The holiday season is right around the corner and before you know it you will be putting on your out of office or saying see-ya later to your team! The last thing we need in the lead up to the silly season is to make a mistake with payroll, which is easy to do, as there are a lot of moving parts to consider. This helpful checklist will detail everything you need to consider for your business.
- Holiday Groups. One of the important steps is to make sure you have the correct Holiday groups assigned to each Employee Profile. Holiday Groups ensure that when an employee applies for leave the public holiday won’t deduct from their annual leave balance.
- Public Holiday’s. If your employees are working on any of the public holidays, check your award or agreement to see how they should be treated. With STP Phase 2 now reporting overtime & penalty rates to the ATO separately from other gross earnings, this space may see some increased audit activity.
- Annual leave loading. Have you reviewed your award to verify that your employees qualify for annual leave loading? Leave loading is money paid on top of an employee’s normal pay to compensate them for expenses during annual leave. If leave loading applies to your staff, its important to ensure that this is setup in Xero to calculate correctly.
- Annual Leave. If your business has a shut down period over the holiday season then employees will need to apply for annual leave or you will have to do this on their behalf. Ensure this is completed before you need to process the payrun in Xero. What happens if staff don’t have enough annual leave? You can have them take leave without pay or allow them to go into negative leave balance.
- Christmas Bonuses. Holiday bonuses are a way to show appreciation to your hardworking staff. Ensure you record any holiday bonuses paid with the correct earnings category in Xero to ensure these are taxed correctly and reported appropriately to the ATO via STP Phase 2.
- Schedule the Pay Run. You can schedule the payruns in Xero in advance if yourself or the person who completed the payroll is going to be on leave. Setup with your bank account future payments – keep in mind bank processing times and the effect public holidays have on these.
