The end of financial year for 2018 is coming up fast, with many of us still absentmindedly signing 2017 on documents. No doubt if you own a business, this time of year is busy as ever. Ensuring your payroll processes are set and ready for action come June 30 is key to a smooth start to the 2018/19 financial year. Our Perth accountant team at Online Tax Return have some great tips for preparing your payroll and books for the end of financial year.
End of Financial Year Checks
- Check all employee details for their current details, including address and tax file numbers;
- Remove any punctuation from addresses, like commas or full stops;
- Check the termination date for terminated employees has been entered;
- Ensure annual leave and personal leave entitlements have been flagged for carrying over into the new financial year; and
- Check any Reportable Employer Superannuation Contribution (RESC) categories are correctly linked in payment summary.
What is RESC?
RESCs, or Reportable Employer Superannuation Contributions, are super contributions made by an employer on behalf of their employees.
RESC can include contributions made when an employee influences the rate or amount of super contributed on their behalf made above compulsory contribution thresholds, or 9.25%. These Reportable Employer Superannuation Contributions are for contributions made before tax, not after.
End of Financial Year Reconciliations and Print Payroll Processes
- Reconcile total gross wages against the payment register YTD* and wages expense YTD reports;
- Reconcile outstanding super liability against unpaid superannuation for the month/quarter;
- Print the payroll payment register summary YTD; and
- Print the payroll entitlement balance summary/detail.
Reconciling PAYG Withholding
- Reconcile the outstanding PAYGW** liability against any unpaid PAYGW for the next Business Activity Statement;
- Reconcile any unpaid PAYGW to balance sheet with PAYGW liability;
- Check all PAYGW paid for the year is equal to payroll summary YTD tax amount; and
- Check all PAYGW paid for the month/quarter is equal to the payroll summary for the month/quarters.
Meet the End of Financial Year Deadlines
All payment summaries must be supplied to employees by no later than 14 July 2018, or every new financial year, even when the withheld amount is nil. These must also be lodged with the Australian Taxation Office (ATO) by 14 August of that year as part of the payroll processes.
Lodgements can be done electronically through your ATO business portal or the ATO’s BAS Agent portal. Otherwise, a registered accountant like Online Tax Return can assist you with lodging.
Payment summaries must be provided to employees at the end of financial year, showing a breakdown of their pay and taxes paid within that financial year.
You can supply payment summaries electronically or on paper. If you choose to supply them electronically, you need to advise employees on how to access their summaries and make printed versions available upon request.
All electronic summaries must be:
- Provided in a non-editable format;
- In letter-quality print and accessible to read; and
- Transmitted via electronic means to the intended employee.
You will also need to notify your employees, current and past, when the payment summaries are available and how to access or print them. Any electronic distribution must be made with security of their information in mind, in line with obligations under tax and privacy laws.
Let Online Tax Return Give Your Payroll Processes a Tune Up This End of Financial Year
Whether you’re a small, growth or big business, tax season can be daunting. Don’t let the paperwork get to you. Your local Perth accountant team at Online Tax Return can assist you to streamline your end of financial year payroll processes. We work with a range of businesses and individuals, providing financial services from online tax returns to accounting support.
Let the team at Online Tax Return make your July simple. Contact us today to get started!
*YTD = year to date
**PAYGW = pay as you go withholding
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.