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Do you have an EOFY Processing Summary for Sage WageEasy?

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Summary

This article is a quick processing guide for EOFY processing in Sage WageEasy.

Resolution

2020-21 END OF FINANCIAL YEAR PROCESSING SUMMARY:

 Step 1: 

NOTE: If you have a Weekly or Fortnightly Pay Period, PPE date of  June 2021, and your EFT payment date is before Thursday 01 July, you can skip this step. This step can also be skipped if you have monthly pays, with a PPE date of 30 June and a EFT payment date before 01 July.

Determine the final Pay Period End (PPE) for your Financial Year 

File > Company Details > Configuration > Period End > Taxation Year Boundaries
ATO requirements are that all salary and wage payments must be reported in the financial year they are received (i.e. paid to your employees).
The last Sunday of the 2020/2021 financial year falls on Sunday 27th June. So, if your company has a PPE on or before 27th June 2021 where the payment to staff will be received on or after 1 July 2021, this payment needs to be reported in the new financial year not the 2020/2021 financial year.

TIP:  If your PPE is 27/06/2021 and you transfer your employees' wages on Monday (28/06), Tuesday (29/06) or Wednesday (30/06) then you DON'T change your Taxation Year Boundaries.

If payment to employees is made in arrears: i.e. If your first PPE date in July is transferred to your employees' bank accounts with a payment date in July, DON'T change your Taxation Year Boundaries.

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For example (Please note the example is not likely to occur in the 2020-21 tax year):

a. if you have a pay period ending on Sunday 27 June 2021 with payment being made into your employees’ bank accounts in July 2021, i.e. on Thursday 01 July 2021, then 27 June 2021 Pay Period End would need to be included in next FY (2021-22) and excluded from this year (2020-21).

b. if you have the first July pay period ending on e.g. Sunday 4 July 2021 with payments made to employees’ bank accounts before 1 July 2021, i.e. on Friday 25 June 2021, the 1 July 2021 Pay Period End would have to be included in 2020-21 FY reporting.

If (and only if) one of the above applies to your business for this year, you will need to adjust your financial year Period End by changing the financial year End Date to;

a.  the day before your last PPE in June (26/06/2021), which will exclude PPE 27/06/2021 from this tax year, or;
b. the day after the first PPE in July (05/07/2021), which will include PPE 04/07/2021 in this tax year.

Go to File > Company Details > Configuration > Period End > Taxation Year Boundaries to make this change.

IMPORTANT – if you need to make this change to the PPE for taxation reporting you must do this BEFORE processing the pays for the appropriate pay period end. This will ensure that the income and tax values for this pay period end are flagged for inclusion in the correct financial year.

In summary, the steps you need to take are outlined below:

1. Will your wage and salary payments, for your last PPE in June (i.e. PPE 27/06/2021), be paid to your staff on or before 30 June.  If the answer is Yes, go to Point 5.  If the answer is  No, go to point Point 3.

2. Will your wage and salary payment, for the first PPE in July (i.e PPE 04/07/2021), be paid to your staff before 1 July 2021.  If the answer is Yes, go to Point 3.  If the answer is No, go to Point 5.

3. PRIOR to processing pays for the affected Pay Period End go to:
File > Company Details > Configuration > Period End > Taxation Year Boundaries:

If point 1’s answer (above) was No, change the End date to the day before the last PPE for June (i.e. 26/06/2021). 

If Point 2’s answer (above) was Yes change the End date to the day after the first PPE for July (i.e. 05/07/2021).

4. You must make this change PRIOR to processing the affected pay period, to ensure that the values are reported in the correct tax year.

5. Process your payroll as normal and check that year to date values reflect the correct allocation of wage and salary payments to the correct financial year.

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IMPORTANT NOTE WITH REGARDS TO SUPERANNUATION PAYMENTS AND REPORTING: Changing the Period End > Taxation Year Boundaries will only affect the reporting on Taxable Gross, Tax and ATO Reportable values on the employee ATO Payment Summaries and in the EMPDUPE file. 

If you have monthly pays as well as weekly/fortnighly pays in your database see link below for details.

When do I change my Taxation Year End Boundaries for the End of Financial Year?

 Step2:

Check your version of Sage WageEasy

Help > About Sage WageEasy Payroll

What is the latest version of Sage WageEasy?

You need to be using the latest Sage WageEasy release (released in June 2021) to ensure your end of year processing for 2021 is compliant with current ATO requirements.

 Step 3:

Backup your Sage WageEasy Company file

File > Back Up/Restore > Back Up

How do I backup Sage WageEasy?

Take a backup of your Sage WageEasy company files.

 Step 4:

Check your Company Details

File > Company Details > Change Company Details

Company Name, Trading Name, ABN and ACN. The details showing in these fields in Sage WageEasy must be consistent with the information shown in the Australian Business Register and/or ASIC Register. If this information is incorrect, please update your details using the Registration Wizard and fax the amended registration form to Sage WageEasy on (03) 9947 9250 or email the scanned form to [email protected] 

Your Company suburb MUST be in the CITY field and the STATE Field MUST be in CAPITALS or the ATO will reject your data.

