Employee satisfaction is the key to the sustainability of a business. If your employees are satisfied, they’ll provide you with the best output. And there’s no better way to keep your employees satisfied than providing them regular payment. For this reason, a robust payroll outsourcing service is vital for the growth of any small business.

Generally, small businesses don’t have adequate manpower to manage everything. Most businesses have one in-house accountant in charge of managing the finances. As a result, payroll is always a struggle. And to make your life easier, outsourcing your payroll is always a good idea. 

So, you might ask, what is a payroll outsourcing service? Basically, it’s a way to outsource your payroll and employee payments to another company. In this article, we’re going to discuss everything you need to know about outsourcing your payroll!

What is Outsourcing Payroll Service:

Generally, the payroll system refers to the method of providing the employees with their payments. It helps to monitor specific details such as the employees’ working hours, their bonuses and benefits, taxes for the company and the individual employee, and certain other factors.

Payroll management is a complex process and requires a fair bit of effort to keep everything running. Any mistake in payroll can cause a lot of trouble; such as employee dissatisfaction and legal trouble during taxation. 

In order to manage everything properly, you can hire a specialized agency to manage your payroll for you. They manage all the necessary resources to make sure your employees are paid on time. They’re getting all the necessary support from your business. Everything is managed on time. This process is known as outsourcing payroll service. There are many companies that specialize in payroll management. To receive their services, you have to sign a contract with them. Although there’s a bit of an investment involved, the long-term benefits make the service worth the money.

Benefits of Outsourcing Payroll Service:

Now that we’ve discussed what is outsourcing payroll service, here are the benefits of outsourcing payroll service for a small business:

Saves Time:

Payroll management is a somewhat complicated process. And it requires a lot of time and effort to keep it running. Suppose you’re a small business and plan to use your manpower for payroll management. In that case, your inadequate manpower will struggle with managing everything. The entire process will take much longer than a company that specializes in payroll management.

When you’re outsourcing your payroll service, your accountants have time in their hands to focus on other aspects of your business, thus increasing your productivity to a great extent as well. 

Saves Money:

You might wonder how getting a payroll service saves money when it’s an investment in the first place. To begin with, when you’re investing in a payroll service, it’s going to cost significantly less than hiring a massive team of accountants for your business.

Furthermore, since your payroll is managed by a group of experts, the chances of errors are very slim. As a result, you won’t have to pay for penalties or fines imposed by the taxation service. Also, you might be able to apply for levies and tax cuts due to your payroll management. 

For this reason, outsourcing your payroll is more cost-effective than getting it done in-house.

Keeps Your Information Secured:

Your payroll information is very sensitive. As a result, it needs to be protected at every moment. Most reputed payroll service providers have a very robust mechanism in place to protect your information. These include encryption and password protection for your information. 

However, it’s essential that you’re getting your payroll done by a reputed payroll provider and ensuring they have a robust security system to protect your information.

Keep Your Employees Notified:

Certain payroll services have a backlog system. You can use it to keep your employees notified about their salaries, bonuses, taxes, etc. Basically, your employees can log in to the portal to see all the details of their payments. 

This is a great way to keep your employees satisfied since they already know how much money they’re getting and all the details available. So, make sure your outsourced payroll provider has this feature.

Precautions Before Outsourcing your Payroll Service:

Before you outsource your payroll service, you need to keep a few things are kept in check. Otherwise, outsourcing will only do more harm than good. These include:

Licenses and Accreditation:

A company needs to have proper accreditation and licenses to be considered a payroll service. So, before you get an outsourced payroll service, make sure it’s accredited, and all the licenses are valid. Taking services from an unlicensed company not only risks your information and create a loophole for mistakes, but you will also have to deal with a plethora of legal troubles. So make sure you’re getting your services from an accredited company.

Paying for Too Much:

While this isn’t a problem per se, most payroll service providers will try to coax you into signing up for multiple packages. These packages have certain features that you don’t need. As a result, you end up paying too much for services you don’t need. Considering that you’re a small business, this additional cost does more harm than good.

