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Adjust Taxation Year-End Boundaries For End Of Financial Year

This article is for users who have Determined Their Last PPE (Pay Period Ending Date) For EOFY and adjusting taxation year-end boundaries for the end of the financial year.Screenshot_2021-06-09_085549.png

If the change is required, it needs to be made prior to saving your last pay in 2020/2021
financial year.

Please Note

If you have a weekly or fortnightly pay period, PPE date of June 2021, and your EFT payment date is before Thursday 01 July, you can skip this step. This step can also be skipped if you have monthly pays, with a PPE date of 30 June and an EFT payment date before 01 July.

If the pays for the last PPE date in June is paid to employees in June, then no action is required. Or if the first PPE date in July is paid to employees in July, no action is required.

Tip 

If your PPE is 27/06/2021 and you transfer your employees' wages on Monday (28/06), Tuesday (29/06) or Wednesday (30/06) then you don't change your taxation year boundaries.

If payment to employees is made in arrears, i.e. if your first PPE date in July is transferred to your employees' bank accounts with a payment date in July, don't change your taxation year boundaries.

The last Sunday of the 2020/2021 financial year falls on Sunday 27th June. So, if your company has a PPE on or before 27th June 2021 where the payment to staff will be received on or after 1 July 2021, this payment needs to be reported in the new financial year, not the 2020/2021 financial year.

For Example (Please note the example is not likely to occur in the 2020-21 tax year)

  1. If you have a pay period ending on Sunday 27 June 2021 with payment being made into your employees’ bank accounts in July 2021, i.e. on Thursday 01 July 2021, then 27 June 2021 pay period end would need to be included in the next financial year (2021-22) and excluded from this year (2020-21).
  2. If you have the first July pay period ending on e.g. Sunday 4 July 2021 with payments made to employees’ bank accounts before 1 July 2021, i.e. on Friday 25 June 2021, the 1 July 2021 pay period end would have to be included in 2020-21 financial year reporting.

If (and only if) one of the above applies to your business for this year, you will need to adjust your financial year period end by changing the financial year-end date to: 

  1. The day before your last PPE in June (26/06/2021), which will exclude PPE 27/06/2021 from this tax year, or
  2. The day after the first PPE in July (05/07/2021), which will include PPE 04/07/2021 in this tax year.

Important

  • The Period End cannot be changed if you have already saved pays beyond that
    date
  • If changing the year-end boundaries for the taxation year, please consider carefully the date you are selecting. The system will not allow you to change the year-end boundaries date a second time for the same financial year.
  • Do not change the period end boundary if the pay period ending date and the payment date is in the same financial year.
  • Create a backup before you change the period end boundary.
  • By default, the period end boundary will be 01 July – 30 June for each financial year.
  • This procedure is only required in instances where either the pay period ending date falls on or before 30/06/2021 but the employees are not physically paid their wages until July 2021, or the pay period ending date falls on or after 01/07/2021 but the employees are paid in advance their pays in June 2021.
  • Once a pay cycle (PPE) has been processed past the set period end boundary date referenced in the Taxation Year Boundaries screen, these dates cannot be changed.
  • This procedure is ONLY applied in instances where the Pay Period End date falls on or before 30/06/2021 but payment processing and so STP Reporting Payment Date is July 1, 2021, or later.

In summary, the steps you need to take are outlined below:

  1. Will your wage and salary payments, for your last PPE in June (i.e. PPE 27/06/2021), be paid to your staff on or before 30 June. If the answer is Yes, go to Point 5.  If the answer is No, go to point Point 3.
  2. Will your wage and salary payment, for the first PPE in July (i.e PPE 04/07/2021), be paid to your staff before 1 July 2021. If the answer is Yes, go to Point 3. If the answer is No, go to Point 5.
  3. prior to processing pays for the affected pay period end go to File > Company Details > Configuration > Period End > Taxation Year Boundaries (detailed steps below):
    • If point 1’s answer (above) was No, change the end date to the day before the last PPE for June (i.e. 26/06/2021).
    • If Point 2’s answer (above) was Yes, change the end date to the day after the first PPE for July (i.e. 05/07/2021).
  4. You must make this change prior to processing the affected pay period, to ensure that the values are reported in the correct tax year.
  5. Process your payroll as normal and check that year to date values reflect the correct allocation of wage and salary payments to the correct financial year.

