Make sure employee details are up to date. In particular, check the the employee's tax file number, email, and postal address. Having an email address on record for an employee will allow you to send a notification email directly from the platform to your employees after you have lodged the finalisation event to notify them that their Income Statement is tax ready.

Check that the employee's address is complete and correct, as unless fixed, this will trigger a validation and prevent you from lodging the finalisation event. If your business contains a combination of closely-held employees, and non closely-held employees, i.e., arm's length employees. make note of those employees whom you classify as closely held as you will need to complete a separate finalisation event for those being reported quarterly. Also, keep note if you have any foreign employees, as you will need to report the Foreign Tax Paid via the finalisation event.

A quick way to audit this information is to generate an Employee Details Report and select the following display columns to retrieve the information:

• Postal address.
• Email.
• Tax file number.
• Single-touch payroll.

Make sure you also include employees terminated in this financial year when generating the report, as you may also include them in the finalisation event.

Is your business exempt from Fringe Benefit Tax (FBT) under section 57A of the FBTAA 1986? If so, make sure you have configured this via the ATO Settings page. By default, we select the No option, but it is important to review the setup. It will help make sure you report correctly any reportable fringe benefits amounts in the finalisation event and the employee's Income Statement.

For businesses with multiple employing entities set up, please note that you must configure the FBT settings for each employing entity. We can do this via clicking through to the relevant employing entity via the Employing Entities submenu within Payroll Settings on your Employment Hero Payroll platform.

If a business is exempt from FBT under section 57A of the Act, the employee's whole RFBT amount is reported as tax-free. If the business is not exempt from FBT under section 57A of the Act, the employee's whole RFBT amount is reported as taxable.

Before 16th July 2021 there were an additional two sub-settings which separated out the type of organisation and the entitlement of employees to a separate cap for salary-packaged entertainment benefits. We have removed these options as they do not impact the reporting of RFB amounts for employees via STP or payment summaries and are redundant. As a result, the following will also occur:

• Any existing lodged STP events that did not have RFB amounts reported will only have one RFB column called RFBA displayed in the event.
• If any existing lodged STP events have RFB amounts reported in the RFBA–Entertainment or RFBA–Other column, the applicable RFB column will remain in the event as will the amounts previously reported. Previously entered RFB amounts are maintained despite this change.
•  As per new STP events created, there will only be one column for RFBA.

Review your pay categories and make sure you applied the correct classification. As part of STP Phase 2, the ATO has new regulations around the disaggregation of gross income, so it is important to make sure that your pay categories are classified appropriately as per ATO requirements. The following article has more information on the disaggregation of gross income, along with descriptions of each payment classification.

PAYG Exempt pay categories:

You normally categorise a pay category set to be PAYG exempt as something other than Default in the Payment Classification field in the pay category settings, for example, Allowance or Lump Sum as two possibilities. You would do this because it is considered PAYG-Exemptearnings tax-free for a particular reason.

If you select the Default option in the Payment Classification field for PAYG Exempt earnings, then your STP finalisation reconciliation will show a variance equal to the amount paid using this pay category. The reason for this is because earnings will not appear in the Taxable Earnings total in the payroll Year to Date (YTD) section. However, they will appear in the Payroll Gross Earnings total in the STP YTD section. Information about how to fix this is in our EOFY Reconciliation article.

Special note on JobKeeper and JobMaker:

Provided you have set up JobKeeper and JobMaker payments correctly, they will report and appear correctly, respectively. The correct STP classifications are applied if you are using the system-generated JobKeeper/JobMaker pay categories already and no further audit will be required.       

For any Union or Professional Association Fees or Workplace Giving deductions, be sure to audit the Classification field so the itemised deduction amounts appear separately in the Income Statement. As part of STP Phase 2, they have introduced several new classifications to categorise the deduction types, so it is important to make sure your deduction categories are correct. There have also been two Salary Sacrifice classifications introduced as part of STP Phase 2:

• Salary sacrifice (superannuation):
  • It refers to an effective salary sacrifice arrangement:
    • Entered before they performed the work.
    • Where you paid contributions to a complying superannuation fund.
    • Whereby the sacrificed salary is permanently foregone.
• Salary sacrifice (other employee benefits):
  • It refers to an effective salary sacrifice arrangement:
    • Entered before they performed the work.
    • For benefits other than for superannuation.
    • Where the sacrificed salary is permanently foregone.
  • Examples include:
    • Novated lease.
    • Gym membership.
    • Workplace giving donations.
    • Car.
    • Property (goods, land, buildings, shares and bonds).
    • Expense payments (loans, school fees, childcare costs and home phone costs) and.
    • Work-related items, such as portable electronic devices and equipment.

If they have made salary sacrifice arrangements where you pay the contributions to a super fund, we strongly recommend using the platform default deduction category for Salary Sacrifice Super. Alternatively, if the salary sacrifice arrangements are for benefits aside from superannuation, please make sure to use the Salary sacrifice (other employee benefits) classification.

If you have migrated to this payroll platform from another platform during the financial year, it is important you have correctly set up the opening balances. If you created your business in the previous financial year but did not start processing pay runs until this financial year, it may be necessary to review the Initial Financial Year setting. You will find this in the Opening Balances page in the Payroll Settings module where you can make sure the configuration of the correct financial year.

