Staying on top of your payroll obligations is critical as we move closer to the end of the financial year. Now is the perfect time to ensure your payroll processes are in order, avoiding common mistakes and considering the strategic benefits of outsourcing. This guide will take you through essential tips and deadlines, helping your business navigate the complexities of payroll management efficiently.
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The Top 4 Payroll Mistakes to Avoid Before EOFY
1. Inaccurate Record-Keeping:
In the digital age, accurate record-keeping is non-negotiable. By leveraging cutting-edge accounting software, you’ll be able to better maintain precise records of employee hours, wages and deductions. Consider working with a bookkeeper if you want to set up or refine these automated systems and processes.
2. Misclassifying Employees:
The misclassification of workers, such as labelling contractors as independent instead of employees, can lead to miscalculated superannuation and tax withholdings.
3. Ignoring Superannuation Guarantee Contributions:
Meeting super contribution deadlines is important if you want to avoid penalties. Contributions need to be accurate and in employees’ super accounts by the due date. If you are unsure of how to manage super guarantee contributions, our team at Carbon can help, ensuring you are full bottle – Understanding obligations, employee eligibility, record keeping, helpful automation, legislation and more.
4. Overlooking End-of-Year Adjustments:
Business owners commonly overlook end-of-financial-year (EOFY) adjustments due to inefficient record-keeping, inadequate training and manual processes. To simplify this process, adopting efficient accounting software automates tasks, ensures accurate records and minimises errors. Regular updates and systematic record-keeping contribute to year-round accuracy, while automated payroll processes, training initiatives and proactive engagement with accountants enhance financial awareness. Setting reminders, conducting internal audits and staying informed about regulatory changes prevent oversights. Consider outsourcing payroll services for professional handling, and leverage technology for compliance checks. These solutions collectively streamline EOFY tasks, improve financial accuracy and mitigate common pitfalls.
Mark Important Deadlines
Managing EOFY and payroll requires careful attention to key calendar dates to ensure compliance and avoid penalties. Some essential dates include:
- Superannuation Guarantee Contributions (SGC): Ensure employee super contributions are paid and in their super fund by the quarterly due dates (28th of each month following the end of the quarter) to avoid penalties. The money may take up to two weeks for fund transfers so don’t wait till the last minute.
- BAS (Business Activity Statement): Lodge BAS by the due date, which can vary depending on whether it’s monthly or quarterly. For monthly lodgements, it’s the 21st day of the following month, and for quarterly, it’s the 28th day after the end of the quarter.
- Annual Reconciliation: Complete annual reconciliation by 14 July.
- STP (Single Touch Payroll): Make STP submissions each payday or at the latest, on the day of payment.
- PAYG Withholding: Ensure PAYG withholding is reported and paid by the due date, which is the 21st day of the following month.
- Changes to Awards: Be aware of any changes to awards, such as rate increases, which typically occur from July 1st.
- Workers Compensation: You need to arrange a workers compensation policy as soon as you start to engage staff. Fines and penalties can apply if a valid policy is not in place when employing staff. Some states workers comp authorities are using ABN & Payroll returns from the ATO to data-match whether a valid policy is in place.If you have staff across different states then you may need a policy for each state where staff are engaged. Workers comp premiums are based on the payroll made to staff, be aware of the different legislation for each state as to what needs to be declared as “wages”.
By keeping track of these dates and proactively addressing each requirement, businesses can navigate EOFY and payroll responsibilities effectively, maintaining compliance and avoiding penalties.
The Strategic Advantage of Outsourcing Payroll
The strategic advantage of outsourcing payroll lies in enabling businesses to focus on their core functions, enhancing efficiency and growth. By entrusting payroll tasks to experts, businesses ensure compliance with evolving regulations, avoid costly errors and benefit from scalability and flexibility to adapt to changing needs. This approach provides peace of mind, reducing the stress associated with end-of-year financial responsibilities and allowing businesses to concentrate on strategic priorities.
Ready to Prepare for EOFY 2024?
As the financial year draws to a close, businesses can navigate the complexities of EOFY seamlessly by adhering to our comprehensive payroll guide. For those seeking even greater efficiency and compliance, consider exploring the benefits of Carbon’s payroll services. Stay ahead, stay compliant and pave the way for a successful financial year ahead.
For professional guidance that gets your business moving in the right direction, speak to our team of experts at Carbon. We do more than help you start, we help support your venture into the future.
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