End of financial year procedures 2023 - Australia

From July 1 2023, Medicare levy surcharge threshholds are increasing. For details of the changes, see the ATO Medicare levy surcharge income, thresholds and rates page.

If any of your employees' Medicare levy surcharge changes as a result of the new threshholds, update their pay details:

1. Go to the Pay Details form (MPP3120).

2. Select the employee, and open the Taxation tab.

3. In the Medicare Levy Variation Declaration section, select the new Surcharge rate and MLS tier. If the employee is no longer required to pay a surcharge, select No for Levy surcharge (MLS)?
   

   

   
   

4. Save the record.

There are no changes to the minimum student loan rates, but repayment threshholds are increasing, with the minimum repayment threshold changing from $48,361 to $51,532.

For full details of the new threshholds, see the Australian government's StudyAssist website.

This change will be automatically applied to all pays with physical pay date of 1 July 2023 or later.

Employment Termination Payment (ETP) threshold amounts have changed for the 2023-24 financial year:

This change will be automatically applied to all pays with physical pay date of 1 July 2023 or later.

From 1 July 2023, the compulsory superannuation guarantee rate increases from 10.5% to 11%.

This change will be automatically applied to all pays with physical pay date of 1 July 2023 or later.

In addition to the prior codes, working holiday makers are now entitled to use three more income tax treatment codes in specific circumstances.

• DBXXXX – For employees who have died and an ETP is paid to a beneficiary that is not an employee

• DVXXXX – For employees who have had the ATO approve a PAYG withholding variation application to have their tax rate varied to 0.00

• DZXXXX – For employees who have left the employer but are owed some unpaid super

In MYOB Advanced version 2022.2.2, you can use the appropriate tax treatment codes for working holiday makers who have PAYG withholding variations (DVXXXX), or have died (DBXXXX).

Check back here for more information about when the DZXXXX code will be available.

From 1 July 2023, the payroll tax rate is 5.5% on the taxable wages paid by employers or groups of employers. A diminishing threshold applies for employers or groups of employers with annual taxable wages in Australia between $1 million and $7.5 million. For taxable wages of $7.5 million or more, tax rates will be realigned to 5.5%, down from 6.0% or 6.5%.

In MYOB Advanced Payroll, use the Payroll tax liability report to manually calculate amounts owing for state payroll taxes.

All customers must use STP phase 2 unless you have a deferral from the ATO. For more information, see Single touch payroll and Single Touch Payroll Phase 2.

 The Australian Government has introduced paid family and domestic violence leave (FDVL) for all employees. This will take effect for employers with

• 15 or more employees on 1 February 2023, and

• less than 15 employees on 1 August 2023.

For more information, see Paid family and domestic violence leave - Australia.

Company ABNs

On the SBR Registration tab of the Payroll Preferences screen (MPPP1100), make sure that each company has an ABN and software ID.

Contact details

On the General Settings tab of the Payroll Preferences screen, make sure that the contact details are correct for the person in your company who's in touch with the ATO.

Company data

Make sure that the details on the Companies screen are correct (CS1015PL).

Also, MYOB Advanced Payroll has a feature to check for errors in your data. Although this feature was introduced to validate data for Single Touch Payroll, you can also use it to before the start of a new financial year. There are two places in MYOB Advanced Payroll where you can use this feature.

• If you're using STP Phase 1, you can use the Check Company Data screen (MPPP5020).

• If you're using STP Phase 2, you can click Check data on the STP Phase 2 tab of the Payroll Preferences screen (MPPP1100)
  

  

Pay distribution

For each employee, go to their Pay Details screen and make sure that the information on the Settings and Pay Distribution tabs are correct.

Pay items

Make sure that pay items are configured correctly. For example, that pay item categories are correctly set up for STP reporting.

Taxation

For each employee, go to their Pay Details screen and make sure that the information on the Taxation tab is correct. You should verify their residency status, tax offsets, student loans etc. are set up correctly for taxation purposes.

Payroll taxation

For each employee, go to their Pay Details screen and make sure that the information on the Payroll Taxation tab is correct.

