Bookkeeping – Is JobKeeper included in Workcover Remuneration – Here’s what to include how to declare correctly


Bookkeeping – Is JobKeeper included in Workcover Remuneration – here’s what to include how to declare correctly
Is JobKeeper included in Workcover Remuneration – here’s what to include how to declare correctly

When reporting the WorkCover premium, it will not apply to eligible Job Keeper (JK) payments (such as paying the full JK amount to staff stood down, or JK top amounts) employers make to their staff between 20 March 2020 and 27 September 2020 (but not on payments when staff work & earn over the $1500 a fortnight as normal wage/salary).

The availability of JobKeeper Payments overlaps with WorkSafe premium calculations for both the 19/20 and 20/21 premium years of reporting.

On 5 May 2020, the Victorian Government confirmed that any eligible Commonwealth Government JobKeeper Payments to meet the $1,500 threshold will not affect the calculation of the WorkCover premium. These changes are to support Victorian employers during the uncertainty of the coronavirus pandemic.

Worksafe have a good information sheet with the following table which summarises which JobKeeper Payments made by an employer who is receiving JobKeeper Payments are rateable remuneration:

Worksafe Premium & JK

What to report as remuneration (that the insurance premium is calculated on)

The easiest way to work out what to report this is in the STP system (if activated, as most small business are required by law) to use the Verification Report (MYOB) and Finalisation reports in Xero and other software, that were reconciled to the actual payroll.

This separates the JK as the allowance and gives the Gross net wages without JK allowance.

If some staff earned over the $1500 a fortnight, there was NO need to allocate any amounts to the JK in their pays.

But if staff worked under the $1500 fortnight, so that you had to “Top-UP” then that Top-UP amount is NOT included in Workcover total wages to declare.

Example – Payroll (full year)

A – Payroll Activity – Totals at the bottomWorksafe & JK - Payroll Activity

B – Verification reconciles to Payroll

Worksafe & JK - Verif Total wages

Total Allowances are subtracted from the Gross to give $138,244

Now check the breakdown of the Allowances for how much is JK (could include travel, meals so need to CHECK)

 

Worksafe & JK - Verif Total Allowances

It’s ALL JK in this example, paid as “Top-Up” (staff worked under the Gross $1500 fortnight)

So the total Remuneration wages and salaries are $138,244 for Workcover declaration, plus the super is $6122 to be added to the total for the Worksafe Insurance Premium to be calculated on.

It’s good to know that WorkSafe appreciates employers may be working through a number of processes associated with JobKeeper Payments.

Employers are encouraged to enter updated estimates of their rateable remuneration, bearing in mind that ‘additional’ payments and payments to workers who are stood down and not working need not be included, as in the table above. This applies for any updated estimates of remuneration for the 2019/20 year and any future estimates for the 2020/21 year. This will allow time for employers to access the JobKeeper Payments without needing to consider the impact on the remuneration for WorkCover premium.

Employer’s final certification of 2019/20 remuneration will need to include all categories of rateable remuneration. For larger employers, they have until October 2020 to certify their 2019/20 remuneration. Small employers have until March 2021. Certification for 2020/21 occurs after the end of that financial year.

WorkSafe will not apply any underestimation penalties to employers where the underestimation is due to considerations of JobKeeper Payments.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia

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