With the rollout of Simplified Touch Payroll process being adopted by most businesses from this year onward, the end of year payroll process is certainly a whole lot more faster and efficient than ever before.
BUT it does involve a few IMPORTANT and extra steps to ensure it’s properly reconciled before pressing the “Finalise and Submit to ATO”.
The ATO deadline to make the Income Statements (Replacing Payment Summaries) available to your employees is 14th July. We recommend you don’t rush to complete them for your employees at break neck speeds but that you take the time to ensure they are right.
Your end of year procedure should include the checklist provided by your software provider, and incorporate the ones listed below for completeness.
- Review your annual payroll report to ensure the gross wages and tax withheld agree with the amounts reported on your activity statements for the year.
- Ensuring any salary sacrifice arrangements such as pre tax deductions for super or vehicle packaging are not included in the gross salary on the summary.
- Include the reportable fringe benefit amount as advised in the appropriate label of the summary. Note this isn’t required if the reportable amount is below $3,773 for each applicable employee.
- Ensure only the amount of superannuation contributed in excess of the SGC amount is disclosed as a reportable superannuation contribution amount.
- Ensure only taxable allowances are on the summary.
- CRITICALLY and the final step, reconcile gross wages, taxable allowances and superannuation with the amounts expensed in your profit and loss statement or charged to the provision for leave. This step is required so that any differences can be identified and accounted for appropriately before submitting. It will also assist with the end of year payroll tax reconciliation if required.
- If you have only started reporting via STP part way during the year, this is OK as your payroll software will pick these unfiled pay runs up automatically in the End of Year Process
If you need any assistance, don’t hesitate to reach out to us.