This article will guide you through the process of wrapping up the FY2015/2016 financial year, producing your PAYG Payment Summaries (group certificates) and then getting ready for the FY2016/2017 financial year.
You can also watch the following video for handy EOFY tips and tricks.
These steps should be taken prior to producing the Payment Summaries:
1.1. Review Configuration Data
- In the employee file, select "Details" and ensure employee details are up to date. In particular email addresses. Payment Summaries will be sent to these addresses so it is important that they are correct. However, they can be printed and dispersed manually.
- In the employee file, select "Tax File Declaration" and ensure Tax File Numbers (TFN) and the Employment Declaration is correct. This information is included in the "EMPDUPE" file that is sent from your payroll data to the Australian Taxation Office (ATO). A quick way to check the employee details is to export the employee list and review the data in Excel. You can find steps on how to do that here
- Ensure your "ATO details" are up to date. You can do this by going to "Payroll Settings" -> "ATO Settings".
If you're planning on lodging your payment summaries via SBR, please ensure you've registered your software ID by following the steps here
- Review your set of Pay Categories. Ensure that the 'Payment Summary Classification' field is correct (See image below).
The primary cases that you'll want to review are allowances. Use this ATO article on Withholding from allowances as a guideline. You will want to set the 'Payment Summary Classification' to 'Allowance' if the article indicates to show the allowance separately in the allowance box.
When paying out Lump Sums refer to the ATO website for guidance on which Lump Sum category, eg. A,B,D or E to list the payment. Or you can find information in the instructions section of the ATO hard copy form PAYG payment summary - individual non-business (NAT 0046-02.2014).
- Review your set of Deductions. For any 'union fee' or 'workplace giving' deductions, be sure to adjust the 'Payment Summary Classification' field accordingly. See the image below re setting the classification.
1.2. Initial Values / Opening Balances
If you have migrated to this payroll system from another system during the financial year, it is important that the opening balances be set up correctly. Please refer to our article on setting employee initial values / opening balances.
If you created your business in the previous financial year but didn't start using it until this financial year, it may be necessary to review this setting under Business Details.
If there are any opening balances for deductions that should be reported as Reportable Employer Super Contributions (RESC) on the payment summary, be sure to tick the checkbox next to the deduction category in the opening balances screen.
1.3. Finalise Pay Runs
Ensure that all pay runs are finalised, including any adjustments you need to make.
Please Note: The date the pay run is PAID determines which financial year that pay run applies to. Therefore payment summaries generated, will only include for FY 15/16 any pay runs PAID within that financial year.
E.g. Pay run period ending 29/6/2016, PAID 30/6/2016 will be included in financial year 15/16.
Pay run period ending 29/6/2016, PAID 1/7/2016 will be included in financial year 16/17
If you want to include every day worked within the financial year, you might have to split a pay run.
For example, a Weekly pay run for period ending 2/7/2016, paid 3/7/2016. Create pay run as normal and set the pay period ending 30/6, ensuring you stipulate date paid to be 30th June. You will then need to adjust the employee hours to reflect the hours worked for the 26th - 30th June and then finalise pay run. Then create another pay run for the period ending 2/7 and adjust the employee hours to reflect the hours worked for the 1st and 2nd. Then finalise pay run using normal date paid, e.g. 3/7/2016.
1.4. Reportable Employee Super Contributions (RESC)
RESC will be automatically included on the Payment Summaries. This data will be generated from any pre-tax deduction that is paid to a super fund. Any RESC for this financial year prior to migrating to this payroll system can be set up in the Initial Values/Opening Balances section. Refer to step 1.2 above.
1.5. Reportable Fringe Benefits Tax (RFBT)
RFBT can be entered manually once the payment summaries are generated. To do so, click the 'Actions' button next to the payment summary and click 'Edit'.
The Reportable Fringe Benefit Amount (RFBA) field is open to enter in a dollar amount.
You may need to seek advice on which FBT deductions are reportable.
2. Payment Summary Generation
Ready to proceed?
- Once you have completed the steps above, you will be ready to publish employee payment summaries. Please refer to the steps on that article to produce the payment summaries and then continue here.
- Once your payment summaries are generated and published, you will want to submit your payment summaries to the ATO. You can lodge payment summaries either by:
There are several considerations for the new financial year:
3.1 Tax Table Updates (information only)
The tax tables for the new financial year are automatically loaded (and have been done so already). Please note that any pay runs with a date paid of 1/7/2016 or later will use the FY2016/2017 tax tables automatically.
In addition to the tax table updates, Employment Termination Payment (ETPs) calculations have been updated according to the new ETP / Lump Sum D thresholds issued by the ATO. This will take effect for pay runs with date paid on or after 1/7/2016
3.2. Superannuation Updates (information only)
The Superannuation Guarantee Contribution (SGC) percentage does not change for this financial year. It remains at 9.5%.
The Maximum Quarterly Contribution Base will increase from $50,810 to $51,620. This setting will be automatically applied to all employees who are currently on the default contributions base on 1/7/2016. Employees that aren't on the default setting will not be updated so you will need to do this manually.
3.3. SuperStream Compliance (information only)
The payroll platform is fully SuperStream compliant and has attained Gold certification. You can read all about it in our SuperStream Compliance article. It is important to note that all businesses must be SuperStream compliant by June 30, 2016.
The easiest way to ensure you're SuperStream compliant is to register with ClickSuper and use our in-built integration. You can find out more about registering with ClickSuper here.
To ensure your super payments are processed and deducted from the 2016 FY, you need to make sure your super payments are lodged no later than 1PM, June 21st. If you don't lodge your super batch by 21st June, there's no guarantee that your funds will clear by June 30.
3.4. Award Updates
This year, FairWork has increased the national minimum wage by 2.4% and as such employers will be required to review their award rates from July 1.
For customers using the pre-built Industry Awards, new versions of these Award packages will be published on 1/7/2016 with the applicable rate changes included. Once you have wrapped up the FY2015/2016 financial year and are ready to start processing pays in the new financial year, there will be an action item on your dashboard:
Click the 'Apply Updates' link and follow the prompts to update your award.
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