Payroll Software and People Management blog

End of Year (EOY) is nearly upon us. There are a number of steps you can carry out ahead of time to ensure that you are well prepared for this busy period.

1. Employment Termination Payments (ETPs).

First and foremost, be sure to understand the ATO legislation (NAT 70980) around ETPs and how to manage them in your software. Key points to keep in mind:

• ETP pay components are no longer recorded on a single ETP payment summary.

• When multiple components are paid on termination, an employee could now receive two separate ETP payment summaries.

• If any ETPs have been completed in Meridian and a payment summary has not been printed, upgrade to ETP release (available soon) and process an ETP Adjustment.

• If a manual payment summary has been completed using ATO stationery, these employees will need to have their ETP payment summary flagged as Suppress in the Employee, Termination Details screen.

• If you pay an employee an ETP, you may need to take into account the new additional ‘Whole of Income’ Cap.

2. Check that your company details and payroll details are up to date.

This is a step you can take easily ahead of time. Company Details and Payroll Company Details contain information that is included in the EMPDUPE file and on the Payment Summary, so it is essential to ensure that the contents of both are correct before you start EOY processing.

3. Run a Tax Details Report to verify tax details for employees.

If you have entered new employees into the system during this financial year, or have current employees who have varied their tax details, it is recommended that you verify their Tax Details using their TFN Declaration or Withholding Declaration to confirm that the details are correct.

4. Ensure correct set up of additions and deductions within your software.

Check Additions and Deductions maintenance to ensure assessable allowances (e.g. car allowance) and claimable deductions (e.g. union fees) are printed correctly on the payment summary. Relevant information can be found on the ATO website.

5. Check reportable super maintenance in your software to ensure that reportable super values print correctly on the payment summary.

It is important to verify that superannuation deductions made before tax and employer contributions which are reportable to the ATO are included in Payment Summaries. The components that need to be verified are:

• Superannuation Payments made before tax in Additions and Deductions.

• Employer Superannuation Contributions need to be checked to see if they are reportable to the ATO.

Further information can be found in the ATO Reportable Employer Superannuation Contribution Guide online.

6. Enter reportable fringe benefits and exempt foreign income amounts into your software.

Do you have any reportable fringe benefits for employees or working directors/proprietors?

If an employee has a fringe benefits amount with a taxable value in excess of $2000, the grossed up taxable value must appear on their payment summary.

In Meridian, the grossed up taxable value is entered into the Tax Details screen of Employee Records.

7. Run the EOY Validation Report.

Before producing Payment Summaries, the EOY Validation should be run to confirm employee data such as addresses and transaction values. This is especially important if any changes have been made to Company, Payroll Company or Employee information.

8. Balance the YTD Reports.

Ensure that YTD values on the Payroll and Costing Reports balance prior to balancing the Reconciliation Report. The Reconciliation Report should always balance to your Payroll Report. While reconciling figures, also verify earnings information from your company point of view. What has been entered into your software needs to be verified according to your company’s internal accounting procedures.

9. Prepare how you will transfer your files to the ATO.

• If you will be submitting the EMPDUPE file to the ATO electronically by using Electronic Commerce Interface (ECI) software, make sure that you have everything ready by checking the requirements on the ATO ECI website.

• If you plan to send the data to the ATO using an electronic storage media, ensure you have appropriate removable device e.g. USB/Flash drive, DAT, Zip disk, CD, DVD. Visit the ATO website for further details.

We recommend using the ECI method as it enables the file to be immediately verified and errors to be quickly identified and rectified.

EOY is a very busy and important time of year for any payroll professional. To ensure you remain ahead of the game, be sure to attend a Sage MicrOpay EOY Training session. EOY Training dates are now available on our website.

Australia’s taxation system, due to the numerous legislative requirements that accompany it, is one of the most complex in the world. To ensure compliance, all businesses must keep abreast of the latest adjustments to laws that affect payroll and taxation.

Fortunately, help is at hand. There are many, freely available sources of information that can assist your payroll and HR staff in staying well informed and prepared when changes do occur.  

Choose a payroll software provider that supplies software updates when legislative changes occur.

Ideally, your payroll software solution provider should make the task of staying legislatively compliant much easier by providing regular, timely software updates when changes are made to laws that impact the payroll process. This is particularly important prior to the start of the new financial year when new regulations such as changes to tax rates, introduction or cessation of levies and adjustments to Modern Awards generally come into effect.

Software updates should be accompanied by release notes which provide an overview of the changes included in the update. These overviews are invaluable as they usually summarise not only the changes to your software but also the legislative changes addressed by the software update. Release notes are an excellent resource that payroll professionals can utilise to stay informed of changes.

