This article contains some of the frequently asked questions regarding the end of financial year processing in Wagemaster.
1. Do we still need to print ATO Payment Summaries?
- ATO Payment Summaries have now become an optional step; they can still be printed from Reports > ATO Payment Summaries > Print Individual ATO Payment Summaries. Follow the help article here for more details: Produce ATO Payment Summaries.
2. How do we get our final figures to the ATO?
- This is done by reporting an STP Update that has the Final checkbox ticked for all employees. STP Update with Final checkbox ticked will also set the employees' myGov accounts to Tax Ready.
- Select STP from the Standard Toolbar. Select STP Update. Ensure the All Employees tickbox is ticked and the correct Financial Year is displaying > click OK. When you are ready to report the STP Update, click Report to ATO. The Update Event Declaration window is displayed. Tick the declaration and report. The STP Update header will show zero values. Double click the Update Event line and you will see your employee's values. All values reported to the ATO are always the employees' latest YTD values and never per period values. For more details: How Do I Finalise My Year And Notify The ATO Of Final EOY Values?
3. Do we need to roll over our information at end of the year?
- No, backup as normal and change your PPE date to a July date to process your first pay in the new financial year. All your yearly balances are reset automatically. If you need to go back to last year’s figures change the pay period ending (PPE) date back - all your information will still be there. Please ensure you have performed relevant end of financial year tasks communicated via Agrimaster email communications (such as updating Tax Tables) prior to processing your first payroll in the new financial year. The communications and relevant documentation is also available at our Help Centre.
4. When is the end of the financial year?
- Once you have completed your last pay in June, you are ready to begin the end of financial year processing. Your last payroll of the financial year will be dictated by the date you selected as your period end date. (Setup > Preferences > Configuration > Period End > Taxation Year Boundaries).
- The default Australian dates are from 1 July to 30 June the following year and contain all pay period ending (PPE) dates that fall in this range. If you need to change your period end date so that the last pay period in June is pushed into the new financial year or the first pay period of July is pushed back to the current financial year, this must be done before you process that payroll.
- Do not change the period end boundaries if the employees receive the funds in the same financial year as the pay period end (PPE) date.
5. I have a tight timeframe and I cannot do my EOFY for 2020/21; can I commence my first pay period for the new financial year without producing the ATO payment summary and/or STP Update marking all as Final for 2020/21, and then go back to process my EOFY process for 2020/21?
- You can go ahead, and process pays beyond 30 June 2021 before producing your STP Update marking all as Final and (optional) employee individual ATO payments summaries. However, please do not do this if your circumstances require you to change the period end boundaries and you have not yet done so. Saving pays beyond the existing taxation year period end boundaries means you will not be able to modify the period end date for that taxation year if required. You will also need to ensure you have updated the FY2021/22 tax tables as communicated via Agrimaster communications.
6. What is housecleaning and do we need to perform it?
- Housecleaning is only recommended under specific circumstances. Housecleaning is a process that will remove information relating to the previous financial year(s) from your Wagemaster database.
- Please note that if you perform a houseclean, your pay period ending dates, payslips, terminated staff from June last and prior years will all be deleted. We only recommend housecleaning if you have a large staff turnover and the processing/performance of payroll tasks is affected. It is recommended to keep at least two year’s financial data in the copy of the database that will remain in the live database (7 years is ideal however may not be practical for all customers).
- Employers are legally required to keep time and wage records for 7 years so ensure that if you do not have this number of years of payroll data in your live database that you at least maintain archived databases to meet this requirement: Record Keeping. It is imperative that you archive reports and take archive backups of your data prior to housecleaning.
7. Can I delete employee files?
- We do not recommend deleting employee files outside the housecleaning process. Businesses are required to keep payroll records for a minimum period of 7 years, so we recommend you ensure that you are meeting legislative requirements for business record keeping before any employee files are deleted. The housecleaning process requires you to backup so that you can always refer back to historical data from a prior period. Deleting employees in an ad-hoc way will make it very difficult to locate this type of historical information.
8. What is RESC?
- RESC is an acronym for Reportable Employer Superannuation Contributions. It relates to superannuation payments received by an employee, in addition to the standard Superannuation Guarantee Contribution (currently 9.5%, increasing to 10% for the 2022 year), that the employee has control over. Typically, this will be salary sacrifice superannuation amounts and employer additional amounts where the employee has influenced the amount paid. These amounts will also typically be pre-tax or based on payments pre-tax. This does not include employee contributions made after-tax.
- More information can be found on the ATO website. To ensure these benefits are recorded correctly you need to flag them as RESC payments. Go to Employee > Payments > Superannuation > Edit Salary Sacrifice or employer additional and tick the RESC box.
9. What should I do if I will have 27 fortnightly pay periods and/or 53 weekly pay periods in the 2021/2022 financial year?
- You should take action with regards to this as soon as possible as doing nothing may result in your employees being undertaxed by the end of the 2021/2022 financial year. Please see the ATO website for further information regarding 53 weeks and for 27 fortnights.
10. My allowance is not showing in STP even though my Setup > Allowance > ATO Payment Summary screen is setup to Report in STP?
- Set PPE date to a date in the correct financial year, i.e. a June 2021 date.
- From Setup > Allowances, go into the individual allowance (e.g. JOBKEEPER-TOPUP), ATO Payment Summary (tab) and untick the Show on ATO Payment Summary box and Close allowance.
- Go back into the allowance, ATO Payment Summary tab and tick Show on ATO Payment Summary box and apply the above change(s) to all employees who have been paid this allowance for the current financial year. Ensure Report in STP is ticked and ATO Type is Other, then Close allowance.
- Check the Pay Sum box is ticked in the Employee files by either going into Payments > Allowances within the employee record or from within the Allowance setup itself, from the Employees tab and Employee file.
Please ensure that both boxes are ticked on the ATO Payment Summary screen.
11. Are there any changes to superannuation obligations for 2021/2022?
- The superannuation guarantee will change this year and increase to 10%, the quarterly contribution cap (Max Contribution Base) has increased from $57,090 to $58,920. Superannuation contribution quarterly cap updates will need to be performed within individual awards.
12. Are there any changes to the tax tables for 2021/2022?
There were no changes announced to personal income tax rates or thresholds.
There are still several tax changes that take effect from 1 July 2021.
Tax changes, effective from 1 July 2021 are:
- Component D ETP caps and the ETP Lower Cap Amount.
- Change to the Study & Training Support Loans (STSL), previously called HELP, tax scales.