Payroll Year End Tips – Step by step guide

Step 1:

Process the last pays for the year – make sure that any electronic and payroll clearing accounts have zero balances.  Make sure that your bank reconciliation is completed and no payroll payments are in there as unreconciled.

Step 2:

Print  (or PDF and save) the key payroll reports – generally, the reports that I would print would include a payroll summary for the year, a report with details for each employee’s pay, an entitlement report to show me leave owing, any reports that will allow me to reconcile my payment summary totals to my payroll (MYOB has a great verification report at the end of the Payment Summaries that I use for reconciling to the payroll summary report.  I usually run through the Payment Summary screen to get to this report, print it off and then go on to do my reconciliations before finalising the Payment Summaries)

I would run my eyes over the summary report to make sure that the super reported for each employee looks correct, and investigate any discrepancies to make sure that there are no errors in the superannuation calculations and setup.

Step 3:

Reconcile your payroll expense accounts to your payroll summary report (ie your gross wages add to the balances in your accounts for wages, and any other accounts that you may have split wages to.  Your superannuation expense account should agree to the total of superannuation paid for the year less any super paid in the current year for the prior year and plus any super that will be paid in the next year for the current year).

Step 4:

Reconcile PAYG withholdings account. Treat it like a bank reconciliation.  The balance should be zero, except for the PAYG to be paid in July.

Step 5:

Reconcile your Superannuation Owing accounts.  Again, treat it like a bank reconciliation.  The balance should be zero, except for the current year super to be paid in July.

Step 6:

Reconcile your PAYG and wages reported on your BAS against your payroll summary report.  You should reconcile this against what you have reported to the ATO throughout the year – there may need to be a revision to your prior BAS if you have made errors, for example, if you have put in a payroll adjustment after submitting your BAS, or if you have forgotten to deduct salary sacrifice from the gross wages when reporting the BAS.

Step 7:

Reconcile your Payment Summaries to your payroll summary report (in MYOB use the verification report)

Step 8:

Print Payment Summaries

Before preparing your payment summaries:

  • Make sure your employee cards contain a current address (including a city and postcode) and a tax file number.
  • For workers paid under labour hire arrangements, make sure their employee card has the  Employment Basis set to Labour Hire
  • Get the figures for any fringe benefit amounts from your accountant, and reportable superannuation amounts for your employees.
  • Know which employees have been terminated during the year, and if there are any complicated terminations that include Employee Termination Payments or Lump Sum Payments – again you might want to liaise with your accountant over these.

Step 9:

Save! Create a folder for 2017 payroll year (somewhere confidential).

Save your payroll reports, save your EMPDUPE file, save pdfs of your Payment Summaries, and take a backup of your accounting file (except for Xero users).

Step 10:

Close the payroll year and start your new year.

Step 11:

Load new payroll tax tables

Step 12:

Distribute the Payment Summaries to your staff by July 15

Step 13:

Wait for any feedback from your employees.  You have approximately another month before the Empdupe file needs to be provided to the ATO

Step 14:

When you are confident that the Payment Summaries are correct, then you can submit the Empdupe

Step 15:

Do your Worker’s Compensation return

Step 16:

Do your Payroll tax return.

 

If you need help, organise for one of our team to help you out with the process.

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