As the year draws to a close, it’s essential for every business to start year-end payroll planning. Whether you’re preparing for a busy trading period or a full holiday shutdown, early preparation around payroll, tax, superannuation and Fair Work obligations helps ensure compliance — and peace of mind.
1. Review Pay Cycles and Public Holidays
Check your pay cycles to see if any year-end paydays fall on public holidays or during your business closure. If they do, bring your pay run forward so employees are paid before bank cut-offs. Communicate any temporary payroll date changes in writing.
While the ATO allows lodgment and payment on the next business day if a due date falls on a weekend or public holiday, this doesn’t apply to wage payments — staff must still be paid on time.
2. Stay on Top of PAYG and BAS Lodgments
Keep your PAYG and BAS lodgments up to date:
- Monthly PAYG for December wages: due 21 January
- Quarterly BAS (October–December): due 28 February
If you’ll struggle to meet these ATO deadlines, contact your tax adviser early to discuss deferrals or payment options.
3. Report Correctly Through Single Touch Payroll (STP)
Every pay run must be reported via Single Touch Payroll (STP) on or before payday — including any brought-forward payments before your year-end shutdown.
STP doesn’t replace your BAS or PAYG obligations, so make sure your payroll software and team are ready for early processing.
4. Don’t Overlook Superannuation Guarantee (SG) Contributions
Include superannuation guarantee (SG) payments on wages and paid leave taken during the break — both annual leave and public holiday pay are considered ordinary time earnings.
The October–December quarter SG contributions must be received by funds by 28 January. Pay early to allow for bank processing times and avoid SG charge penalties.
5. Bonuses, Gifts and FBT Considerations
If your business provides year-end bonuses or staff gifts, ensure they are processed through payroll with appropriate tax withholding.
Consider whether Fringe Benefits Tax (FBT) applies to gifts or staff functions. Low-cost, infrequent items may qualify for the minor benefits exemption, but keep accurate records to stay compliant.
6. Public Holiday and Employee Leave Entitlements
Full-time and part-time employees who would normally work on a public holiday are entitled to their base pay if they don’t work.
Employers can request work on 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.
If a public holiday falls during annual leave, it counts as a public holiday, not a leave day.7. Managing a Holiday Shutdown and Leave Balances
If you’re closing down for the holidays, you can only direct employees to take annual leave if your award or agreement allows it — usually with advance written notice.
For employees without enough leave, consider leave in advance or unpaid leave by agreement, and document everything in writing.
Double-check leave loading calculations to ensure payroll accuracy.
8. Final Payroll and Cash Flow Checks
Before your business closes for the year, take these final steps:
- Reconcile payroll and leave balances
- Code public holidays correctly
- Verify bonuses and leave loading
- Forecast cash flow for wages, PAYG, super, rent and utilities
This helps you stay on top of payroll compliance and cash management over the festive period.
9. Industry-Specific Payroll Considerations
Some industries — like retail, hospitality, healthcare and construction — have unique award provisions or state-based trading day laws.
If you’re unsure about your specific obligations, check the Fair Work Ombudsman and ATO websites, or speak with your accountant or tax adviser.
Plan Ahead for Compliance and Peace of Mind
Proper year-end payroll planning helps you stay compliant with ATO deadlines, superannuation requirements and Fair Work laws — while keeping your team happy and your business running smoothly.