Getting your ducks in a row for the new financial year
I don’t know about anyone else, but the EOFY (end of financial year – I know, I didn’t know that either when I started in the business, so don’t feel silly) was a busy time at our practice. Students, stock take, reconciling accounts, and then of course I went and took a holiday right in the middle. If you are an employer like me, there are a few important things you need to ensure you do swiftly following the end of financial year. Here is a rundown of what you should take account of... now!
The first is about superannuation. If you have staff on your books, you will need to make Superannuation Guarantee payments (SG) on at least a quarterly basis. What do you have to ensure in this new financial year? From 1st July 2014, the new compulsory level of SG contributions has increased to 9.5%, so make sure you apply that to your first payroll this financial year. All superannuation payments from the last financial year will need to be paid by
Payment summaries are also something you will need to get onto pretty quickly. These need to be finalised in your accounting software and given to staff within 14 days from the 30 June 2014. When you give your payment summaries to your staff you need to make sure they include:
- How much they were paid for the year
- The amount of tax withheld from their payments
- The value of any fringe benefits that were provided to them
- The amount of any reportable superannuation contributions
Once you have done this, you will need to close the payroll for the end of financial year and start a new one for this financial year. Don’t forget to upload the new tax tables available from the Australian Taxation Office, and ensure that the first payment for the new financial year includes the new tax figures.
The Fair Work Act outlines standard wages for the allied health industry under the health professionals and support services award. As of July 1st, the minimum wages under this award increased, so make sure you check the rate your staff are on and ensure it meets these minimum standards. You can visit the Fair Work Act website for more details.
I mentioned fringe benefits. Do you know if you need to list any fringe benefits for your employees? Depends what you offer them as part of their employment. A fringe benefit is a non-cash benefit that you have provided to your employees as part of their employment with you. An example might be a gym membership or a work car that they can use for private purposes. The fringe benefit year ended on the 31st March 2014. You need to add any benefits on your employee’s payment summary for the financial year in which the benefits were received if the value is more than $2000 a year. You will need to keep records for 5 years of any fringe benefits that you might have provided to your employees, and these records should include:
- The taxable value of the benefit provided to each staff member
- Proof of the benefit through receipts, invoices, travel diary, log books, odometer readings or employee declarations
- You also need to show that 100% of the taxable value of the benefit was allocated to the employees
Have a think about the following scenarios which will help you work out if you need to record fringe benefits for your employees:
- Have you paid any employee’s expenses or reimbursed them over $2000?
- Do you provide entertainment or recreation to employees?
- Have you provided a house or apartment for accommodation?
- Do you provide a living away from home allowance for staff at satellite clinics?
If you are not sure, talk to your accountant about what to include. There is also fantastic information on the ATO website about Fringe Benefits. Click here to find out more.