If there are any opening balances for deductions that should be reported as Reportable Employer Super Contributions (RESC) on the Income Statement, be sure to select the Include on payment summary as RESC tick box alongside the deduction category in the employee's Opening Balances screen. If you are using the platform Salary Sacrifice Super deduction category, we will select the tick box by default 

We suggest you audit all RESC amounts processed in pay runs to make sure you have correctly assigned them as paid to a super fund. The ramifications of any other allocation, i.e., other than to the super fund will cause employee amounts not being reported correctly on their Income Statement and the employee being stuck with a tax liability. To audit RESC amounts, follow these steps:

• Generate a Deductions Report using the date range Financial Year and filter the report by selecting the relevant RESC deduction category.
• Generate a Super Contributions Report using the date range Financial Year and filter the Contribution Type to Salary Sacrifice. 
• Compare the total $ amounts between both reports. Do they match? If yes, then all is well. If the amounts do not match, review each employee to identify where the difference lies.
• Once identifying the differences, you will need to fix them. 
• Once making any corrections, generate the Super Contributions Report again and make sure the total amount matches the Deductions Report.

On 4th November 2020, we changed the RESC deduction category to help users avoid incorrectly allocating RESC deductions to anything other than a super fund. The following article provides detailed information about these changes. If, however, you made payments before these changes or you made deductions using a custom category, you will need to unlock the pay run and change the category used. If you cannot unlock or edit the pay run, please contact Support by submitting a request.

Make sure that you finalise all pay runs with a date paid by 30th June, including any adjustment pay runs you have to create. If you lodge your finalisation event and then have to process adjustment pays, you will be required to lodge an amended finalisation event, so we strongly suggest you hold off on launching the finalisation process until you are 100% confident you have processed all pays for the financial year.

Once you have completed the steps above, you will be ready to create the end-of financial year finalisation event. There are two ways to create a finalisation event. They are:

• Using the STP EOFY Wizard; or
• Via an update event.

Either option can fulfil your end-of-year processing obligations. However, we have specifically built the STP EOFY Wizard to simplify the process. The STP EOFY Wizard provides more functionality over an update event, including:

• Send notification emails from the platform once the finalisation event is successfully lodged:
• The option for processing an event encompassing all pay schedules, as opposed to creating an event for each pay schedule. It restricted this functionality to businesses with less than 2000 active employees; and>
• Access the amended finalisation event wizard if further finalisation events are required.

You need to make a finalisation declaration by 14th July, however; it is important that you finalise your employees' data by 14th July if you can, and let your employees know when you have by sending notifications, so they can lodge their income tax returns.

Finalising Closely Held Employees

From 1st July 2021, businesses were required to report closely held employees (payees) via STP. It will include closely held payees reported quarterly in a separate finalisation event at the end of the financial year. For more information, see here. Closely held employees reported on a per pay run basis are automatically included in the standard finalisation event with arm's length employees.

The tax tables for the new financial year are automatically loaded. Please note that any pay runs with a date paid of 1/7/2024 or later will apply the FY2024/2025 tax tables automatically. 

The Superannuation Guarantee Contribution (SG) percentage will increase to 11.5%, effective for all pay runs with a date paid on or after 1st July 2024. The platform will automatically apply the increase across all businesses, except in the following circumstances

• A business that does not have the Automatically Update Super Rates tick box selected.
• The Override tick box selected in the Super Rate column in an employee's Pay Rates screen.
• The Override tick box selected in the Super Rate column of any pay rate template.

If any of the above scenarios apply to a business and/or employee record and you want the 11.5% SG rate to calculate on OTE, you must change your settings accordingly so that you have the Automatically Update Super Rate tick box selected and/or the Override tick bx in any employee's Pay Rates screen or pay rate template unselected. For more information, review: Annual increase to superannuation guarantee (SG) rate effective from 1st July.

The maximum quarterly contribution base will increase to $65,070. The increase will automatically apply to all employees who are currently on the default contributions base, from 1st July 2024. It will not update employees that are not on the default setting, so you will need to do this manually.

If you want super contributions to be included in the 2023/24 financial year for tax reasons, the contributions need to reach the super funds by 30th June 2024. To meet this deadline and if you are using our automated super payments functionality, i.e. Beam, your super batch will need to be successfully uploaded/paid by 3.30pm AEST on 23rd June 2024. 

If you have pay runs scheduled for payment between 23rd and 30th June, you can always create these pay runs in advance by the 23rd June, using the usual period end and paid dates, finalise the pay run and then create your super batch for the period up to 30th June 2024.

It will allow you to include the super amounts before the deadline without the need of paying employees in advance. i.e., you will not need to upload the ABA file to the bank until the actual scheduled paid date of the pay run. If you are using another clearing house to process super payments, make sure you liaise directly with the clearing house to confirm their deadlines.

For customers using our pre-built modern awards, it will publish updated versions of these award packages by the effective increase date. 

The ATO-approved vehicle allowance rates for 2023-24 will remain at 75c per kilometre. Please refer to the ATO website for further information, however, this may be subject to change. If your business has set its own vehicle allowance rates, you will need to make sure you are not paying less than the ATO-approved rate.