As the financial year comes to a close, it is crucial to make sure a smooth and accurate transition into the new fiscal period. In this guide, we will address some of the most frequently encountered issues during the EOFY process and provide practical solutions to help you navigate through them. By following these recommendations, you can streamline your EOFY procedures and minimise any potential discrepancies, providing a seamless transition and accurate financial reporting.
Entering RFBT for previously terminated employees
If an employee has previously been terminated and finalised in a pay event throughout the financial year, they will not appear in the finalisation events.
If you need to add Reportable Fringe Benefits via STP for an employee who is not in your finalisation event, you will need to complete it in either an update event and add the amounts, OR an amended finalisation event.
You can find more information here.
My ATO figures are reflected incorrectly. What do I do?
The difference between the Total Reportable Gross from the EH STP reports and the Gross Payments amounts downloaded from the ATO platform in EH is due to the Salary Sacrifice amounts deducted from your employee's wages.
As part of the STP2 reporting requirements, submitted STP pay events must include the total, pre-sacrificed gross payments made to employees and separately report the Salary Sacrifice/Pre-tax deduction amounts. The ATO then uses these figures to calculate the "employer (payer) totals" which are then populated into your ATO platform and used for W1/W2 prefilling of your activity statements. So the calculations for these two "Gross" amounts are slightly different.
Employees showing as Not tax ready?
Each financial year should end with a Finalisation or Amended Finalisation Event, as that is what creates the Tax Ready Status with the ATO.
- Ensure a finalisation event (or amended finalisation) is the last event of the financial year.
- Check the timing: the finalisation creation date/time must be after later event lodgement.
- If there is any kind of pay event or update event after the initial finalisation, you will now need to create and lodge an amended finalisation event to complete your EOFY requirements.
- After a successful lodgement, allow up to 72 hours for ATO processing and your file to update.
Multiple Earnings lines for terminated employees in a finalisation event
This can occur when the historical data for the employee had to be updated after they were terminated. The following processes will need to be followed for the report to show correctly.
Firstly, you will need to reactivate the employees. You can do this in the Employee Profile in Payroll by scrolling to the bottom of the details page and clicking Re-Activate Employee:
After you have done this, you will need to conduct an earnings reset event for the employee.
To do this, go to Reports> STP Reports and click the drop-down arrow next to create update event. From here, an option to create an earnings reset event will show:
When you do this, we will only want to do this for the affected employee. In the Employees section, you can search for the employee's name, then select the employee:
Lodge the Reset Event. From here, re-terminate the employee via their Employee File. After you have done this, create an update event.
You can then refresh the data for the Finalisation event, and this will show an earnings line similar to the one below: