June 30 marks the End of Financial Year in Australia. For a lot of businesses this doesn’t cause much stress at all, but for most Small Businesses that employ staff, the End of Financial Year can be quite stressful. In this blog I am going to take you through your requirements for the end of financial year and try to make it as stress free as possible.
Before you can begin we need to look at what is due and when.
Note: Staff must receive their copy by the due date
Payroll Tax Annual Reconciliation
Due: July 21st
Note: Each State & Territory has a different Annual Threshold for Payroll Tax, make sure you know what the Threshold is for your State or Territory. If your payroll is over the Threshold for your State or Territory then you are required to pay Payroll Tax. If you have not lodged your completed Annual Reconciliation and payment by this date then you will be fined a penalty tax of up to 25% plus interest.
Due: 28th July
Note: If you would like to claim superannuation payments in the financial year that the expense occurs, then you need to pay your Super Liability before June 30. That means funds must be cleared in your bank by the 30th of June. Any contributions paid after the 30th of June but before the 28th of July can be claimed as an expense but any Superannuation due for last financial year that is paid after the 28th of July can not be claimed as an expense.
Taxable Payments Reporting
Due: August 28th
Note: If you are in the Building and Construction Industry this applies to you
Due: October 28th 2015 or March 31st 2016
Note: Depending on your previous rateable remuneration, you will be either required to submit your Certified Rateable Remuneration by either of the above dates. If your remuneration is over $200,000 then you will be required to submit it by the 28th of October, if it is under $200,000 then you will be required to submit it by the 31st of March.
End of Payroll Year Processes
You have done all your End of Financial Year Bookkeeping Processes so now its time to do your End of Payroll Year Processes. Check the dates listed above and make sure that you meet all lodgement dates for each step.
General Payroll Reconciliation
The first thing you have to do is Reconcile the wages accounts so that you can make sure the allocations are correct. If you have a stand alone payroll program you should have been journaling in all your weekly/fortnightly payroll process into your accounting program. Or maybe your accounting program is where you process payroll as well, either way you will need to reconcile your Net Wages Liability Account and PAYG Withholding Account up to the 30th of June.
Annual Payroll Reconciliation
As Payroll is reported on your BAS and also via other methods, you need to make sure that all lodgements have the same figures reported on them. Firstly you need to start with doing an Annual Payroll Reconciliation for you BAS Lodgements.
This is done by gathering all your BAS’s and writing down what you have lodged for PAYG & Gross Payroll figures so far, then making sure that for June 30 you lodge the required amount so that what you lodge on your Payment Summaries equals what you have lodged on your BAS’s for the Financial Year. If you have lodged different figures then the ATO will contact you for an explanation.
Superannuation accounts also need to be reconciled so that you make sure you are picking up the correct allocation of Superannuation Expense and Superannuation Liabilities.
Once you have reconciled all your wages and superannuation accounts you will then need to Prepare Payment Summaries. In a previous blog I talked about how you needed to make sure your staff’s details where up to date in your Accounting Program so that Payment summaries would be easy to do, so if you have already done this, then now is the time to do so.
Each Accounting Program that is available will have a different method of of processing payment summaries, so please take the time to find out how to do them correctly in your Accounting Program.
Payroll Tax Reconciliation
The next step is to work through and lodge your Payroll Tax Reconciliation and then pay your Payroll Tax.
You will only have to do a Payroll Tax Reconciliation and lodgement if your Payroll Payments to your staff is above the thresholds listed below. I have also listed the Payroll Tax Rate for you so you can have some idea about how much you will be paying. Please note that you do not pay any Payroll Tax on any Wages and On costs under the threshold amount.
State Annual Threshold Payroll Tax Rate
|State||Annual Threshold||Payroll Tax Rate|
It is fairly easy to lodge a Payroll Tax Reconciliation. Once you have reconciled all your payroll, established if you need to make a lodgement or not, you then print your payroll report (containing Gross Wages and Superannuation) and a report picking up any subcontractors and log onto the State Revenue Office website and work through the lodgement process.
If you employ staff then you must have a WorkCover policy.
If you have a WorkCover policy then you will need to lodge a Remuneration Reconciliation. Depending on your previous rateable remuneration, you will be either required to submit your Certified Rateable Remuneration by either of the above dates. If your remuneration is over $200,000 then you will be required to submit it by the 28th of October, if it is under $200,000 then you will be required to submit it by the 31st of March.
Once you have established when you are required to lodge your Remuneration Reconciliation, then you need to use the same reports that you used for your Payroll Tax lodgement, picking up your Staff and Subcontractors. You then will need to review the new Financial Year and calculate the Wages and Subcontractor amounts for that year as well.
From that point it is just a matter of logging onto your WorkCover online account and filling in the remuneration lodgement form.
Once you have completed all the steps above you are nearly finished. Now its time to set up for the new Financial Year. You may need to start a new payroll year (depending on your accounting program). You will also have to upgrade your accounting program (if it doesn’t happen automatically) so that you can make sure you are current with the new Tax Tables and any other law changes.
There is also a Pay Increase of around $16 per week per person. Take the time to download your Award from the Fair Work website and increase your staff members to the new rate. Please note that this increase come into affect as of the 1st FULL pay after the End of Financial year.
Let me know how your End of Financial Year goes