The big race to provide your employees their PAYG Payment Summaries is about to begin.
Here are three ways you can simply your payroll process this month to ensure you provide the PAYG Payment Summaries to your employees by the 14 July deadline and the PAYG Payment Summary Statement to the tax office by 14 August.
Ensure Staff Details are all up to date.
Accountants and bookkeepers assist and prepare a number of PAYG Payment Summaries on clients accounting systems each year. One of the bug bears is that employee’s details have not all be entered into the payroll system. Ensure you have the following for your employees entered into your system:
- tax file number
- full name
- start date or termination date of employee
- date of birth
- current address
- payroll details such as their gross wage, allowances, hourly rate, employment
In addition, check that all employee payments have been processed for the full financial year. Also, add the details of any reportable fringe benefits that have been paid to employees as you will need to enter these manually into the payroll system. This will ensure that you can easily proceed with processing and generating the PAYG Payment Summaries directly from your accounting system. The use of electronic PAYG Payment Summaries and Summary Statement required to be sent to the tax office is the easiest and most accurate way to handle your payroll process.
Hint: Ensure you check all details of the employees’ wages including any reportable Employee Superannuation Contributions. Be sure they are included and correct on the PAYG Payment Summaries before you supply them to the employee by reconciling to a generated payroll summary report from your accounting system.
Reconcile your payroll to your Business Activity Statement (BAS) for the full year to ensure what you have submitted to the tax office agrees to the details of wages paid for the year in your accounting system.
It is important that your wages paid and wages tax paid for all staff during the year actually agree to what has been reported to the Tax Office on your Business Activity or Installment Activity Statements during the year. This is a useful reconciling process habit to get into. You are required by the tax rules to supply details of all PAYG Payment Summaries issued to employees to the tax office—accounting systems allow you to generate an electronic file containing this information directly to the tax office. The tax office does and will reconcile and match the numbers recorded as wages and wages tax paid in your Business Activity or Installment Activity Statements to the PAYG Payment Summary information you have supplied to your employees.
Back up your payroll if you are not in the “Cloud”.
Once you do the payroll rollover for the new financial year you will not be able to access the payroll system for the previous year in the current file—you will need to use your back up copy. Cloud based accounting software (online software) will automatically backup the payroll as it sits on a server separate to your internal server. If you are not using cloud software, back up your payroll for the financial year as you will need to roll over the system in your accounting software to prepare your payroll for the new financial year commencing on 1 July.
Be aware of Tax Changes that affect every employer and employee.
Personal tax rates change. Each year from 1 July you need to ensure your accounting system’s payroll updates have been activated, which will automatically update to current tax rates. Accounting system providers will provide you with these tax change tax tables which must be loaded into your accounting software before you start processing payroll for the new financial year commencing 1 July.