It’s a new financial year. HAPPY NEW FINANCIAL YEAR EVERYONE 🎉
We know, we know… you’re still having EOFY nightmares, your brain has just about had enough of tax declarations, business budgets and expense claims.
But the beginning of the new financial year is an important time for any company. You want to make sure you kickstart Q1 with a bang and that everything is aligned to make it your best year yet!
With that in mind, we’ve put together a list of major things you should review at the start of the new financial year. Think of it as a little spring cleaning session for your company and accounts.
1. Payment Summaries or Not?
STP is now mandatory for companies with under 20 employees from July 1. Many of you will have already implemented software like HeroPay that is STP compliant, but you’re probably getting a few questions from employees about payment summaries. Here’s the deal; any wages or salaries paid with STP software don’t require payment summaries. Employees can access summaries through their MyGov accounts (we’ll come back to this in a second).
For any pay runs conducted without STP, you will need to issue a payment summary. For example, if you implemented STP in February, you would not need payment summaries for each pay run between February and now. You would need a payment summary for any pay runs you conducted prior to February.
If your employees don’t have a MyGov account, they can sign up for one and see the information there. If they don’t want a MyGov account, they can contact the ATO and request their payment summary (this should be available around mid-August). This is a very small pitfall of STP’s introduction, but one that can’t be avoided.
2. Do a Data Cleanse This New Financial Year
As you collected everything you need for the ATO, it’s a perfect opportunity to kill two birds with one stone this new financial year. If you’re not using a cloud-based HR or payroll platform like Employment Hero, you’re probably inundated with paper.
Sort through what you need, what needs to be stored and what can be culled. Remember, things like contracts need to be on file for at least 5 years (check your state legislation for the minimum requirements).
3. Review Employment Contracts and Certifications
On the topic of employment contracts, make sure all current employees have a valid employment contract and ensure its clauses are still relevant to your business. You should also review your team’s certifications or right to work documentation to make sure nothing has fallen by the wayside.
If you’re using Employment Hero, simply run a compliance report and you’re all done!
4. Review Annual Leave Debt
Employee loyalty is one of the hallmarks of a successful business. If you have staff members who have been part of your company for years, give yourself a big pat on the back for cultivating a culture where employees are keen to hang around. At the same time, keep an eye on their annual leave accruals.
Circumstances can change at any time, and annual leave payouts can be a massive burden on businesses if they haven’t been keeping an eye on the buildup. If you don’t already have one, an annual leave policy is a smart idea to ensure that employees take annual leave regularly and don’t have several months of annual to pay out.
5. Review Employment Legislation
The new financial year is a great time to cover your bases and ensure you’re up-to-date on the legislation in your state. Employment Hero has a team of in-house lawyers that do the hard work for you, but if you’re not using Employment Hero (yet!), double check you’re above the line. If you have made a mistake, don’t stress.
The ATO doesn’t deserve the level of fear people attach to it. Simply let them know and work with them to find a solution. If you self-report, it’s not the end of the world!
There you have it. Five simple steps to make sure you’re kicking off the new financial year on the right foot.
Another top tip – you want to make sure all your awards are updated. This can be a real laborious task. But luckily for you, this can all be done through the Employment Hero platform, with a feature we call HeroPay. Find out more here.