Financial year-end processing

What Is Financial Year-End Processing?

Financial year-end processing refers to the structured series of accounting, payroll, and compliance tasks businesses must complete at the end of the Australian financial year (30 June). This process ensures all financial records are accurate, obligations are fulfilled, and reporting is aligned with Australian Taxation Office (ATO) requirements.

In short, it’s the business equivalent of tidying your financial house, wrapping up one year and preparing for the next.

ATO – End of Financial Year Information

Key Components of Financial Year-End Processing

1. Finalising Payroll
   Employers must finalise payroll for the year, ensuring all wages, superannuation, and tax withheld are correctly recorded. With Single Touch Payroll (STP) Phase 2 now mandatory, finalisation involves submitting a final STP event indicating that employee data is “tax ready” for the ATO.
2. Reconciling Accounts
   This involves cross-checking accounting records, matching internal reports with bank statements, superannuation payments, payroll reports, and supplier invoices. Inaccuracies must be identified and corrected before submission deadlines.
3. Superannuation Contributions
   All super guarantee (SG) contributions for the financial year must be paid by 28 July, but to claim a tax deduction, they need to be received by the super fund by 30 June. That’s where super clearing house timing becomes important.
4. Generating PAYG Summaries (If Required)
   While most employers report via STP, some may still be required to generate PAYG payment summaries for specific employee types or under certain exemptions.
5. Fringe Benefits Tax (FBT) Reporting
   If you’ve provided benefits such as a company car or entertainment, you may need to report and pay FBT for the year ending 31 March. FBT must be reported separately from payroll.
6. Leave Balance Reviews
   Ensure accurate leave accruals—annual leave, personal leave, long service leave—are up to date. This information is critical for liability reporting and budgeting.
7. Asset Depreciation and Write-Offs
   Small businesses may be eligible for the instant asset write-off for eligible purchases made before 30 June. Review asset purchases and depreciation schedules with your accountant.

Common Deadlines to Remember

These dates may change slightly each year, so always refer to the latest ATO calendar.

How Microkeeper Simplifies Year-End Processing

Microkeeper automates many of the tasks that make EOFY stressful:

• STP Finalisation: Submit end-of-year reports directly to the ATO with a few clicks.
• Payroll Reports: Access detailed earnings, deductions, and super reports per employee.
• Award Interpretation: Automated calculations reduce errors and ensure compliance.
• Leave Management: Track balances and accruals for all employment types.
• Integrated Super Payments: Using Beam, process all SG contributions in one step.

Explore Microkeeper's payroll features that facilitate EOFY processing.

Tips for a Smooth Year-End Process

1. Start Early
   Don’t wait until the final week of June. Begin reconciliations and reporting in early June to allow for error correction.
2. Check Data Accuracy
   Confirm employee details, including Tax File Numbers (TFNs), addresses, and super fund information.
3. Engage Your Accountant
   Your accountant or bookkeeper should assist with tax planning, deductions, and final lodgements. Schedule your meetings in advance.
4. Update Your Payroll Software
   Ensure your system includes the latest tax tables, SG rate updates, and any ATO compliance changes (such as STP 2 fields).
5. Communicate with Staff
   Let your employees know when their income statements will be ready in myGov. Transparency helps build trust and reduce support queries.

FAQs About Financial Year-End Processing

Do I need to give my employees a group certificate?

‍No, if you're using STP, income statements are sent directly to the ATO and visible in myGov. Manual PAYG summaries are only needed in rare circumstances.

What happens if I don’t finalise STP on time?

‍Late lodgements may result in ATO penalties and employee frustration due to delayed access to tax-ready income statements.

Is super deductible if it’s paid after June 30?

‍No. To claim super contributions as a deduction for the current year, they must be received by the employee’s super fund by 30 June—not just sent.

Final Thoughts

Financial year-end processing is a vital part of running a compliant and financially sound business. While the process may seem complex, the right systems and preparation can turn it into a straightforward routine.

With Microkeeper, much of the work is automated—giving you back time, reducing compliance risks, and ensuring employees get what they need when they need it.

_{Disclaimer: Always consult a registered tax professional for advice specific to your business circumstances.}