As the financial year draws to a close, ensuring a smooth and precise transition into the new fiscal period becomes paramount. In this guide, we aim to tackle common challenges encountered during the EOFY (End of Financial Year) process and offer practical solutions to guide you through them. By following to these recommendations, you can streamline your EOFY procedures, mitigate potential discrepancies, and facilitate an accurate transition with exact financial reporting.
Handling RFBT for Previously Terminated Employees
If an employee has been terminated and finalized in a pay event within the financial year, they may not be visible in the finalization events.
If you need to include Reportable Fringe Benefits via STP (Single Touch Payroll) for such employees, you must either complete it in an update event by adding the relevant amounts, or utilize an amended finalization event. Further information can be found here.
Rectifying Incorrect ATO Settings
Discrepancies between the Total Reportable Gross from STP reports and the Gross Payments amounts downloaded from the STP section in Employment Hero Payroll may arise due to Salary Sacrifice deductions from employee wages.
STP pay events submitted for STP2 reporting requirements must include the total pre-sacrificed gross payments to employees, with separate reporting of Salary Sacrifice/Pre-tax deduction amounts.
These figures are utilized by the ATO to compute "employer (payer) totals," which are then integrated into your ATO platform for W1/W2 prefilling of activity statements. Therefore, slight variations may occur in the calculations of these two "Gross" amounts.
Running an Update Event Post-Amended Finalisation Event
The conclusion of each financial year necessitates a Finalization or Amended Finalization Event, as this action establishes the Tax Ready Status with the ATO.
If you have conducted a Finalization Event followed by an Update Event, the Tax Ready status of your employees may have been affected.
Consequently, you will need to generate and lodge an amended finalization event to fulfill your EOFY requirements.