Payroll reminders for the end of the financial year

Enlist the help of your wonderful bookkeeper for eofy

It’s always a great feeling when your small business grows large enough to take on new staff. It’s an unequivocal sign that you’re doing well, if you have enough business to warrant extra hands on deck. New staff bring a whole gamut of greatness to a business, by offering diverse and interesting solutions to problems, and an injection of enthusiasm to help your business grow even further.

There is one thing that has the potential to take the sparkle off your growing business, though, and that’s payroll! It can be a bit of a headache to keep up to date with your payroll obligations, especially at tax time, and the bigger your business grows, the more staff you’ll be dealing with. It doesn’t have to be all bad, though. If you heed these five top payroll tips, it might just make your end of financial year that little bit easier.

 

1. Make sure you review your payroll records

You’ll be required to issue Payment Summaries for all employees before July 14. To make this a nice, streamlined process, make sure ahead of time that your employees’ details are all correct, up-to-date, and accounted for.

These details must include:

  • Full name
  • Date of birth
  • Tax File Number
  • Current Address
  • Start date (and termination date, if applicable)
  • Pay details (hourly rate, employment period, allowances, and gross wage)

Also ensure that all employment contracts are up to date, and compliant with industry awards and workplace law.

 

2. Review and Reconcile your payroll accounts for Payroll Tax

Every state has their own threshold on wages above which you pay Payroll Tax. The definition of wages also varies from state to state, but always includes Superannuation and overtime. Check to see if you are required to register, if you have not already done so.

If you are already registered, your payroll reporting requirements will vary depending on the state your business is in. At the end of the financial year, you’ll be required to complete an Annual Reconciliation form, in order to report all taxable wages and premiums paid. This form will also help you determine whether you still owe the state office of revenue, or whether they owe you a refund due to overpayment.

Remember, if you employ staff in more than one state, you must fill out an Annual Reconciliation form for each applicable state’s tax office.

 

3. Finalise your financial year’s payroll

Obviously, you can only finalise your payroll once the financial year is over, or once you know there will be no further pay runs processed. Make sure to double check on June 30 that no unrecorded payroll transactions have gone through. These can include things like EOFY bonus payments, or salary-sacrificed superannuation payments.

In order to prepare for this, though, you can balance your payroll up until that final month, making the end-of-year finalisation a much shorter process. Once you’ve finalised your payroll completely, you can prepare and issue your employees’ payment summaries. Remember that you must keep all payroll records for seven years after the date of issue, so make sure you keep copies in a safe location.

 

4. Remember to update your Tax Tables and Pay rates

Payroll withholding rates change every year. In addition to a change in the tax scales this year, Medicare has a threshold change coming and the low income tax offsets will change, meaning payroll withholding rates will change for nearly all employees. These changes are incorporated into the new tables issued by the ATO and in updated payroll software, and apply from the first payment made on or after July 1.

For employees on awards, ordinary pay rates, shift rates and allowances change for the first full pay starting on or after July 1. Make sure you update all employees records before you do the first pay.

 

5. Enlist the help of your wonderful bookkeeper!

Whether you outsource, or have an in-house bookkeeper, you have someone on hand that intrinsically understands payroll, and your business’s unique payroll requirements. If you’re struggling with payroll, or simply want to utilise your time more efficiently, use the person that is right for the job.

If your business is successful enough to be growing, and you are taking on new staff, but don’t yet retain the services of a bookkeeper, you may be making things more difficult and, ultimately, more costly for yourself in the long run.

 

Whatever you do, don’t leave payroll until the last minute. There are quite a few tasks you can undertake from the above list before June 30, and if you get these organised ahead of time, what was once a payroll migraine will now just be a dull ache.

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