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July
July
Hi.
Which pay rate to use for my employees who work in fortnightly pay cycle (24 June – 7 July)?
My South Australian business operates a fortnightly pay cycle and all pays have been completed and processed for 2019 FY. The current pay cycle spans both financial years -24 June - 7 July (current payroll will be processed on 8th July). New pay rates apply from 1 July and Fair Work Ombudsman website states "You’ll need to apply the wage increase for your employees from the first full pay period starting on or after 1 July”.
I understand I need to install the compliance update and load new payroll tax tables before processing pay on 8 July. Am I correct that employees are paid at 2019 FY pay rates but are taxed at 2020 FY tax rates?
Payroll categories and hourly rates will be increased in keeping with award increases for the first full pay period to commence on 8 July 2019.
Can you confirm the order of my tasks for end of Payroll year are
Create payment summaries & finalise STP (if applicable)
Close a payroll year
Install compliance update
Load Payroll tax tables for the new 2020 payroll year
On 8 July process payroll ending 7 July
Update payroll pay rates
On 22 July Process first full pay period (8-21 July 2019)
Thank you for your assistance.
Christine
July
July
Hi @FOOW
The fairwork website is a bit ambiguous. But since the ATO regard that whole pay period as being income for the 19/20 FY and it is taxed as such.....I’ll be paying the new rates for the whole payrun.
If you are finalising your EOPY through STP you don’t need to provide payment summaries. If you still want to provide them don’t lodge the empdupe.
Otherwise all good
Cheers
Tracey
July
July
Just to add to the confusion, we've interpreted this slightly differently - we're going to pay the increase for the first full pay period starting on or after 1 July, on the interpretation that if the pay period started before 1 July, then the pay period (as opposed to the pay date) isn't fully in the new payroll year.
Not sure if that's right or not, but we can't find any definition of what they mean by a "full pay period".
Regards,
Danny
July
July
I agree, the term “full pay period” as per fairwork is confusing.
I’m basing my decision on the ATO’s definition ie anything paid after 1 July falls into the new FY regardless of pay period.
I guess this means a call to fairwork tomorrow 😀
July
July
HI @DannyTangney and @FOOW
You're right Danny. I just spoke to fairwork and they go by the start date of the pay period. So the new rates don't apply until your first payrun with the start date in July.
Cheers
Tracey
July
July
Thanks for the confirmation @bungy15
I doubt many employees would be upset if they received the pay rise early, Tracey :-) Employers might not be quite so pleased...
Cheers,
Danny
July
July
July - last edited July
July - last edited July
Thanks for your comment Kathy. Reassuring to know I am on the right path.
I will create PAYG summaries in next few days - I did use STP for my last payroll and am hoping this does not complicate matters.