Xero is now ready for you to transition to the new more rigorous reporting requirements. You have until 31st March 2023, unless you request a deferral. This will not change how much or how often you pay your employees – awards etc are not changing.
What do you need before you start clicking buttons?
Gross wages need to be broken down into the individual components:
- allowances,
- leave,
- commissions,
- directors fees (not working in the business),
- bonuses,
- loadings,
- overtime,
- RDOs
- workers compensation payments.
If you grouped first aid, tool or all purpose allowances into the hourly rate you pay your staff, you need to disaggregate those amounts and display them separately.
You’ll need to confirm the rate of each allowance and create new pay items in xero.
You may need to make changes to the way you process staff leave. All leave payments need to be processed as leave requests (you cannot create a ‘pay item’ of leave.) Only leave items can be matched to the ATO reporting requirements.
You need to update employee records to include:
- Employment type
- Income type
- Employment basis
- Tax scale
Finally, you’ll need to start reporting all the extra details to the ATO.
Just realised this a big job?
Not sure you’ve properly encompassed all the loadings into the hourly rate you’ve been paying staff?
You can request an deferral to buy a little extra time. (or perhaps like us, you can’t cope with a financial year that chops and changes part way through).
Get your payroll expert to review where you are at, if you’re overwhelmed already.
