’t need to reassess employee eligibility or ask employees to agree to be nominated by them as their eligible employer if they’re already claiming for the employees before 28 September.
  • Employers don’t need to meet any further requirements if they’re claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to holding an ABN, and declaring assessable income and supplies.

We’ll be sure to update you if we make any significant further changes to Xero Payroll. In the meantime, we recommend consulting an advisor and attending our JobKeeper 2.0 webinars.

15 comments

Anita Wildman
September 28, 2020 at 4.02 pm

What needs to be done if an employer is not eligible for JK 2.0?

Beeny Atherton in reply to Anita Wildman Xero
September 29, 2020 at 2.46 pm

Hi Anita, in Xero if your business is not eligible for the JobKeeper extension, all you will need to do is set an end fortnight for your nominated employees, then you can continue using payroll as normal. If you do have further questions about what this means for your business, we recommend reaching out to the ATO for further assistance. Hope this helps.

Martina Wutzke
October 1, 2020 at 12.18 pm

Hi

I have a client where their employees are not eligible for the JobKeeper extension.
They set the end fortnight as FN13.
However when they went to make their claim with the ATO they could only choose FN12 (FN 13 wasn’t there)

Does that mean they should have said the end fortnight was FN 14??

Beeny Atherton in reply to Martina Wutzke Xero
October 8, 2020 at 10.37 pm

Hi Martina, sorry for the delay. To end JobKeeper, the first fortnight that JobKeeper is not being claimed for the employee needs to be selected. So if they are claiming for the 13th fortnight, they would end on fortnight 14. If a mistake is made, for this circumstance:
For the employee(s) who were ended on FN 13 by accident:
1) Set their start FN to FN13
2) Set their end FN to FN14
3) File a $0 unscheduled pay run for the affected employees
Hope that helps.

Katrina Johns
October 6, 2020 at 4.11 pm

Hi Anita,
Can you advise what to do in Xero if the employer is not eligible for JK extension 1 but maybe eligible for JK extension 2? Do we end JK or keep it open?

Thank you,
Katrina

Beeny Atherton in reply to Katrina Johns Xero
October 8, 2020 at 10.59 pm

Hi Katrina, JobKeeper will need to be stopped if the employer is no longer eligible and restarted if they become eligible again. Hope that answers your question.

Katrina Johns in reply to Beeny Atherton
October 9, 2020 at 2.26 pm

Yes, thanks so much.

Sarah Quent
October 7, 2020 at 11.32 am

Hi,

What should we do as we don’t qualify for Jobkeeper this month for the 1st time since it began but we may qualify again next month. Do we need to end all employees currrently registered for JK and then re-start or can they all sit there as eligible.

Note all employees are paid more than the Jobkeeper payments so it doesn’t negatively affect their pay

Beeny Atherton in reply to Sarah Quent Xero
October 8, 2020 at 10.55 pm

Hi Sarah – thanks for your comment. Yes, you will need to end JobKeeper for all your employees and restart if you become eligible again. Click here for further information about setting a stop date for employee JobKeeper payments. Hope that helps.

David Tran
October 14, 2020 at 12.41 pm

How the hell do you access the menu where you can assign the Tier?

Beeny Atherton in reply to David Tran Xero
October 15, 2020 at 9.07 am

Hi David, To access JobKeeper support page where you can assign the employee tier, you need to go to Payroll > Pay Employees > click on the link to ‘visit our payroll support page’ on the banner that appears right on top of the page > click on ‘Enrolment Settings’ in About tab (or) go to ‘JobKeeper Settings’ tab > click on ‘Set tier’ for the nominated employees.

You can also go to Payroll > Single Touch Payroll > click on the link to ‘visit our payroll support page’ on the banner that appears right on top of the page > click on ‘Enrolment Settings’ in About tab (or) go to ‘JobKeeper Settings’ tab > click on ‘Set tier’ for the nominated employees. Hope that helps.

Susan
October 27, 2020 at 12.10 pm

How do I get to the first page you’re talking about? TBH this is typical for Xero. I’ve spent half an hour trying to find it. Give us ALL the instructions.

Beeny Atherton in reply to Susan Xero
October 29, 2020 at 2.13 pm

Hi Susan, thanks for your email. Do you mean how to get to the JobKeeper page? If so, you can get to this from the JobKeeper banner on the pay runs page. Hope that helps.

Anita
October 27, 2020 at 8.04 pm

If an employee is on tier 1 earning over $1500 a fortnight do I need to make any changes other than selecting what tier they are on before lodging to the ATO?

Beeny Atherton in reply to Anita Xero
October 29, 2020 at 2.12 pm

Hi Anita, that’s right – you don’t need to do anything else beside setting the tier.

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