Your EOFY Payroll Checklist for FY24-25
Contents
- Step 1: Plan for minimum wage increases
- Step 2: Pay your superannuation contributions
- Step 3: Review WorkCover
- Step 4: Reconcile payroll in preparation for STP finalisation
- Step 5: Complete STP finalisation
- Step 6: Apply the National Minimum Wage increase
- Step 7: Update your charge out rates
- Step 8: Review payroll tax
- Step 9: Apply the Super Guarantee increase
- Step 10: Check your PAYG tax rates
- Navigating payroll at the end of the financial year
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The end of the financial year can be a challenging time if you work in payroll. Any discrepancies in your payroll data may start surfacing, as you start reconciling and reporting to the ATO. New minimum wages also start kicking in in the first pay cycle in July and it’s critical to roll out these increases correctly, or you could start paying employees throughout your workforce incorrectly.
Having been through the end of the financial year payroll process many times alongside our customers, we have developed a bunch of tools that will lighten the workload. These resources help you complete your tasks with more ease and accuracy, ensuring you have a smooth transition into the new financial year.
So, if your team is feeling apprehensive about June 30, here is our end of financial year payroll checklist that they can use to start planning upcoming tasks. Remember to combine this general checklist with your own business requirements and professional advice.
Step 1: Plan for minimum wage increases
When you roll out minimum wage increases, you need to make sure that the positions saved on their employee profile are correct. This ensures that the right pay rates apply to all of your employees as soon as new pay rates kick in. You can also use foundU’s wage increase tool to address above-award rates if you want to pass the increases on.
Reviewing your employee data well before applying your wage increases gives you time to make any updates and source the required information from your team.
If you’re a labour hire or recruitment business, you should start planning your charge out rate increases. This will make sure that your invoices are automatically updated when your wage costs rise, protecting your margins and helping you bill your clients accurately.
Once you have checked the integrity of your employee data, start planning when you will perform wage increases and set the time aside.
Step 2: Pay your superannuation contributions
Check the payment deadlines for superannuation contributions that need to be received by superfunds for the current financial year. Super has to be paid at least every three months into your employee’s nominated account and it’s essential that you submit the final payment for the financial year on time. Remember that your payment will need to be transferred from your clearing house to the employee’s super account, so you should leave enough time for this transfer.
Step 3: Review WorkCover
Prepare to renew your WorkCover Accident Insurance policy by declaring your wages and paying your premium between July 1 and September 30. Remember to check and increase your WorkCover rates where applicable.
Step 4: Reconcile payroll in preparation for STP finalisation
After the last pay cycle of the financial year, you need to submit your last Single Touch Payroll (STP) batches to the Australian Tax Office. Check your employee lists, payroll data, and STP reports to make sure that pay, deductions, leave entitlements, income type, and allowances are categorised correctly and matching.
Taking the time to reconcile your payroll data ensures that the data you send to the Australian Tax Office (ATO) is correct.
Step 5: Complete STP finalisation
Employers reporting through Single Touch Payroll (STP) need to make a finalisation declaration, usually by July 14 each year. This is how you let the ATO know that your STP reporting is complete for every employee.
Make sure that all employees who are no longer with your business are terminated before completing this step (particularly if you have a large, casual workforce). If you provide your employees additional benefits, you may also need to import Employee Fringe Benefits and submit them to the ATO.
Once STP finalisation is complete, remember to notify your employees so they can submit their tax returns. You can use automated email notifications in foundU’s payroll system to make this easy.
Step 6: Apply the National Minimum Wage increase
The Fair Work Commission typically increases the National Minimum Wage in July each year. You should also check for award minimum wage increases around this time. Once new wages have been announced, you can schedule increases to the relevant awards using foundU’s minimum wage increase tool.
Action this after pay guides are released. This helps you avoid classification errors and that the wage rates you use in your payroll system match the guide exactly. This prevents underpayment and ensures compliance with award rates. If you’re using foundU, you can schedule the rate rises to take effect in the first full pay period in the new financial year.
Scheduling your rate rises in advance will take the pressure off your team. Your timesheets will also automatically be updated after the scheduled date, helping you to forecast how your wage costs will be impacted.
Step 7: Update your charge out rates
If you are a labour hire business, you should update your charge your charge out rates. You can update these rates in your settings at the same time as you apply your minimum wage increases, or afterwards by exporting the old version and importing the new one.
Step 8: Review payroll tax
Check and update payroll tax rates that are effective from July 1. You can use the Australian Tax Office’s payroll tax tables to work out how much to withhold from payments you make to your employees or other payees throughout the new financial year.
You should also complete your annual payroll tax return to report on your taxable wages, while calculating and paying your liability for the year.
Step 9: Apply the Super Guarantee increase
The Super Guarantee may increase in the new financial year, so make sure that you implement the new rate in your payroll platform effective from July 1. If you’re using foundU, this will automatically be implemented for you.
Step 10: Check your PAYG tax rates
Make sure that your tax rates align with any changes made to income taxes. If you’re using foundU, the tax tables will automatically be updated from July 1.
Navigating payroll at the end of the financial year
We know that EOFY can be a daunting time. There is a lot of data to reconcile and report. Remember that if you’re using foundU, you can access plenty of end of financial year payroll tools that streamline the entire process for you, as well as plenty of on-demand resources and helpful customer support services.
Interested in learning more? Book a demo of foundU today.
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