Your Step-by-Step Payroll Guide for EOFY 2025
With the end of the financial year now upon us, it’s essential to ensure all employee payroll and superannuation records are accurate and up to date.
Timely and compliant reporting not only meets your legal obligations but also supports a smoother year-end process for both you and your employees.
Here’s a practical checklist to help your payroll team navigate this busy time:
PAYG Withholding
- Finalise pay for 2024–2025: Ensure the final pay received by employees is dated on or before 30 June 2025
- Update tax variations
- Delete any variations that expire on 30 June 2025
- Enter new tax variations starting from 1 July 2025
- Review termination payments
- Adjust redundancy worksheets to reflect the new tax-free limits and increased ETP cap
- Note: If an employee is terminated by 30 June but paid on or after 1 July, the new rates and thresholds will apply.
- Fringe Benefits Reporting
- Review employees who left after 31 March 2025 to determine if they’ll have reportable fringe benefits (RFBs) in 2025–2026.
- Maintain their STP records and complete the RFB field at year-end if applicable.
- Double-check RFBs exceed the disclosure threshold: $3,774 ($2,000 × 1.8868).
- Consider sending an explanatory memo with an ATO fact sheet to reduce employee queries.
- Correct overpayments: Reverse any overpaid amounts from wages and recode as a loan before STP finalisation.
- Ensure correct income year
- Payments received on or after 1 July 2025 must be reported in the 2025–2026 income year.
- Finalise STP reporting
- Submit your annual STP report by 14 July 2025, ensuring the “final event indicator” is set to true for all staff.
- Prepare for pay changes
- Check new pay rates and salary sacrifice arrangements starting 1 July.
- Award rate increases usually take effect from the first full pay period on or after 1 July.
- Extra pays in 2025–2026
- Determine if the financial year includes 53 weekly or 27 fortnightly pays.
- Employees may wish to withhold additional tax.
- Check superannuation implications for employees nearing the $30,000 concessional cap.
Superannuation
- Rate increase to 12%
- Applies to all wages received on or after 1 July 2025, regardless of when they were earned.
- RESC reporting
- Ensure reportable employer superannuation contributions (RESC) are correctly reported in STP.
- New maximum contribution base
- Adjust for the increased super cap: $7,500 per quarter or $2,500 per month if applied monthly.
Payroll Tax & WorkCover
- Review employee locations
- Ensure you have the correct payroll tax and WorkCover registrations across all applicable states and territories.
- Fringe Benefits Tax (FBT)
- Obtain a copy of the lodged FBT return for use in payroll tax and WorkCover annual returns.
- Contractor declarations
- Gather and declare contractor details where required.
- Check rule changes
- Confirm any updates in reporting requirements for payroll tax and WorkCover compared to last year.
- Payroll tax groups
- Review group membership—note any entities that have joined or exited during the year.
- Incentives and rebates
- Visit each state or territory’s payroll tax website to check for any current incentives or rebates, including those announced in recent budgets.
Wrapping Up
Following this checklist can help your business stay compliant, reduce audit risk, and close the financial year with confidence. Start early, double-check your data, and lean on expert support if needed.