For this reason, we recommend that when you’re outsourcing your payroll service, you aren’t paying for too much or getting services that aren’t beneficial for you. 

Conclusion:

Payroll is an integral part of your business. It keeps your business steady and employees satisfied. However, it’s normal for small businesses to struggle with payroll, and outsourcing is a fantastic solution.

If you were wondering what is payroll outsourcing services, we’ve answered everything you need to know about it. We hope you find this article helpful!

Managing payroll service is one of the most complicated parts of running a small business. Most small businesses generally have little manpower. Thus, most of them don’t have in-house accountants. As a result, managing the payroll and paying taxes accordingly becomes troublesome.

One of the best ways to deal with payroll is to get a payroll service. A payroll service would manage your paperwork, make the payment process smoother, and help you submit your documents during tax times. 

However, getting payroll services in the eastern suburbs isn’t that easy. Not every service is worth the investment. So, you need to take a few things into account before getting a payroll service.

In this article, we’re going to discuss a few essential factors that you need to consider before getting a payroll service in the eastern suburbs. Let’s begin!

Factors to Consider Before Getting a Payroll Service in the Eastern Suburbs:

Type of Payroll Service:

There are many types of payroll services in the eastern suburb for you to choose from. Generally, small businesses don’t have an in-house accountant due to financial constraints. However, small businesses can have bookkeepers who will maintain payroll-related information for your business. You can either hire a bookkeeper or choose a bookkeeping service for your business.

Furthermore, you can also opt for a digital payroll system for a more “hands-on” approach. There are two types of digital payroll systems, online and offline software-based payroll. In an online system, most of your information stays on the cloud. So, you can access that information anytime, anywhere you want. However, you’d have to pay for cloud storage, constant internet, and regular software subscription.

However, you can save a bit of money by getting offline software. You can store the information on your computer and access it from there. There aren’t any cloud computing or software update costs. But, you might lose your data if your computer goes out of order or your folders get corrupted.

Services offered:

Your payroll system for eastern suburbs should be comprehensive. It should deal with all the nitty-gritty of your payroll. From paying your staff to filing taxes, your payroll should be able to get everything done.

When you’re getting a payroll service in the eastern suburbs, make sure it provides you with the basic necessities. These include; payroll processing, filing necessary taxation, making adjustments after every new recruitment, annual reports, etc. Prioritize these before other features.

However, other additional services, such as mobile access, self-service, PTO management, etc., are welcome additions that can massively help your business. So, make sure you’re always going for a feature-packed service.

Cost:

Now, let’s talk about the elephant in the room, the cost of getting a payroll service! Most small businesses opt for a cost-effective solution due to financial constraints. However, getting the cheapest shouldn’t always be the option.

Investing a bit of money in your payroll can have its own benefits. These include ease of payment and eligibility for subsidies. Furthermore, some payroll services in the eastern suburbs have hidden costs involved. So, make sure you know all the details before investing your money.

Security:

Whenever you’re getting a payroll service, make sure it’s secure. Your payroll provider will have to deal with a plethora of sensitive information. Information such as the number of employees in your business, your payment details etc. is extremely sensitive. 

Ensure your sensitive data is stored in secured servers, and the information is delivered through secure channels. Compromising your information to save up some money can be suicidal in the long run.

Ease of Use:

Payroll is a complicated task. But, payroll management shouldn’t be rocket science. Your payroll service should be easy and efficient. Whether you’re using digital services or consulting an office, it should be easy to work with.

If your payroll service isn’t user-friendly, we recommend getting a new service immediately.

Demo Service:

This is eligible for people who are availing online services. Some online providers provide a free demo of their service to attract users. In such demos, you either get the full service for free for a few days, or some benefits for one month. 

If your preferred service has a demo available, try to avail it. This will give you an idea of the payroll service and i’s technicalities. If you like the demo service, you can pay for the whole deal.