To Change The Taxation Year-End Boundary (If Necessary)

The End Date selected will always determine which financial year that the PPE date falls. This
Period End boundary acts as a divider to separate the PPE dates towards the End of June from
those in July. Where a PPE date falls on or before the End Date chosen, it would be deemed in
this financial year and typically the last Pay Period End date to use for processing EOFY.


Therefore, any PPE that falls after this Period End date would be deemed as the first PPE date to
be reported in the new financial year for Single Touch Payroll.


Once the Period End date is set for one year, the following date then automatically filters through
to be the Start Date of the next financial year.

  1. Navigate to Setup > Preferences.
    11.png
  2. Configuration > Period End.
    12.png
  3. Taxation Year Boundaries > select and edit the current FY.13.png

For Example (June Pay Period Paid In July)
The last PPE date for June is PPE Sunday 27/06/2021, but the employees will only receive payment on Thursday 01/07/2021. The end date for the current financial year will be changed to 26/06/2021 (the day before the PPE date that will be paid in July) in order to include this pay period in the new financial year. The new Financial year will begin on 27/06/2021.

Be careful with changing dates as the system will not allow you to do it for the second time. 

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For Example (July Pay Period Paid In Advance In June)
If the pays for the first pay period ending date in July are paid to employees in advance before the 1st of July, set the end date of the current financial year to a date after the appropriate pay period ending date (the day of the PPE date that was paid in advance in June) in order to include this pay period in the current financial year.
This will cut the taxation year boundary off a day later and ensure the entire pay period is included in the current financial year’s reporting.

Be careful with changing dates as the system will not allow you to do it for the second time.
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For example (Where Multiple PPEs (i.e. monthly and weekly pay periods) Are Contained Within The One Wagemaster Payroll Database)

There is a calendar month PPE 30/06/2021, processed and paid on 15/06/2021. In addition, there is a weekly PPE Tuesday 30/06/2021, processed and paid on Wednesday 1st July 2021.

In this example, the calendar monthly cycle would need to be recorded in this current financial year, but the weekly PPE cycle would need to be reported as the first PPE in the next financial year.

In this instance, the recommendation would be to change the calendar month PPE cycle to be a monthly cycle that ends 28/06/2021 (later dates are not possible) and then processed as anticipated on 15/06/2021.

To Align The Calendar Month (Pay Period Ending To Be A Monthly Cycle)

  1. Navigate to Setup > Preferences.
    11.png
  2. Configuration > Pay Periods > Calendar Month Cycle.Image
  3. Click on Edit to edit it to be a monthly cycle with a pay period end as of 28/06/2021.
    17.png

In this example, the taxation year-end boundaries will be as below:

  1. Navigate to Setup > Preferences > Configuration > Period End > Taxation Year Boundaries > select and edit the current FY end date to be 29/06/2021.18.png
  2. Once the period end boundary date is set for one year, the following date then automatically filters through to be the start date of the next financial year.
    • In the example above, as the taxation year boundary period end date selected is 29/06/2021 for
      the last day of 2020/2021 current financial year, any PPE dates that fall after 29/06/2021 will now be reported against the new 2021/2022 financial year for ATO reporting purposes. So, a weekly cycle PPE of 30/06/2021 will now report in the new 2021/2022 financial year and not the current 2020/2021 financial year.
    • After processing end of the financial year, and before processing the next monthly pay cycle on 15/07/2021, amend the monthly pay cycle back to the normal as below:
      • Frequency: Calendar Month with PPE: Last Day of Month.
      • Navigate to Setup>Preferences > Configuration > Pay Periods > Monthly > Edit > Change Frequency back to Calendar Month.11.PNG
  3. New functionality in the June 2021 release of Wagemaster will be this warning message about
    year-end boundaries and your final pay for the year. This appears in your system when your
    system date reaches June.
    19.png
  4. This warning will persist in June until you have visited Setup > Preferences > Configuration > Period End > Taxation Year Boundaries and ticked the box Reviewed Tax Year boundary for the current financial year.10.PNG
  5. If you have adjusted the taxation year-end boundaries then you will also need to Determine And Adjust Super Boundaries.

Continue To

How To Pay Employees In Advance At EOFY

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