How to Report JobKeeper Payments in Xero

As certified Xero consultants, we have collated the latest information to create for you a simple step-by-step guide to reporting JobKeeper payments with Xero.

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In this Guide:

Before you Start 

Set Up JobKeeper Start Dates

About Jobkeeper payments

Standing Down an Employee

Record an employee’s time on stand down

Examples

Other Information

Before you Start

• Set up Single Touch Payroll in Xero
• Review the eligibility criteria for employers(ATO website)
• Enrol employees for JobKeeper payment(ATO website)
• Set Jobkeeper Start Dates as per below

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Set Up JobKeeper Start Dates

Take care when setting the start date in the steps below. Once you click Save for reporting, the start date is locked and can't be undone.

1. In the Payroll menu, select Pay Employees.
2. In the Payroll support during COVID-19 message, click visit our Payroll support page.
3. Select the JobKeeper settings tab at the top of the page.
4. Next to an employee’s name, click Start JobKeeper. If the details under an employee’s name are red, edit them using the steps in the section below.
5. Under JobKeeper start date, select the applicable ATO fortnight.
   • You can determine which fortnight to select based on the Payment Date of the pay run that the employee should start to receive top-ups. Eg if the payment date is 1 April, select the ATO fortnight that spans 30 March to 12 April.
   • You can’t select an ATO fortnight in the future. You can only select a current or past fortnight.
6. Carefully review the selected ATO fortnight. Once you save the start date, it can't be undone. When you're ready, click Save for reporting.

You should repeat these steps for other eligible employees. The employee JobKeeper start dates will be sent to the ATO when you next file with STP.

Warning

If you have selected incorrect JobKeeper start dates for any employee, stop immediately, don’t file STP, and contact Xero Support.

If an employee doesn't need a JobKeeper top-up (eg they already earn more than $1500 a fortnight), you don't need to add the JobKeeper pay item to their payslip. Just set up the employee's payslip as normal. If you've enrolled the employee for JobKeeper payments, this information will be sent to the ATO when you file with STP. 

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About Jobkeeper payments:

A JobKeeper allowance pay item is automatically created. You can use this to record JobKeeper payments for your employees. If you've already set up an allowance pay item for JobKeeper payments using our previous instructions, you can edit the pay item so it's in the required format.

If you’ve set up a custom pay item which isn’t an allowance, or that has a rate type other than the fixed amount, any previous JobKeeper payments made using this pay item needs to be adjusted. This will ensure that the JobKeeper payments are correctly reported to the ATO with STP.

If you're planning to pay your employees the JobKeeper payment on an ongoing basis, you can add item to pay template.  If it is only going to be once or twice you can add directly onto payslip when processing a payrun.

You can also create an additional pay item, eg if you need one for calculating the Superannuation Guarantee and one that doesn’t. Please note you are not required to pay superannuation on Jobkeeper payments if you do not choose too.

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Standing Down an Employee

Due to COVID-19, you might need to stand down an employee until more work is available.

Employee’s are entitled to leave accruals during “stand down”.  This is based on their normal working hours per week.  Not required for casual employees.

For more information about standing down an employee, or if you have questions about your business requirements, please see the Fair Work Ombudsman website.

Record an employee’s time on stand down

To record an employee’s time on stand down in Xero Payroll, you should:

• Check the employee’s holiday group
• Create a new earnings pay item
• Process a pay run and adjust your employee’s payslip

Check an employee’s holiday group

First check that all local holidays are included in the employee’s state holiday group.

1. Click the organisation name, select Settings, then click Payroll settings.
2. Select the Holidays tab, then select the employee’s state holiday group (eg ‘New South Wales’).
3. Check that the list of public holidays includes all applicable local holidays.
4. (Optional) To add a new holiday to the group, click Add Holiday, enter the details, then click Add.

Then check that the employee is assigned to the correct holiday group.

1. In the Payroll menu, select Employees.
2. Click an employee’s name to open their details, then select the Employment
3. Under Holiday Group, check the correct group is selected for the employee.
4. Select the Include holidays in Payslips checkbox if you haven’t already.
5. Click Save.

Create a new earnings pay item

Set up a new earnings pay item to account for the stand down hours.

1. Click on the organisation name, select Settings, then click Payroll settings.
2. Select the Pay Items tab, then select Earnings.
3. Click Add, then select Ordinary Time Earnings.
4. Enter an Earnings Name, such as 'Stand down’.
5. Under Rate Type, select Multiple of employee's ordinary earnings rate.
6. Under Multiple (ex. 1.5), enter ‘0’.
7. Under Expense Account, select the relevant expense account, such as ‘Wages and Salaries’.
8. Select the Accrue Leave for this Earnings Rate checkbox, then click Add.

Process a pay run and edit the employee’s payslip

Add the new earnings pay item to the employee’s draft payslip, and edit it.

1. In the Payroll menu, select Pay Employees.
2. Click Add Pay Run, select a pay period, then click Next.
3. Click the employee’s name to open the payslip.
4. Click Add Earnings Line.
5. Under Earnings Rate, select the new ‘stand down’ earnings pay item created above, then click OK.
6. In the 'stand down' earnings rate, enter the number of working hours in the pay period the employee missed because of stand down. Don’t include hours covered by public holidays in the stand down hours. 
7. In the ‘ordinary hours’ earnings rate, reduce the number of hours by the amount in the ‘stand down’ earnings rate.
8. Click Save.

When you post the pay run, you’ll record the stand down without disrupting the employee’s leave accruals. You’ll need to edit the employee’s payslip each pay run until they return to work.

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Examples

Fortnightly Example of Employee in “Stand down”

Example of Fortnightly leave accrual for “Stand down” Employee

Example of Employee that earns less than $1,500 per fortnight.

Other Information

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