However, juggling around demo services for too long can be detrimental. So, make sure you make your decision quickly.

Reviews:

Before you sign an agreement with a payroll service in the eastern suburbs, do your research. Look for their old clients and their reviews of the business. Reach out to their clients and get a complete idea about their service. If the reviews don’t live up to your expectation, don’t go for it!

Liabilities:

To err is human, mistakes can happen any time, and that’s normal. However, the reason you’re receiving a payroll service is to avoid penalties due to errors in your tax documents. 

However, your payroll service should be liable for their mistakes. If they make any mistake in the paperwork, they should be willing to pay the penalties and reimburse your losses. Otherwise, not only you’re paying for a service, but you’re also paying for their mistakes. 

Qualifications and Accreditations:

Every good payroll provider should have enough documents to back up for credibility. There are specific certifications and accreditations a payroll provider should have to run a service in Australia.

So, if you’re getting a payroll service in the Eastern Suburbs, make sure they’re qualified enough to deal with your information.

Conclusion:

Payroll is an integral part of your business. Not managing your payroll can lead to employee dissatisfaction and a plethora of problems. So, getting a good payroll service might be the boost your business needs in the long run.

However, you shouldn’t just get any payroll service for you. You need to consider a few factors beforehand. In this article, we’ve discussed these factors o help you out. We hope you find this article helpful!

COVID-19 has negatively impacted many different industries. Some businesses have thrived through the pandemic and others have weakened. However, the pandemic has made one thing clear, your business accounting team/accounting partner / outsourced accounting firm/payroll partner is your hero at the moment. Accountants and payroll specialists are giving you support. And also knowledge on how to get through the crisis, assisting you with your cash flow, your payroll legislation, staffing challenges. And the constant threat of further lockdowns and business shutdowns. 

Even though Australian COVID-19 numbers are low, the future is still looking bleak. Borders are closed to international visitors, and consumers are watching every dollar. On the surface, we may think that things are normalising. Offices are reopening, shop floors are filling up, people are out and about. However, below the surface there is chaos. And the recovery from this COVID chaos is where accountants and payroll departments are going to work harder than ever to help your business recover to its full potential. For your business, recovering to its full potential may mean that you need to broaden your service offerings. Or just simply take a look at your current processes and revenue streams and streamline where you can.   

Recovery is going to look very different for every business. And will present new challenges for business owners, leaders and teams. Expectations are unknown until you assess the situation you are in. We are here to help you look at what you can do to start your business on its recovery plan, and how your payroll team/partner is a key function for you to focus on. 

Starting your recovery

Every business wants to be busy – and see their business growing. But there is no point being “busy” if your pipeline of work is not earning you the right profit margin, generating revenue, and raising your profit. Now that 2021 is approaching, make time to review, assess, and analyse your processes and goals of your business. A good place to start is looking at outsourcing your payroll and accounting functions to specialists that can help you analyse the data and reports you have, and assist you with ideas and strategies for the future. 

In addition, there is new technology on the market that can assist you and your business to have an efficient payroll and streamline your basic data entry, low-level bookkeeping, and business as usual financial admin. Your chosen accounting and payroll partner can also support you in using the technology to its full potential – retrieving payroll and business reports and data needed to have a full view of your business. There is a lot of value in allowing cloud solutions and applications along with your accounting and payroll partners do the heavy lifting for your business, while you and your teamwork on what you do best – client liaison. Your number one priority is to listen to your client’s challenges and feedback, finding the best possible solutions for them. 

Increase your business profitability

Every business will have different issues, threats, and opportunities by the end of 2020. There is no one size fits all strategy that will help a business achieve post-2020 recovery. As a business leader, there is a lot of work ahead of you, and you need to be aware of what is going on in the marketplace and in your team. Your teams are your front line in the recovery phase – and your leadership needs to adapt accordingly.  

To help you adapt and understand how you can start your recovery, we have outlined a few key foundational steps that can be followed to increase your business survival. Give your business a fresh start in 2021. 

