The end of the financial year is one of the busiest periods for many business owners. Having a year-end planning checklist, gathering all the appropriate documentation and getting your finances in order will put you in good stead for the new financial year.
Follow our EOFY checklist to ensure you (and your staff) are well prepared in advance.
Reconcile your payroll
Double-check that your pay transactions match what’s recorded on your payroll register. This is a crucial consideration at the end of the financial year because it ensures your tax return is accurate and helps determine if you’re over the threshold for payroll tax.
Close out superannuation payments
Late superannuation payments aren’t tax-deductible, which means if you overlook any employees such as contractors or you need to make corrections after year-end, you’ll most likely miss out on tax deductions. Make sure to review all super payments in early June so that everything is paid appropriately, and you can take advantage of deductions.
Review staff awards and salaries
Make sure all your employees’ salaries are in line with relevant awards and any other statutory requirements. Underpayments or incorrect payments could see you hit with penalties.
Tally up business expenses
Keep in mind that making extra purchases at the end of the year doesn’t always equate to a bigger tax return – it only reduces your taxable income by the total of your business expenses. However, if you’re planning to invest in equipment or resources anyway, doing so before tax time could be a good idea.
Figure out your business insurance
Check your current insurance policies (such as workers’ compensation insurance) and get your new policies in order ahead of the new year. If your business operations have changed at all over the past year, don’t forget that you may need to take out extra or different insurance policies to ensure you and your workers are appropriately covered.
Issue PAYG summaries
End-of-year pay as you go (PAYG) summaries need to be issued to staff members by 14 July. Just make sure your payroll totals are reconciled first before you provide payment summaries to help your employees lodge their tax returns.
Submit your BAS and ASIC report (if applicable)
Your quarterly BAS is due by the end of June. You’ll also need to submit your annual report to the Australian Securities and Investment Commission along with your solvency declaration if you’re set up as a company.
Review your government payments
If you received any national, state and territory government grants or payments, such as JobKeeper, visit the ATO website to find out whether they should be included in your tax return.
Review your finances
Now is a good time to review your finances with an accountant, bookkeeper or tax adviser. Look at whether you met your targets this year and if you need to make any changes next year to manage potential shortfalls, ensuring you can still pay employees and suppliers.
Evaluate the need for contract employees
Consider hiring contractors with relevant experience towards the end of the financial year to make sure you have your paperwork organised on time and are meeting all your tax obligations. The investment in extra staff will help ensure your business is as tax efficient as possible and could save you money in the long run.
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