Year-End Payroll & Tax Prep: Start Now for Peace of Mind!
The end of year holiday period can be make or break for your business. Whether you're gearing up for a rush or planning a shutdown, the key is early planning for payroll, tax and super, alongside careful compliance with workplace laws. Now’s a good time to map your pay cycles, check ATO obligations, and line up Fair Work entitlements so your team’s paid correctly and your business stays compliant.
Key Payroll Scheduling & Compliance
Start by checking whether any year-end paydays will fall on public holidays or during your closure.
If they do, you’ll need to bring the pay run forward so staff are paid before bank cut-offs, and tell employees about any temporary date changes in writing.
While the ATO generally allows lodgment and payment on the next business day when a due date falls on a weekend or public holiday, that doesn’t extend to paying wages late.
Keep your PAYG withholding and BAS lodgments on track:
Monthly PAYG for December wages is typically due on 21 January.
The October to December BAS for small quarterly reporters is generally due by 28 February.
If you’ll have difficulty meeting due dates, contact your tax adviser and the ATO early to discuss options.
Superannuation (SG) and Single Touch Payroll (STP)
Report each pay run through Single Touch Payroll (STP) on or before payday, including any brought-forward payments you’re processing before year-end closure.
STP doesn’t replace your BAS or the obligation to remit withheld amounts, so make sure your software and team are ready for any early runs.
Don't overlook superannuation guarantee (SG) contributions on wages and paid leave taken over the break; annual leave and public holiday pay are part of ordinary time earnings for SG purposes.
October to December quarter super must be received by employees' funds by 28 January, so pay early to allow for bank processing times. Missing that date can trigger the SG charge, interest, penalties, and loss of deductibility.
Bonuses and Staff Gifts (FBT)
If you provide year-end bonuses or staff gifts:
Process bonuses through payroll and withhold tax.
Consider whether FBT applies to functions or presents.
The minor benefits exemption may cover low cost, infrequent items, but good records are essential.
Workplace Law and Leave Management
On the workplace law front:
Public Holidays (Non-Working): Full time and part time employees who would normally work on a public holiday are entitled to their base rate for ordinary hours if they don't work.
Public Holidays (Working): You can ask employees to work public holidays, but requests must be reasonable and employees can refuse on reasonable grounds. If they do work, apply the correct penalty rates or time off in lieu under their award or agreement.
Leave During Holidays: Where a public holiday happens during an employee’s annual leave, it counts as a public holiday, not a leave day.
Holiday Shutdowns: You can only direct employees to take annual leave if an applicable award or registered agreement allows it, usually with advance written notice.
Leave Shortages: Where staff don't have enough leave, many awards allow leave in advance or unpaid leave by agreement; make sure to document any agreement in writing.
Check whether leave loading applies to annual leave taken over this period, and ensure your payroll system calculates it correctly.
Final Reconciliation and Advice
Round things out by reconciling payroll, coding public holidays accurately, double checking leave loading and bonuses and forecasting cash to cover wages, PAYG, super, rent, and utilities through the break.
Finally, remember that one size doesn't fit all. Industries like healthcare, hospitality, retail or construction might have unique award provisions or state/territory laws (eg constrained trading days). Proper planning and advice will give you peace of mind as you head into the end-of-year period.