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Preparing for 21/22 EOFY

With the End of Financial Year almost upon us, it’s time to ensure that you are prepared and ready to lodge your finalisations event(s) to the ATO.
Published 21 Jun 2022
4 min read
Preparing for 21/22 EOFY

NB: This blog is relevant for businesses that have been reporting to the Australian Taxation Office (ATO) for Single Touch Payroll (STP) during this financial year, as well as businesses not exempt from STP reporting. Businesses exempt from reporting STP can refer to our EOFY Payment Summaries Guide or see our on-demand webinar

With the End of Financial Year almost upon us, it’s time to ensure that you are prepared and ready to lodge your finalisations event(s) to the ATO.

Here’s a helpful list to support you in preparing and lodging this financial year.

Let’s get started!

It’s important to do some housekeeping before a finalisation event is lodged to the ATO. Here are the recommended checks and reconciliations that should be completed to ensure all business and employee details are correct:

1. Review employee details

Check all employee details are up to date, particularly the employee’s tax file number, email, and postal address. Make a note of any closely held employees or foreign employees as these might be reported on separately. A quick way to audit this information in Employment Hero is by running an Employees Details Report. Learn more.

2. Review FBT settings

Are you exempt from FBT under section 57A of the FBTAA 1986? By default, this option will be set to ‘No’ on the ATO Settings page, but it’s important to review this and ensure reportable fringe benefits amounts are reported correctly in the finalisation event. Learn more.

3. Review pay categories

As part of STP Phase 2, the ATO has new regulations around the disaggregation of gross income, so it’s important to ensure that pay categories are classified as per ATO requirements. Learn more.

4. Review deduction categories

There are new reporting requirements regarding deductions as part of STP Phase 2. Employment Hero has added a number of new classifications as well as two Salary Sacrifice classifications, to categorise the deduction types. Learn more.

5. Check opening balances

If you migrated from another system during the financial year, it’s important to ensure that the opening balances are set up correctly. Learn more.

6. Audit salary sacrifice super/RESC

It’s important to ensure all RESC amounts are correctly assigned. Errors in assigning RESC amounts will result in employee amounts not being reported correctly on their Income Statement and the employee potentially being stuck with a tax liability. Learn more.

7. Finalise pay runs

Ensure all pay runs with a date paid on or before 30 June 2022 are finalised to avoid having to lodge an amended finalisation event. Learn more.

8. Reconcile financial year data

A crucial part of wrapping up EOFY and reducing filing errors, is reconciling employee earnings reported via STP during the financial year, with employee earnings processed in finalised pay runs for that same period. Learn more.

9. Review lodgement authority is correct in ATO supplier settings

It’s important that you check that your supplier settings are correct with the ATO. Learn more.

Now it’s time to create the end of financial year finalisation event.

Employment Hero Payroll is an ATO-certified STP reporting solution and has an STP EOFY Wizard built right into the platform that simplifies the process of creating a finalisation event and lodging with the ATO.

With the STP EOFY Wizard, you’ll have the ability to:

  • Bulk import reportable fringe benefit amounts for employees;
  • Send notification emails from the platform once the finalisation event has been successfully lodged;
  • Process an event encompassing all pay schedules if you are dealing with businesses with less than 2000 active employees, as opposed to creating an event for each individual pay schedule;
  • Auto-calculate any variances between STP reported earnings vs earnings processed in finalised pay runs as part of the reconciliation process; and
  • Access the amended finalisation event wizard if further finalisation events are required.

If using Employment Hero Payroll’s STP EOFY Wizard, you’ll need to:

  1. Select the pay schedule
  2. Confirm the payroll data
  3. Enter reportable fringe benefits
  4. Enter foreign tax paid (if applicable), and
  5. Authorise and lodge the finalisation event

Reminder: Super guarantee contributions must reach super funds by 30 June 2022 to qualify for a tax deduction in the 2021/22 financial year. Finalisation declarations can be lodged to the ATO after the financial year up to the 14 July 2022.

Need help?

For a comprehensive guide to completing Year End processing in Employment Hero Payroll, refer to our End of Financial Year Guide here. We’ve also put together a list of FAQs based on the commonly asked questions around the finalisation event process. You can read them here.

Once completed you can do a celebratory dance before you think about preparing for the next financial year.

What’s next?

As we enter the new financial year, here’s a quick note on the upcoming changes to superannuation contributions.

The Superannuation Guarantee Contribution (SG) percentage will increase to 10.5%, effective for all pay runs with a date paid on or after 1 July 2022. The maximum quarterly contribution base will also increase to $60,220. Employment Hero Payroll will automatically apply these increases except when businesses have opted out of automatic super updates. Employment Hero HR admins will need to import the SG changes, view our step by step guide.

The $450 per month eligibility threshold for when SG is paid, is being removed.

We hope you found this article useful. Remember to check out our EOFY Support hub for any new information and advice.

The Team
Employment Hero -
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