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Paying Employees In Advance At EOFY

This article is for users who will be paying their employees in advance at the end of the financial year.

Important

  • This article is only applicable to customers that pay in advance on a weekly or fortnightly pay cycle only.
  • This article is not applicable if you pay employees in arrears or during the same calendar month as the pay period end (PPE) date in Wagemaster.

Over this end of financial year, some businesses that pay employees in advance may find that they will be processing a pay period end date that falls in July 2021 but will be making payment to employee’s bank accounts in June 2021. (This is called paying in advance as they will receive their wages for days that fall after the payment date).

Taking an example from the current year, as per screenshots below, week ending on Sunday 4th July/fortnight ending on Sunday 4th July/week ending on Thursday/Friday/Saturday/fortnight ending on Thursday/Friday/Saturday paid in advance in June 2021.

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In this situation, the ATO requires the business to report the employees taxable gross, tax paid and other ATO reportable figures for that pay period in the 2020-21 financial year due to payment being made in advance in June 2021 which is within 2020-21 financial year.

However, in Wagemaster employee ATO payment summary figures/STP reporting values calculate based on the pay period end (PPE) date of saved pay slips and not the bank payment date. This means that by default in Wagemaster, the taxable gross, tax paid and other ATO reportable figures processed on a payslip for a pay period end (PPE) date in July 2021, but paid in advance to employees on a payment date in June 2021 will not automatically appear in the ATO Payment summaries/STP Reporting for FY 20/21.

Wagemaster allows users to set their financial year-end date past 30 June which then allows pays with a July PPE date to be included in the current financial year’s reporting. You will need to adjust the taxation year-end dates.

To Adjust Taxation Year-End Dates

  1. Navigate to Setup > Preferences.
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  2. Click on Configuration > Period End > Edit.
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  3. Change the end date to when your pay period paid in advance ends. 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.     
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  4. By changing the End Date to 04/07/2021 any pays with a PPE date up to and including this date will be included in the current 2020/2021 financial year.

The above actions are not required if the payment date and the pay period end (PPE) date fall in the same financial year (i.e. both are in June or both are in July).

Important

  • 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.
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