Attend payroll seminars covering the latest payroll legislation.

Payroll seminars and industry conferences offer a great opportunity for payroll professionals to enhance their knowledge. Seminars may be focused on a specific area such as payroll procedure, legislative changes, or a combination of several topics. Regardless, these seminars are dedicated to educating payroll personnel on the latest regulatory changes, future directions, industry trends and other issues that have an impact on payroll processing.  Sessions are presented by experts in their field, giving your payroll staff the chance to gain valuable insight.

Attending seminars focused specifically on payroll legislation, particularly new or changed legislation, is an excellent way for your payroll staff to gain an understanding of the latest regulatory changes.

These seminars are presented by a number of organisations, including Sage MicrOpay. Not only do they provide your payroll personnel with the opportunity for development, they also allow your staff to meet, build relationships and exchange ideas with other professionals in the payroll industry.

Visit the Australian Taxation Office website.

The Australian Taxation Office (ATO) provides a wealth of easily accessible reference information that can help you stay informed about current taxation legislation. All of this information is freely available from the ATO website, www.ato.gov.au. From here, you can access many different, regularly updated resources, such as:

• The ATO legal database, which contains legal and policy information.

• Information about what to do if you make a mistake.

• Tax calculators and other tools; and

• Downloadable versions of ATO guides and forms.

Additionally, the ATO website features a great deal of useful information on topics of interest to payroll professionals, such as:

• Record keeping requirements

• Superannuation obligations for employers

• Fringe benefits tax

and much, much more.

The ATO issue regular updates plus provide the option to subscribe to these updates either by email or RSS feed, ensuring you have the most recent information. The ATO also offers a range of free learning resources, including webinars, seminars and workshops.  

Join a payroll association.

Typically, one of the most important ways that a professional association supports its members is by making sure they are well informed. Membership of a payroll association allows payroll professionals access to a wide range of payroll-focused resources, for example, email newsletters or articles. To join, associations generally charge an annual fee but members then have full access to a wide range of useful material. Information about current legislation and compliance issues, as well as access to tools including calculators, checklists, best practice guides and whitepapers are just some of the benefits that can be conferred by membership.

Payroll associations regularly host educational conferences and industry events as well as offer training courses. The topics covered at conferences or in training are researched and targeted to the needs of payroll professionals in order to assist them in staying up to date with payroll legislation, process and technology. They also provide an excellent opportunity to learn from respected experts in the payroll industry and gain valuable insight on the latest reforms.

Visit your state revenue office website.

For information about payroll tax, a visit to your state revenue office’s website is a worthwhile exercise. In addition to useful resources like payroll tax calculators and current threshold figures, you can also access details of current payroll tax legislation and amendments. Similar to the ATO, most state revenue bodies offer free education resources, such as online learning, webinars and seminars.

Find out how Sage MicrOpay can help you stay up to date with payroll legislation.

For further information on Sage MicrOpay’s software solutions and services, including our payroll legislation seminar series, please visit our website or contact us on:

1300 729 229
enquiries@micropay.com.au
www.sagemicropay.com.au

Recently, the Fair Work Amendment Bill 2012 was officially passed by the Australian Senate and now awaits royal assent when it will formally be made a law. The Bill includes a number of amendments to the Fair Work Act 2009, many of them technical, recommended by the independent Fair Work Act Review along with numerous other stakeholders.

Many of these changes may have implications to the way your business operates. They include –

Fair Work Commission
Fair Work Australia will now be renamed to the Fair Work Commission and two new additional Vice President positions will be created.

Unfair Dismissal
Time limits for lodging certain claims will be altered to a uniform timeframe of 21 days. This includes the extension of the timeframe for unfair dismissal claims up from 14 days and the reduction in the timeframe for general protection claims down from 60 days.

The Fair Work Commission will be provided with increased powers to not only dismiss applications in certain circumstances, but to also award costs against parties where an unreasonable act or omission during an unfair dismissal matter has incurred costs to another.

Default Superannuation Arrangements
Outlined by the Productivity Commission’s inquiry, a new process will be implemented for the Fair Work Commission to assess applications from funds that wish to have generic MySuper products included as default funds in modern awards.

Enterprise Agreements
The Fair Work Act Amendment Bill will result in opt-out clauses in enterprise agreements no longer being permitted. It will also prohibit statutory enterprise agreements with a single employee.

There are also a number of other technical and clarifying recommendations made by the Fair Work Act Review affecting a range of procedures including scope order applications, modern award variation applications and protected action ballots that will be implemented in the Bill.

More information on the changes included in the Fair Work Act Amendment Bill can be found here.