End of Financial Year: Your burning questions answered

The end of the financial year (EOFY) is nearly upon us – are you ready for the 31st March? We know that it can be a daunting time for business leaders, but ensuring that you’ve filed the correct information doesn’t have to be complicated. All it takes is a little bit of preparation and knowledge.

With that in mind, we presented the most frequently asked EOFY questions to Employment Hero’s NZ payroll expert, Shelley Costello. Shelley has years of payroll experience and knows exactly how to streamline EOFY so that you can breeze past the next few weeks.

What are the most important steps to take when preparing for EOFY?

Shelley says, “It’s crucial that you reconcile payday filing between your payroll platform and what has been reported to IRD. You will also need to update any employees who are on minimum wage to the new minimum and will review employer superannuation contribution tax (ESCT) rates for each employee.”

Any business leader knows that making sure all their financial calculations are correct is super important. EOFY is a time when you ensure that everything you’ve been sharing with IRD is accurate too, so that you’re not caught out.

As Shelley points out, there’s also the new minimum wage to consider. As of 1 April 2024, the new adult minimum wage will be $23.15 gross per hour, and the start-out and training wages will go up to $18.52 gross per hour.

When should EOFY preparations begin?

Shelley says, “If reconciliations are done every month, there shouldn’t be a lot of preparation. If this isn’t the case, then reconciliations should be done during the month of March, leading up to the end of the financial year.”

We know when you’re running a busy company, it can be hard to find time for regular admin. However, no one likes a hectic month of March either! Make sure that your monthly processes are comprehensive enough that you save yourself some critical time at EOFY. If you’re super-savvy, you might choose payroll software like Employment Hero Payroll that can do the bulk of payday filing for you.

Are there any additional tasks that aren’t compulsory, but could be useful to complete at EOFY?

Shelley says, “Definitely. Use this time to run any reports required by your accountant, review employee work patterns to ensure they are correct and review casual employees to ensure they are still casual.”

Since you’re getting stuck into records, you may as well use this time to do a bit of an audit. Employee work patterns are the sort of thing you can’t afford to get wrong, as you’ll want to be paying your employees correctly. The patterns that your employee works can also affect whether they’re defined as a casual employee or not – a regular work pattern could mean they’re entitled to become permanent.

If you’re not sure whether an employee of yours is meeting requirements of a casual working arrangement, check out the Employsure guide here.

What do you find is most often forgotten during EOFY?

Shelley says, “People most frequently forget to review employer superannuation contribution tax (ESCT) rates for all employees.”

You’re making time for admin, so use this time to check your employees all have the correct individual ESCT rate. There’s a handy calculator on the IRD website to help you out.

Where does payroll software come in useful for EOFY?

Shelley says, “Payroll software can give you visibility over your business and acts as one central digital source of information. For example, Employment Hero has a specific report to help you with the update of the employee ESCT rates. Everything required for EOFY is stored through Employment Hero, including payday filing details, electronic timesheets, leave applications and documents.”

Let’s banish filing cabinets for good – today’s digital solutions render the need for paper completely useless. Payroll software can be your best friend for EOFY, so now is as good a time as any to really reap the benefits.

Consider which payroll software would be suited to your needs and bear in mind that technology is constantly evolving. Automation is the next big revolution in payroll – look out for software like Employment Hero that offers these features.

Looking for more EOFY advice? We’ve got you covered

• How to get prepared for EOFY as a small business owner
• EOFY payroll and HR downloadable checklist
• The do’s and don’ts of tax time preparation in New Zealand

Simplify your EOFY with Employment Hero

Bringing in payroll software like Employment Hero can be a gamechanger for your business, especially at EOFY. When surveyed, Employment Hero users said that their business was 52% more efficient with our software, and they used 65% less paper. On average, they experienced a 338% return on investment after three years with Employment Hero.

Our all-in-one HR, payroll and benefits platform makes record-keeping, reporting and workforce management easy at EOFY. Learn more about how we can help you at tax time by speaking with one of our small business specialists today.