19 Mar CHECKLIST: End of Financial Year Payroll
When it comes to payroll, despite what many people think, the end of the financial year doesn’t need to be a daunting time.
Payroll just rolls over month to month, but every year there are a few legislation changes that kick in from 1 April. Most updates should be taken care of by your payroll software provider but in some cases you may also need to make a few changes in your account.
The start of a new financial year is also a great opportunity to review the settings in your payroll system to ensure everything is up-to-date.
This End of Financial Year Payroll Checklist should help you identify any actions you may need to take to ensure you continue to get your payroll right.
- Make sure you know what’s changing – It’s important to be aware of all legislative changes that take effect from 1 April. You also need to know which changes will be applied automatically in your payroll software (if you’re using a cloud-based system) and which changes you need to apply yourself. Here’s our summary of the 1 April 2019 Payroll changes.
- Review salary and wage info – Before your first pay of the new financial year, review and make any necessary updates to pay rates for your employees. The most common change is an increase in the minimum wage. If 1 April falls in the middle of a pay period you’ll need to pay some of the employee’s time for the period at one rate, and the rest of their time at the other rate.
- Update any automatic payments – If you’ve got automatic payments set up to pay your staff make sure you update these as there are often tweaks to ACC and Student Loan thresholds that can result in small changes to an employee’s take home pay.
- Check employee contracts – Occasionally there may be legislative changes that require amendments to existing employment agreements or the template you use for future employment agreements. For example changes to rest and meal breaks or trial periods.
- Review changes to employee work patterns – The start of a new financial year is a great time to review any recent changes to employees’ work days or hours. Ensure your payroll system is up to date with the correct employee settings so it can calculate the right entitlements for leave and public holidays.
- Claim annual leave paid out – New Zealand tax legislation allows employers to claim any Annual Leave paid out within 63 days of the end of the financial year as a deduction in that year. Have a chat to your accountant or bookkeeper about this. Total Holiday Pay Due plus Total Annual Leave Due equals the balance of outstanding leave due, as at the end of the financial year. You should be able to access this info via the reporting provided by your payroll system.
What you won’t need to do as a PayHero or FlexiTime customer:
- Download or update your software to account for the tax changes – Updates are applied automatically behind the scenes.
- Set up new pay calendars/pay frequencies – everything will roll over from the previous year!
- File anything with IRD – This is all taken care of via our automated payday filing.
- Print payroll reports – Save the trees! With our cloud based payroll systems, all your data is always available online.
- Provide Certificates of Earnings – It’s useful for employees to have a record of their earnings, tax payments and deductions for the past financial year, but the old Certificate of Earnings is no longer required. Just invite your employees to use the employee portal for ongoing access to that information or direct them to myIR.
The end of the financial year can be a stressful time, but by following these steps you’ll be able to ensure that your payroll responsibilities are under control. If you ever need further explanation or clarification, feel free to contact our support team here at FlexiTime. We’re always happy to help!
Get started today
FlexiTime PayHero is flexible payroll software for New Zealand businesses. With online timesheets, FlexiTime PayHero makes it easy to track the hours your employees work and pay them accurately.