Happy New Year from Quarles – Year-End Payroll Checklist & Single Touch Payroll

Quarles Business & Financial Strategists wishes you a Happy New Financial Year. Here are some tips for Payroll Administrators for closing off last year and dealing with the changes coming up in 2018-19.

Year-End Payroll Processing

If you run a Payroll in Xero or another system, here are some tips for closing off the old year and issuing PAYG Summaries:

1. Check your Payroll Settings – ensure your employee and employer details are complete and accurate. Make sure your mapping from Payroll to General Ledger is correct.
2. Check that your Payroll Data is complete – ensure that all pay runs have been posted. Check that all pays appear on the business bank statement and that the dates match.
3. Reconcile Payroll Totals to General Ledger Balances – run Payroll Summary Report and confirm that Total Earnings, Total Tax and Total Super match the General Ledger Balances. Check that Payroll Deductions have been paid and Reimbursements have been correctly posted in the General Ledger. Ensure Wages Payable account has a nil balance. Ensure Salary Sacrifice Superannuation Contributions have been processed as Superannuation, not Deductions.
4. Run Payment Summaries for Employees – confirm details are correct. Add Reportable Fringe Benefit and Lump Sum amounts. Finalise and send the Payment Summaries to employees.
5. Send PAYG Payment Summary Annual Report to ATO – depending on your software, this can be done from within the software (Xero) or by exporting a data file from the software (MYOB).

Single Touch Payroll (STP)

STP is a system whereby employers are required to report wage, tax and superannuation data to the ATO immediately following each pay run.

In theory, STP applies from 1 July 2018 for businesses with more than 20 employees (at 1 April 2018). In practice, the software suppliers have been tardy in their preparations and most have been issued with an extension by the ATO.

Xero will roll out STP on a client-by-client basis over the next six months. Xero Payroll users can expect a message to pop up when STP is available to them. As STP removes a lot of the flexibility currently available to employers, we recommend that you DO NOT ENABLE STP until as late as possible, which will be when Xero’s extension expires in December 2018.

Employers with less than 20 employees are not required to commence STP until 1 July 2018.