What process is required to ensure my payroll will bring into effect the required tax compliance changes for the year commencing 1 April 2011? Also, what reports do I need to print prior to moving into the 2011 year?

In order for the required Tax Compliance Changes being introduced from 1 April 2011 to take effect within your payroll it is extremely important to install your 2011 payroll PRIOR to rolling into the new financial year.

If you require MYOB Payroll training or tutorials, or are looking for a MYOB Payroll upgrade, please don't hesitate to contact us.

For important information on the New Tax Rates coming into effect on 1 April 2011 and how to deal with pays surrounding this time please  click here.

Instructions

1. Finish the last pay of March.

2. Complete the month-end process, as you normally would.

• If you are using ir-File, create the csv file.
• Run your Employer Monthly Schedule as usual.
• Create any journals required if you are integrating with MYOB Accounting/Premier.
• Complete any other usual end of month procedures.

3. Complete an additional backup (keep one off-site). For instructions see How do I backup my MYOB Payroll data?

4. As shown in the image below, print the following reports (recommended):

• Employee Balances
• Pay Audit Trail
• Pay Code Totals
• Holiday Accruals (print totals as they are at the EOY)
• IRD Schedule (print this for your records)
• Earnings Certificates - These are designed for printing on letterhead. The Earnings Certificates are not required by the IRD, but we recommend that they be printed so employees can check the information provided by the IRD.

Note: If you have entered all or part of your Pay History manually, through ENTER HISTORY, this data will not be included in the Gross earnings/PAYE details of the Earnings Certificate.

5. As shown in the image below, print the following reports (optional). These will all print on one page per employee:

• Employee Audits
• Employee Details
• Employee Holidays
• Employee Sick Leave
• Employee Alternative Holidays

Important: For employers who have or need to process a pay that has ended on or prior to 31 March but the pay is not being paid until on or after 1 April the next step should NOT be followed. Instead, follow the Change PAYE Period procedure outlined in the following Support Note.

6. Change the Current Pay Ended date to your first pay date in April 2011. The payroll will prompt you to update your PAYE Period - follow through this process.

Note: If any employee's holiday anniversary or sick leave anniversary occurs between your last pay and the first pay date in April, then their leave details will need to be updated using the normal procedure.

How is the Payroll Annual Leave rate calculated?

MYOB Payroll calculates the 'Annual Leave' rate in accordance with the Holidays Act 2003.According to the Holidays Act 2003:

The rate at which Annual Holidays are paid at must be the greater of :

• (i) the employee's "Ordinary Weekly Pay" as at the beginning of the annual holiday, or
• (ii) the employee's "Average Weekly Earnings" for the 12 months immediately before the end of the last pay period before the annual holiday.

To see how MYOB calculates the Annual Leave rate click on the the ellipse button (box with 3 dots) to the right of the Annual Leave Rate. This can be found under the Maintain Employees: Leave Details tab.

This calculation will show the previous 52 weeks Gross Earnings, divided by the number of weeks worked. This gives the "Average Weekly Earnings".

If an employee has worked 'Overtime' OR earned 'Additional Pay' within this period the rate that is calculated will be higher than their "Ordinary Weekly" rate.

In accordance with Holidays Act 2003 MYOB will pay the Annual Leave at the Greater of the "Ordinary Weekly" rate OR the "Average Weekly"earnings.

For more info about how custom lists can be of use to you and your business give us a call on 0800 160 260 or complete the form to the left and we will look forward to hearing from you.