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EOFY: Your guide to end of financial year payroll for 2024

The end of financial year (EOFY) is an important time to be on top of all things payroll. Here is what you need to know for 2024.
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The end of financial year (EOFY) is an important time to be on top of all things payroll, and we know it can be a stressful time for Kiwi business owners. To help you feel confident with the upcoming payroll legislation changes and EOFY requirements, we’ve pulled together everything you need to know into one easy blog. 

This article will cover:

  • An overview of changes to legislation

  • Processing your final pay run

  • Cashing up annual leave 

  • Reports you might need 

  • Updating and reviewing your payroll

  • EOFY resolution

1. Upcoming changes to legislation in 2024

Minimum wage increase

From 1 April 2024, the minimum wage will increase by $0.45 to $23.15 per hour, and the training and starting-out minimum wages will also increase to $18.52 per hour, keeping it at 80% of the adult minimum wage.

If you have employees who are affected by these changes, you will need to update their pay rates as part of your payroll process. If you’re using Smartly, it’s pretty straight-forward to update pay rates, and we’ll prompt you along the way if you forget.

What you need to do:

  • Review your payroll and work out which people are on minimum wage or close to it. If you’re using Smartly, you could run the Employee Card report to help you with this.

  • Make sure you update any pay rates impacted by the change before 1 April 2024. 

  • For easy step-by-step instructions on how to update your employee pay rates, check out our help article.

ACC Earners’ Levy rate increase

The ACC earner levy rate will increase from $1.53 to $1.60 for every $100 of liable earnings from 1 April 2024. The maximum liable earnings threshold will also increase from $139,384 to $142,283 for the 2024/25 tax year, with the maximum levy payable becoming $2,276.52.

The minimum liable earnings that self-employed people pay Work and Earners' levies on will increase to $44,250.

Student loan threshold changes

The student loan repayment threshold has increased to $464 per week for the 2024/25 tax year, and is effective from 1 April 2024. 

This is broken down to pay period threshold amounts in the following table: 

Student loan changes

Using Smartly? We will automatically update the ACC Earners’ Levy rates and Student Loan thresholds for you. Easy peasy!

2. Processing your final pay run.

It’s simple, your final pay for the 2023/24 financial year is the same process as normal. It is the last pay run with a direct credit date on or before 31 March 2024. You can also use this final pay run to check your employees’ payslips and pay data is correct, as well as ensuring it’s in the right period for your reporting.

When using Smartly this is all sorted for you, and you can pull any reports as and when needed. Easy right?

3. Cashing up annual leave.

The end of financial year is a common time for employees to cash up their annual leave.

Here’s a couple of things to remember:

  • A maximum of one week of an employee’s four-week entitlement can be cashed out every 12 months of continuous employment. This can be done all at once, or through multiple requests to cash up until the entire week is cashed up.

  • Cashing up annual leave needs to be requested by the employee in writing and agreed by both parties. As an employer, you do have the right to say no. Employment New Zealand has some useful information about cashing up annual leave. 

A person dealing with EOFY reporting

4. Reports you might need.

Year to date earning and allowances report

This report shows an employee’s data as a certificate of earnings that can be used at the end of the tax year. If you have an accountant, it’s likely they may ask you for this report.

We’ve got easy step-by-step instructions to help you get the year to date earning report in Smartly. 

63-day holiday report

This report shows all earned and taken leave, including any adjustments that have been made. The amount shown for annual leave paid in advance is based on the weeks value calculated at the time of the payment. This report is often used as part of the end of financial year reporting, and if you have an accountant, they may also ask you for this report.

We’ve got easy step-by-step instructions to help you get the 63-day holiday report report in Smartly.

For a full breakdown of all the different reports that are available in Smartly, check out our help article.

5. Updating and reviewing your payroll and employee details

It’s a great time to do a general tidy up, so you can make sure your employee’s information is up-to-date for the new financial year.

Here’s a quick checklist you can follow to ensure everything is in order:

  • Check the pay rates for all your employees

  • Make sure their tax codes are correct 

  • Check employee details, like their contact information and appointment information.  

  • Check who has access to make changes within your payroll site

  • Review who has the authority to view and approve your pay runs

  • Check the Employer Superannuation Contribution Tax (ESCT) rate for each employee

If you’re using Smartly for your payroll, your employee’s ESCT rates are calculated automatically – easy! We do still recommend thoroughly checking the earnings that Smartly estimates for you, so you can be sure they appear correct based on what you know about your employee’s earnings. 

If you’re not using Smartly, you will need to verify the ESCT rate for each employee that will be used for the coming tax year. ESCT rates depend on the employee’s income and how long they have been working for you. Check out this page for more information about ESCT. 

Need more information?

It’s not always a straightforward situation so we suggest contacting Employment New Zealand on 0800 20 90 20 if you’re unsure about anything to do with your team. IRD are also there to help when it comes to any tax-related queries.

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6. EOFY Resolution: Switch to Smartly today

If you’re not using Smartly already, start the new financial year with automated, accurate and compliant payroll. We take care of the faffing so you can focus on what’s more important – running your business. 

What are you waiting for? We've got over 22,000 Kiwi businesses using Smartly and we'd love for you to join us.

Sign up before 31 May 2024, and you’ll get $20 off your monthly base fee until 31 May 2025! That’s 12 months of simple and secure payroll from as little as $20 per month. How good?

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