 Step 5:

Check your Allowances and Deductions settings

Not all Allowances need to display separately in STP Reporting/ATO Payment Summary. Please consult with your Accountant or Association for a full listing of allowances required to show separately in STP Reporting/ATO Payment Summary. Some further information is available from the ATO.

https://www.ato.gov.au/business/payg-withholding/payments-you-need-to-withhold-from/payments-to-employees/allowances-and-reimbursements/withholding-for-allowances/ 

If you report Allowances Separately in STP and you would like to see these on the STP screen:

How do I see Allowances in STP?

 Step 6:

Check your Employee details

Reports > User Defined > Employee Address & Tax File Number

All employees must have full names (no nicknames), valid tax file numbers and addresses (ensuring that the suburb/town is in the CITY field and if inserted, that Australia is spelt correctly).

Run the user defined report Employee Address & Tax File Number and make any adjustments.

When you run this report, blank spaces in the Tax file number column is an indication that the tax file number is missing for the employee or the employee file is a duplicate in the database.

 Step 7:

Check your Employees' Reportable Super (RESC) settings:

RESC:

  • Employee superannuation deductions before tax (salary sacrifice).
  • Qualifying Additional Employer Contributions.

Since the 2009/2010 tax year, the ATO have required reportable employer superannuation contributions to be displayed on ATO Payment Summaries/STP.  

To identify those Employees who may have Salary Sacrificed to Super or had Additional Employer Contributions that are reportable as RESC run Reports > User defined > Super by Department with Gross Total Report.

After these Employees have been identified visit their employee records using Employee File > Payments > Superannuation then select the Salary Sacrifice or qualifying Employer Additional Contribution line and Edit. Ensure the box Include on ATO Payment Summary as RESC is ticked.

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To ensure previously processed payments are reported to the ATO as RESC, you may need to run a User Defined query called Fix RESC flag 2021 that retrospectively applies the setting back through the year.

EOY Resources

How do I see RESC in STP?

 Step 8:

Enter Reportable Fringe Benefit or Exempt FBT Amount

If an employee has a Reportable Fringe Benefit, the Grossed-up Taxable Value must appear in STP Reporting/ATO Payment Summary. These amounts are calculated from 1 April – 31 March. The Grossed-up Taxable Value is entered directly into the ATO Payment Summaries screen under the Employee File, Employee > Payments > ATO Summaries > Fringe Benefits.

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For Employers who are FBT Exempt:  How do I set up FBT Exemption?

How do I see FBT in STP?

 Step 9:

Print Reports and Reconcile your payroll

As per Step 1, with your PPE date at the last bold date in the June 2021 calendar, we recommend that you run the following reports for your end of financial year payments and reconcile these against your accounting system, or bank statements.

  1. Reports > Payment Summary > Year-to-Date > Financial Year-to-Date
  2. Reports > Employee > Allowances > Year-to-Date (Financial) > Employee All 
  3. Reports > Union Fees > Year-to-date
  4. Reports > ATO Payment Summaries > ATO Payment Summary Differences - if there are any differences, they should be justifiable, i.e. ATO payment summary values were manually changed on the employee’s Payments > ATO Payment Summary screen.
  5. Reports > ATO Payment Summaries > ATO Payment Summary Report - this report will display exactly what will appear on individual ATOPS/STP. This will confirm if any employee has any additions/deductions that need to appear seperately in STP/ATOPS. 
  6. Reports > Payment Summary > Financial Year Difference - will show any payments made between what you have chosen your Year End date to be and 30/06.  (In the case of Boundary changes as discussed in Step 1). 
  7. STP Update Report from STP > STP Update. 
  8. Reports > Leave > Leave Entitlement > By Type (for future use).  Print this report as close to 30 June as possible.

Note: It is advisable to check your period end date for the 2020-21 FY in each database by going to File > Company Details > Configuration > Period End > Look at the Start Date and End Date for 2020-21 FY. Those are the dates you should use when running any of the recommended reconciliation reports above for comparison against your accounting system or external records. If you are changing the Start and Finish date when running a particular report, please also remember to hit the “Refresh” icon when you have entered the new date parameters in the particular report screen.

 Step 10: (Optional) – STP creates an Income Statement in myGov which replaces ATOPS

Printing Individual ATO Payment Summaries (ATOPS)

Reports > ATO Payment Summaries > Print Individual Payment Summaries

Once all details have been balanced and verified, you will need to print the individual ATOPS.

For those employees who have provided a written request to have their ATOPS emailed, ensure that you have configured your company Email/Proxy settings from

File > Company Details > Configuration > Email/Proxy.

You will also need to ensure you have a valid email address entered for the employee, from Employee > General > Email/Internet and that it has been selected as the Pay slip/ATOPS Email Destination. This will also need to be checked from

Payments >ATO Summaries > Delivery Options.

