We’ve been asked by our clients how to account for the COVID payments from the government.
It’s best to separate your COVID payments/grants from other income, in Xero or MYOB, and separate the COVID payments between taxable and non-taxable.
Job Keeper is taxable, the COVID cash flow boost payments that come through lodging your March and June Qtr Lodgements are not taxable.
What then are the payments from the government that should be included in your assessable income?
Here is a list from the ATO which may help with your accounting allocations.
Include the following payments:
- fuel tax credits or product stewardship (oil) benefit
- wine equalisation tax producer rebate
- JobKeeper payments (COVID-19)
- Supporting Apprentices and Trainees wage subsidy (COVID-19)
- excise refund scheme for alcohol manufacturers
- grants, such as an amount you receive under the Australian Apprenticeships Incentives Program
- subsidies for carrying on a business.
Do not include the following grants and payments:
- cash flow boost payments (COVID-19) (non -assessable, non-exempt income)
- government grants and payments that are tax free.
