The first step to JobKeeper is to enrol in the program. This can easily be done by following the instructions on the ATO website or our handy step by step guide here. You can also contact your tax agent or bookkeeper for assistance on the process.
So you’re all set up. Now what?
JobKeeper Payments effectively work on a cashback style system. The employer is expected to pay the amount in advance, which is then credited back to the business by the ATO.
Each employee will be entitled to $1,500 per fortnight. The $1,500 MUST be passed on to the employee. If the employee’s regular fortnightly salary is below this, (for example, $1000 per fortnight) they must still be paid the full $1,500 amount.
However, if you have an employee who normally earns more than $1,500 per fortnight (for example, $2000 per fortnight), JobKeeper will only cover the $1,500 and you will be required to provide the additional $500 that makes up their regular wage.
Pay your employees in the weekly, fortnightly, or monthly wage installments as you normally would, but be aware that JobKeeper ‘top-up’ payments occur every fortnight.
If you pay your employees on a pay cycle that is NOT fortnightly (weekly or monthly), each payment must total the JobKeeper $1,500 per fortnight cycle.
|Pay Frequency||JobKeeper payment amount||Calculation|
|Weekly||$750||$1,500 / 2|
|Fortnightly||$1,500||$1,500 x 1|
|Monthly*||$3250||$1,500 x 26 / 12|
Note: Monthly paid employees must receive the full $1,500 for each JobKeeper fortnight within the month. You can choose to pay $3,250 each month or a minimum of $3,000 for each month (except August 2020 which has 3 full fortnights.)
Changes in wages due to JobKeeper do not affect your super guarantee obligations and you must continue to pay the same super guarantee amount based on your employees’ wages before JobKeeper.
(If your employees’ wages were less than $1,500, the super guarantee cannot be deducted from the $1,500 and MUST STILL be paid additionally – with the exception of a salary sacrifice agreement)
When setting up your bookkeeping program of choice for JobKeeper, it is important to allocate JobKeeper funds into their own isolated “other income account”. These funds are a reimbursement or ‘top-up’ from the government and are taxable income.
Thanks to this separation, Payroll and other Overhead accounts can be processed as normal without any other changes.
It is important to contact your tax agent or bookkeeper to help you with setting up JobKeeper if you are unsure. If you have any questions regarding JobKeeper or any other matters, you can contact us here.