 Step 11:

Sending the final STP reporting event for the year (This step replaces the EMPDUPE file creation)

When you have completed your pay processing for the year, including submitting all pay events and update events, you need to notify the ATO that you have provided all information, for all employees, for the year.

This is done by reporting a STP Update that has the Final Pay checkbox ticked for each employee included in the update event.

STP > STP Update > All Employees > OK > Mark All as Final > Report to ATO

How do I finalise my year and notify the ATO of final EOY values?

 Step 12:

Backing Up/Archiving your Data

File > Back Up/Restore > Back Up

The Team at Sage WageEasy cannot stress enough the importance of backing up your data. Save the back up to a secure location that can be removed from the premises and is clearly labeled as an historical or archived EOFY back up. We recommend taking at least two backups of your database.

How do I backup Sage WageEasy?

 Step 13 (Optional):

Housecleaning

CAUTION: If in doubt whether you should perform a house clean, skip this step.

File > Maintenance > Housecleaning

Housecleaning is only recommended under specific circumstances. House cleaning is a process that will remove information (pay slips and terminated employees) relating to the previous financial year(s) from your Sage WageEasy database. Please note that if you perform a house clean, your pay period ending dates, pay slips, terminated staff from June last and prior years will all be deleted. We only recommend housecleaning if you have a large staff turnover and the processing/performance of payroll tasks is affected. Even so, it is recommended to keep at least two year’s financial data in the copy of the database that will remain the live database (7 years is ideal however may not be practical for all customers). It is imperative that you archive reports and take archive backups of your data prior to housecleaning.

How do I perform a Houseclean and what is House Cleaning?


PREPARING FOR NEW FINANCIAL YEAR 2021-22 – CHECKLIST

 Step 1:

Updating Tax Tables prior to first pay in the new 2021-22 FY

Setup > Associations > Tax Tables

The Sage WageEasy FY 2021-22 Tax Tables and Upload Instructions will be released during the last week of June 2021.

Where are the latest Tax Tables and update instructions?

NOTE ON TERMINATION THRESHOLDS IN SAGE WAGEEASY

The Tax Tables provided by Sage WageEasy will include the threshold amounts for termination tax. If you have any termination payments to process for the 2020/2021 financial year it is important that you process these before updating the tax tables for 2021/22, otherwise you will be applying 2021/2022 termination tax thresholds to the termination.

 Step 2:

Check Withholding for 27 fortnights or 53 Weeks in the 2021-22 FY

Employee > Payments > Tax > Adjustment

Each new financial year it is important that you assess whether the year will be a 27 fortnight or 53 week pay year for your business and employees as this may mean your employees elect to have additional PAYG amounts deducted each pay. In summary, you will need to look at a calendar and count out how many pay periods will be processed in the 2021/2022 year including the excluded pay from the 2020/2021 year if that was necessary.

In some income years, payees who are paid:

• Fortnightly - will have 27 pay days for the year instead of the usual 26
• Weekly - will have 53 pay days for the year instead of the usual 52.

The withholding weekly and fortnightly tax tables published by the ATO are based on the normal number of pays in a year (26 fortnights or 52 weeks). Tax rates increase as taxable incomes increase. Therefore, an additional pay period in a financial year will mean that amounts withheld from salary and wage payments made to many payees will not cover the amount payable when they lodge their tax returns.

If the payees receive an additional pay during the year, payers are encouraged to:

• Inform your payees about this issue, and
• Put processes in place so they can request additional amounts be withheld i.e. using a tax adjustment in the employee file. Payments > Tax > Adjustment

For more detailed information and scenarios please consult the ATO website:

You will need to work out ahead of your first pay period in 2021/2022 if the above applies to your organisation based on your Sage WageEasy PPE dates and the actual EFT payment dates for the upcoming 2021/2022 financial year.

 Step 3:

Superannuation Obligations in 2021-22 FY

Setup > Awards > Edit Each Award > Payments > Superannuation > Quarterly Cap Amount (if applicable)

The superannuation guarantee percentage will change for the 2022 Financial Year to 10%, and the quarterly contribution cap has increased from $57,090 to $58,920. Superannuation contribution quarterly cap updates will need to be performed within individual awards.

 Step 4:

Modern Award Updates for 2021-22 FY

Setup > Associations

Sage WageEasy provides updates to the following Modern Awards free of charge:

• General Retail Industry Award 2020
• Hospitality Industry General Award 2020
• Registered and Licensed Clubs Award 2020
• Restaurant Industry Award 2020

The above Sage WageEasy FY 2021-22 Modern Award PDL files and Upload Instructions will be released during the first week of July 2021.

Note on other Modern Award Updates: If your business pays staff under another Modern Award apart from those listed above, you may have previously purchased the specific Award update from Sage.

The provision of these ‘other’ Awards is changing for the new financial year 2021/22.

If you wish to have one of our Professional Services Consultants work through with you on the updating of the Award you can book ahead of time for a 3-hour consulting session at $245 per hour including GST.

FOR FURTHER ASSISTANCE, select Pegg Image from the Sage WageEasy Standard Toolbar and ask Pegg your question.