5 steps to a seamless payroll yr finish

It’s that point of yr once more. As summer season winds to an in depth, the times will begin getting shorter because the workload ramps up. For these working in payroll, that may solely imply one factor: yr finish is approaching.

There are 4 key modifications in New Zealand payroll calculations for the brand new monetary yr:

  • Grownup minimal wage will improve to $22.70 per hour from 1 April 2023
  • The annual ACC earner levy charge is rising from 1.46 % to 1.53 % 
  • The annual ACC earner levy threshold is rising to $139,384
  • The scholar mortgage threshold is rising to $439 per week

The heading reads 'student loans' with a comparative table below showing a description of payments and the student loan repayment threshold.

The above charges are mechanically utilized to any pay runs with a cost date on or after 1 April. Your staff may even see slight variations of their payslip.

The 1st step: Publish the final pay run

Be certain all of your pay runs for the monetary yr have been posted. When you’re utilizing payday submitting via Xero, you’ll additionally want to verify these have been filed. To verify these pay runs are reported within the 2022 – 23 monetary yr, the cost date might want to fall on or earlier than 31 March 2023.

Step two: Overview and reconcile

Go to payroll settings to overview all the data that impacts your payroll reporting. If something is inaccurate, you’ll be able to replace this earlier than processing your first pay run for the brand new monetary yr. It’s also possible to take this chance to test that any ultimate worker funds and modifications have been put via.

We all know that reconciling your posted pay runs is an everyday activity for you, but it surely’s all the time an amazing concept to run your eyes down studies like pay historical past and depart transaction studies to verify there aren’t any surprises. Listed here are some ideas that will assist:

  • If a number of expense accounts have been used for earnings and KiwiSaver, be certain the totals are added collectively and in contrast in opposition to the pay historical past report.
  • Examine for any transactions incorrectly reconciled in opposition to your expense accounts. You’ll be able to test this by operating the Account Transactions report.
  • In case your totals don’t look appropriate, this may very well be because of some handbook journals. Examine the quantities by operating the Journal report, after which click on handbook journals.
  • When you’re having bother finding the supply of a discrepancy, run your studies for a smaller date vary (like month-to-month) or by every pay interval.

Step three: Make any amendments

Any errors made all through the monetary yr (reminiscent of missed or incorrectly posted pay runs) might be corrected utilizing an unscheduled pay run.

Merely create the pay run for the required interval, and enter the adjustment quantities. These changes can be filed with Inland Income. You’ll be able to even enter damaging values, if wanted. When you do that, you’ll must ensure you log in to myIR to amend the submitting, as damaging values usually are not presently accepted by Inland Income via payday submitting.

As soon as any amendments are made, test the cost date of the unscheduled pay run falls inside the appropriate monetary yr, so it’s reported appropriately.

Step 4: Concern annual earnings certificates

An earnings certificates is a abstract of an worker’s earnings, tax and deductions over the tax yr. Earnings certificates might be issued to staff on the finish of every tax yr, or on the finish of their employment.

The Accounting > Stories > Earnings Certificates display lets you generate and publish earnings certificates, both in bulk or individually. To make clear, employers usually are not legally obligated to difficulty earnings certificates to staff; it’s on the discretion of the employer.

Step 5: Overview and replace worker particulars

  • With the elevated minimal wage, don’t overlook to test and replace the salary and wage details for any impacted staff.
  • Do not forget that from 24 July 2021, staff are entitled to 10 days of sick depart as at their subsequent anniversary. So that you’ll must overview and replace the sick leave entitlements of all employees with an upcoming sick depart anniversary.
  • Overview present depart entitlements and make any changes as needed – particularly if work patterns have changed just lately.
  • Do not forget that you want to overview and replace the ESCT rate for every worker once they begin working for you and initially of every tax yr. In case your worker’s wage or wages change in the course of the tax yr, don’t change the ESCT charge in the course of the yr. As a substitute, change it initially of the subsequent tax yr.

You’re executed! Sit again and loosen up

That’s it! There’s nothing else you want to do to finalise payroll yr finish. Your payroll accounts are actually in fine condition for the brand new monetary yr. Any pay runs with a cost date on or after 1 April 2023 will fall inside the subsequent monetary yr.

Within the meantime, take a look at Xero Central for extra info on how one can put together payroll for the brand new monetary yr, or register for our payroll monetary yr finish webinar on 2 March 2023. Our friendly support team can also be obtainable in the event you want a hand.