It’s almost that time of the year: 31 March 2023 is the end of financial year (EOFY) for most businesses and organisations in New Zealand. For payroll managers everywhere, this is one of the busiest times of the year when it comes to managing a company’s payroll. There are lots to remember and tick off your checklist to ensure everything runs smoothly and efficiently – but don’t worry! We have outlined an EOFY2023 checklist for all payroll managers, so you can ensure you have everything taken care of in due time.
If you are using an all-in-one HR and payroll software like Ready Workforce (by Zambion), most of these things are updated automatically but it’s good to still check these against what you need to prepare for EOFY.
Our software automates many of the necessary tasks for EOFY, such as tax calculations and reporting. However, it is still important to check that everything is in order and matches your specific EOFY requirements. Taking the time to review your financial data can help ensure accuracy and give you peace of mind when it comes time to file your taxes. So, while automation can certainly ease the burden of EOFY, it’s always wise to double-check your work using this checklist:
- Monitor legislative changes that will take effect on 1 April. It is crucial to know what’s changing to ensure compliance. If you’re using a cloud-based payroll system, some changes will be automatically applied, but it’s essential to be aware of what you need to apply manually. Fortunately, the Ministry of Business, Innovation and Employment (MBIE) has a list of employment legislation changes, making it easier to stay up-to-date. Make sure you take advantage of this resource to ensure your business is always on the right side of the law.
- It is important to regularly check and update your employee contracts to ensure they are compliant with current legislation. Legislative changes such as increase in minimum wage, sick leave entitlements, etc may require amendments to existing agreements or the template for future ones. It’s also crucial to include enough detail in employment agreements about how leave entitlements will be calculated for employees with no set work pattern. By including a clause that describes how the portion of leave entitlement taken will be determined, you can avoid any confusion or disputes later on. So take the time to review your contracts and make any necessary updates – it’s an investment in the smooth running of your business.
- Review your employees’ pay rates and ensure they are up to date, especially if there have been any changes in minimum wage requirements. If 1 April falls in the middle of a pay period, it’s essential to pay your staff accordingly, so they aren’t left short-changed. Alternatively, if you apply the pay rate increase from the beginning of the pay period that contains 1 April, it can make things simpler for both you and your employees. Don’t forget that paying your staff the correct rates not only benefits them but also ensures your compliance with legal regulations. Take the time to review your pay rates now, so you can avoid any potential issues down the line.
- Ensure that your staff members are receiving the correct payments. With occasional tweaks to ACC and Student Loan thresholds, it is crucial to update any automatic payments that you have in place. By doing so, you can ensure that your employees continue to receive the correct amount of pay and avoid any potential issues. Take the time to double-check your payment settings and make any necessary adjustments. This simple step can go a long way in ensuring a happy and satisfied workforce.
- Review any changes that may have occurred in your employees’ roster and work patterns. With workdays and hours potentially shifting, it’s essential to keep your payroll platform updated with the correct employee settings to ensure that all entitled leave and public holiday entitlements are calculated accurately. Failing to do so could result in a headache for both employer and employee. So take the time to review any changes and make sure everything is in order as you move forward into a new year of business.
- As the tax year comes to an end, it is important for employers to know the Employer superannuation contribution tax (ESCT) rate for each employee in order to avoid any confusion. Accounting for employer superannuation contribution tax can be tricky as it greatly relies on an employee’s income. Waiting until the end of the year to review an employee’s ESCT rate can prevent any discrepancies from arising.
- Generate relevant payroll reports to ensure compliance with the Inland Revenue Department (IRD) regulations. These reports provide data on employee earnings and deductions, PAYE and KiwiSaver contributions, taxes withheld, and other relevant details. Reporting to IRD accurately and on time is crucial, and these reports can help you achieve that. With advanced payroll software, generating these reports has become a breeze. All it takes is a few clicks, and your reports are ready. By staying on top of your payroll reporting, you not only avoid penalties but also establish trust and credibility with your employees and the IRD.
- Review any deductions that you may be making from an employee’s pay. An employee should always receive clear and concise information regarding their deductions, so they can budget accordingly. It’s important to review these deductions regularly, as laws and regulations change over time.