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 three key modifications in New Zealand payroll calculations for the brand new monetary yr:
- The annual ACC earner levy price is growing from 1.39% to 1.46%Â
- The annual ACC earner levy threshold is growing to $136,544
- The scholar mortgage threshold is growing to $409 per week
Don’t fear, we’ve up to date Xero so the most recent modifications are mechanically utilized. Merely comply with these seven steps to finalise your payroll yr finish and revel in a easy begin to the brand new monetary yr.
Step 1: Publish the final pay run
Make sure that all of your pay runs for the monetary yr have been posted. In case you’re utilizing payday submitting by way of Xero, you’ll additionally want to ensure these have been filed. To verify these pay runs are reported within the 2021-22 monetary yr, the cost date might want to fall on or earlier than 31 March 2022.
Step 2: Evaluation and reconcile
Go to payroll settings to assessment all the data that impacts your payroll reporting. If something is inaccurate, you possibly can replace this earlier than processing your first pay run for the brand new monetary yr. You can too take this chance to test that any last worker funds and modifications have been put by way of.
We all know that reconciling your posted pay runs is an everyday process for you, however it’s all the time a fantastic thought to run your eyes down stories like pay historical past and depart transaction stories, to ensure there are not any surprises. Listed here are some ideas that will assist:
- If a number of expense accounts have been used for earnings and KiwiSaver, make certain the totals are added collectively and in contrast in opposition to the pay historical past report
- Test for any transactions incorrectly reconciled in opposition to your expense accounts. You possibly can test this by working the Account Transactions report
- In case your totals don’t look appropriate, this could possibly be attributable to some handbook journals. Test the quantities by working the journal report, after which click on handbook journals
- In case you’re having hassle finding the supply of a discrepancy, run your stories for a smaller date vary (like month-to-month) or by every pay interval
Step 3: Make any amendments
Any errors made all through the monetary yr (reminiscent of missed or incorrectly posted pay runs) could be corrected utilizing an unscheduled pay run.
Merely create the pay run for the required interval, and enter the adjustment quantities. These changes will likely be filed with Inland Income. You possibly can even enter unfavorable values, if wanted. In case you do enter unfavorable values, you’ll must be sure you log in to myIR to amend the submitting, as unfavorable values are usually not presently accepted by Inland Income by way of payday submitting.
As soon as any amendments are made, test the cost date of the unscheduled pay run falls throughout the appropriate monetary yr, so it’s reported appropriately.
Step 4: Situation annual earnings certificates
An earnings certificates is a abstract of an worker’s earnings, tax and deductions over the tax yr. Earnings certificates could be issued to staff on the finish of every tax yr, or on the finish of their employment.
The Accounting > Studies > Earnings Certificates display means that you can generate and publish earnings certificates, both in bulk or individually. To make clear, employers are usually not legally obligated to challenge earnings certificates to staff. It’s on the discretion of the employer.
Step 5: Evaluation and replace worker wage and tax particulars
Subsequent, replace the wage and wage particulars of any related staff. You’ll additionally must assessment staff’ ESCT charges earlier than the primary pay run of the brand new yr, to ensure they’re based mostly on what the worker truly earned the earlier tax yr. You are able to do this from the worker’s ‘Taxes’ web page in Xero.
Step 6: Evaluation and replace worker depart particulars
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 assessment and replace the sick depart entitlements of all staff with an upcoming sick depart anniversary.
For instance, an worker with a sick depart anniversary of 5 April who works Three days every week, 10 hours a day, would beforehand have an annual sick depart entitlement in Xero of 50 hours (5 days x 10 hours per day). They may want this entitlement up to date to 100 hours (10 days x 10 hours per day).Â
An worker with the identical sick depart anniversary who spreads their 30 hours throughout 5 days (6 hours per day) will want their entitlement up to date from 30 hours (5 days x 6 hours per day) to 60 hours (10 days x 6 hours per day).
Step 7: Sit again and loosen up
That’s it! There’s nothing else you might 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 after 1 April 2022 will fall throughout the subsequent monetary yr.
Within the meantime, try Xero Central for extra data on how you can put together payroll for the brand new monetary yr, or register for our payroll monetary yr finish webinar on 24 February 2022. Our pleasant help crew can also be obtainable for those who want a hand.