Year End for Essentials Payroll

[Digby]

Hello

It would have been very helpful if an email had gone out last week to advise that Essentials payroll can NOT be procssed past the 31 March 2022 due to IRD tax changes coming into effect on the 1 April 2022.  Our pay week runs to the end of the week, Friday 1 April 22,  but is paid to the employees on Thursday 31st March 2022.

When I called this morning (along with a lot of other people from what the help desk person told me) i was told we would either have to wait till Friday 1 April 2022 to process and pay our employees on that day or only pay them 4 days not 5!!!!  Either option given is NOT acceptable. I have never encounted this before....... Solution given is to put the end date as the 31 March.  I have been assured that IRD are aware - i hope that is correct!!!

[GemmaK]

HI there, 

We have had the same problem!  We have been told today, on the day we do our payroll, that we cannot pay our staff their usual pays and instead have to wait until 1 April 2022 - to pay the balance.  I don't recall this ever being an issue on any of the payroll systems we have used before.  Totally flabbergasted at the lack of notice, support or work around.   We tried to call, waited on hold for an hour 20, before MYOB cut off the call!

Several of our staff have DDs and APs coming out upon receipt of their usual pay.  Now we have our payroll software telling us because it is the EOFY the payroll software can't process our teams usual pay?!  What's going on MYOB?  And to find that out on the day of! 

[Digby]

Hi GemmaK

I was eventually told that if i put the week end date as the 31 March 2022 it will be OK.

IRD change their rates every year and i have never come across this before.

Issue is I cant leave this to process on Friday as its a fortnightly payroll but if i was able to i wonder if everyone would be taxed at 2022 - 2023 rates instead of 2021-2022 which would be wrong.  

[GemmaK]

Hi Digby, 

Yes, we were also told that this happens every year, but I have just looked back and there was no issue last year with the pay period running 29/03 to 4/04 with pay on 31/03.  I don't know why MYOB are unable to work this out this year?  

Yes, I think if you waited until Friday it would be taxed at the wrong rates as MYOB seem to be saying: we can't calcualte different tax rates in a period".  However, what is the right tax rate.  Should the staff be taxed at the applicable rate on the day the full wage is paid, or are they taxed at the applicable rate on the day the hours were worked?     

[GemmaK]

I have another update Digby (not from MYOB)!  I have just touched base with an accountant (phone a friend) who suggested that the applicable tax rate, will be as at the day you do your payday filing - for the entire pay.  So, in order to pay your staff the 2021/22 tax rates, you would process their pay on the 31st, including those anticipate hours for the April days.   Otherwise, if you process on the 1st or later, youre correct, they would be taxed at a different rate.  Good luck

[KaliPPS]

This issue that everyone is having is this only with Essentials? We use desktop payroll and dont seem to be having any issues?

[GemmaK]

Yes, we are only essentials.  

[Digby]

Thanks GemmaK

I am very concerned that MYOB have decided its absolutely fine just to delay processing this payroll and paying a day later.

As you pointed out people have DD's or AP’s set up to pay mortgages etc and I am sure the MYOB staff would not be at all impressed if their pay was delayed a day.

Tax rates change every year on the 1 April so I fail to see why the desktop payroll is so different to essentials payroll.

[GemmaK]

I couldn't agree more.  The email we received from MYOB stated "solution: Just wait until the first day of the new payroll year and process the pay".  So out of touch - a bit bizare. They are suggesting that we hold off paying our staff with at best, three days notice?  Feels like someone has well and truley dropped the ball, perhaps lost the ball, and gone looking for something else entirely.  

[Sam_R]

Hi @Digby @GemmaK @KaliPPS,

Thank you for your posts.

MYOB Essentials Payroll is not able to forward date a pay into a new financial year, this has been the case for a number of years now. I am sorry you were unaware of this, however, thank you for providing this feedback. I have passed this on to our development teams for future enhancements when it comes to your EOFY processes. 

Posts from previous years on this can be found here (for reference):

• End of Financial Year - Essentials
• Essentials Payroll - Pay date outside of supported financial years

I will also attach a link below regarding IRD changes for the new financial year that you may find helpful:

• NZ Payroll Compliance update - April 2022

If you have any further queries on this, please do let me know.