By default, MYOB Advanced Payroll includes a Fringe Benefit Reporting pay item type, which you can assign to fringe benefit pay items that are liable for payroll tax. However, you need to create another pay item type for fringe benefits that aren't liable for payroll tax.

1. Go to the Pay Item Types screen (MPPP2160).

2. On the form toolbar, click the Add Row icon :ADV_Plus: .

3. Complete the Pay Item Type ID, Pay Item Type and Description fields.

4. Leave the Payroll Tax Liable checkbox unselected.
   

   

5. On the form toolbar, click the Save icon :ADV-Save: .

To correctly update MYOB Advanced Payroll for reportable fringe benefits, you'll need up to four pay items with different settings for how the amounts will be reported.

The table below shows which settings to select for different types of reportable fringe benefits. You can select these settings on the Additional Info tab of the Pay Items screen (MPPP2210).

Need a refresher on creating a pay item? See the Creating a pay item support article.

Type of reportable fringe benefit	Pay item settings
Non-exempt Amounts to be entered are already grossed-up
Exempt The amounts to be entered are already grossed-up
Non-exempt The amount to be entered haven't been grossed-up
Exempt The amounts to be entered haven't been grossed-up

The fringe benefit tax year is from April 1 2022 to March 31 2023. The Pay Period End Date should be no later than March 31 2023.

If the Pay Period End date is after March 31 2023, the reportable fringe benefit won't appear in the correct fringe benefit tax year.

The Physical Pay Date needs to be in June 2023, otherwise the pay event sent to the ATO will be rejected.

Employees can only be added to a current pay run on the fly if their pay frequency matches the pay run frequency. If they are added to a current pay run, then the standard pay of that frequency is brought into the pay run. To avoid having to go into each employee and manually delete the pay elements, we recommend adopting the following workflow to update reportable fringe benefits.

In this workflow, the fringe benefit amounts will be updated using a new pay group with the Pay Frequency set to Annually.

1. Go to the Pay Groups screen (MPPP2710).

2. On the form toolbar, click the Add Row icon :ADV_Plus: .

3. In the new row, complete the fields as follows:

   Field	Details
   Pay Group ID	ARFB
   Description	Reportable Fringe Benefits
   Hours per Day	0.0000
   Hours per Pay	0.0000
   Hours per Year	0.0000
   Pay Frequency	Annually
   Pay Default	N/A
   Last Pay Period Start Date	01/04/2022
   Last Pay Period End Date	31/03/2023
   Last Physical Pay Date	21/06/2022
   Active	click if yes

   

4. Go to the Employee Pay Groups screen (MPPP2250).

5. Add the ARFB pay group you created to each employee to be updated.

   1. Select the Employee from the search window or enter the Employee ID.

   2. Add the new Reportable Fringe Benefits pay group.

   

   

   You can go into each Pay Details for each employee attached to the Reportable Fringe Benefit pay group and add the Pay Item to the Standard Pay or you can add the pay item to a current pay on the fly.

   
   

1. Once all the employees have been updated then go to the Manage Pays form (MPPP4110) and from the Actions dropdown list Create Pay.

   

2. Select the new pay group and click OK.

   

3. Once the pay is OPEN then “View Pay Run”.

   

   

   When Single Touch Payroll (STP) is active in MYOB Advanced People, you MUST enter a date for the Physical pay date; no later than 30th June of that financial year. Having a Physical pay date of 31st March would be outside of ATO reporting requirements.

4. Open each employee’s pay and add the Reportable Fringe Benefits (RFB) pay item that matches the reporting requirements of that employee’s fringe benefit.
   

   

1. Once all employees have been updated for RFB then return to the pay run by clicking on the Pay Run ID.

2. Process pay run

   1. On the Pay Run Details form (MPPP3120) from the main toolbar, select Process.

      

      
      A Pay Run popup will appear.
      

      

   2. Once you select OK you can only cancel or complete the Pay Run. The Pay Run Status changes to PROCESSING.

3. Complete pay run

   1. Staying on the Pay Run form, from the main toolbar, select Complete.

      

      The following Pay Run popup appears:
      

      

   2. Once you select OK, the pay event declaration will appear

      

   3. Once you tick the checkbox I agree, and then select OK, the pay event declaration will appear. The Pay Run is complete.