Payroll Year End for Churches using Xero

Here are the main steps to process your Payroll Year End: Click Here for PDF version of this process

  1. Make sure that all pay runs for the year have been processed
  2. Reconcile the Bank account used to pay the wages
  3. Check that the Payroll Clearing or Wages Payable Account is zero
  4. Reconcile payroll reports to general ledger – The purpose of this step is to increase the likelihood that all pays have been processed through the payroll system and the annual Payment Summaries will be correct
  1. Produce & send the Payment Summaries to employees by 14th July & ATO by 14th August

Steps 3-5 in detailPicture1

  1. Check that the Payroll Clearing or Wages Payable Account is zero 
  2. Reconcile the payroll reports to the general ledger

First see this video: https://help.xero.com/au/PayrollEOFY

Run the Payroll Employee Summary Report for the year & export into a spreadsheet

Payroll Employee Summary
From 1 July 2015 to 30 June 2016
Employee Earnings Deductions Tax Super Net Pay
Employee 1 $74,951.82 $36,813.84 $4,680.00 $0.00 $33,457.98
Employee 2 $38,305.40 $0.00 $4,744.00 $3,638.93 $33,561.40
Employee 3 $85,310.71 $49,079.70 $4,104.00 $10,807.02 $32,127.01
Employee 4 $88,442.45 $48,397.44 $5,328.00 $0.00 $34,717.01
Employee 5 $48,143.66 $23,766.59 $1,872.99 $7,883.40 $22,504.08
Total $335,154.04 $158,057.57 $20,728.99 $22,329.35 $156,367.48

Total these. The total must equal to the totals from the Payroll Employee Summary

63610 Admin Salaries $38,755.27
61150 MEA Entitlements $158,057.57 $158,057.57
61110 Ministers Wages $148,697.31
Leave Accruals ($9,906.25)
Leave Accruals ($449.86)
63620 Admin Super $5,248.01
61170 Ministry Super $17,081.34
21330 PAYG Payable $20,728.99
Total $335,154.04 $158,057.57 $20,728.99 $22,329.35   

Run the Payment Summary Details Report as at June 2016

Employee Gross Payments PAYG
Employee 1 $38,137.00 $4,680.00
Employee 2 $38,305.00 $4,744.00
Employee 3 $36,231.00 $4,104.00
Employee 4 $40,044.00 $5,328.00
Employee 5 $24,376.00 $1,872.00
Total $177,093.00 $20,728.00

Compare the Gross Payments to Earnings – Deductions

$335,154.94 – $158,057.57 = $177,097.37  

– Difference is $4.37 – This is acceptable as the cents are removed from Gross Payments

  1. Send & lodge the Payment Summaries
Steps Instructions & Videos
Prepare and distribute employee payment summaries https://help.xero.com/au/Payroll-EOFY-CheckDetails
Lodge the Payment summaries with ATO directly from Xero https://help.xero.com/au/Payroll-EOFY-SendAnnualReport

No need for:

  1. payroll roll overs
  2. installation of new tax tables

Please let us know if you have any questions or need any help.