1. Determine your financial health

Before you even think about what you need to do for business recovery, you need to determine your financial position, your revenue streams, your profit margins and your payroll. You also need to ensure your financial statements are up to date. It will also be helpful to determine your short-term cash flow commitments. 

2. Review your business’ mission

Once you have assessed your business revenue streams and have a clear understanding of where your profits are coming from, think about what areas of expertise you want to focus on and who your ideal clients are. The clearer you mission is, the easier is it for you and your financial advisors to strategise how you are going to grow and recover your business in 2021.  

3. Employee care

Your employees are the key to your business success. Taking care of the wellbeing of your staff is imperative for your business success. Keeping your staff engaged and informed, understanding their expectations will allow them to feel valued and supported. Involving them in business issues and ensuring that they are aware of business strain will give you a more cohesive and practical team. In addition, if you keep on top of your payroll, you guarantee that their benefits and wages are still valid. 

4. Review your customers

Our consumer behaviours and decisions are what keep businesses ticking. COVID-19 has changed the way businesses also interact with their customers. As an example, 44% of global consumers indicate they would be more likely to do grocery shopping online as a result of the pandemic. For a business to survive, it needs to understand how its customers will interact with them and adapt accordingly. 

5. Update your technology

There are so many cloud technologies that can change the face on how your deal with your accounting and payroll. Your financial data, documentation, payroll and internal practices have the possibility to be managed on one single platform. This allows you to streamline your payroll and HR processes, allowing you to access client information, financial reports and data easily and remotely.  

6. Review your processes

If there is a process that can be automated and performed more effectively through the use of software – then automate it. Some processes to look at can start from data entry, to payroll management. These things can be automated, giving you’re the freedom to access data outputs and high-level workflows. 

7. Outsource where you can

Business recovery after COVID-19 is going to be challenging. Outsourcing some aspects of your business will allow you to focus on building your business back up. Additionally, working together and partnering with outsourcing professionals can give you the support you need to get on the road to recovery. You can start small by outsourcing all your payroll function and accounting needs. Working together with tax and financial specialists ensures you get the input and guidance on where you can focus your finances to grow your profits. In addition, outsourcing your payroll function will ensure that all the legislative knowledge required to complete payroll taxes is taken care of. 

It’s going to be a tough road ahead, however, there are plenty of ways that you can ensure your business can stand out from its competitors and creates a unique business offering. By outsourcing, seeking advice, and working together with financial advisors/accountants, you can set yourself up for a successful road to recovery. Boost your confidence in your business’ road to recovery from COVID in 2021. Have a chat with us at RT Taxation accountant services for small businesses. We want you to feel confident in our financial expertise while you focus on building your business.

COVID-19 has much to answer for including for many working people changing the look of their workplaces in the short or long term as many Australian’s found themselves obliged to work from home. For many employers and employees, this was not a change that they had predicted nor one for which any forward preparation had occurred. Many employers and employees, prior to COVID-19 would have denied that their work could be effectively commenced other than in the traditional workplace.

COVID-19, however, forced workplaces to transform and to make working from home a reality. Where it was not possible, such as in retail, people were granted a leave of absence until they could return to their traditional workplaces. Faced with the gulf of work from home or do not work at all, employers and employees recovered, pivoted, and transformed in a way that no one would have predicted. Work from home became a reality.

As we move out of the worst of the COVID-19 shock and reverting to traditional workplaces is possible (subject to COVID-19 safe arrangements), many employers are now facing the challenge of resuming workplace arrangements.  These challenges come in many forms but mainly occur either where employees are opposing returning to the workplace or where employers have found the work from home arrangements advantageous and may not want to return employees to a traditional workplace.

The question, therefore, arises as to who decides if employees continue to work from home or return to the traditional workplace. This is a problematic question, but ultimately the answer is the employer. However, if an employee makes an application for workplace flexibility under the Fair Work Act, it must be assessed on its merits, including where that application is to work some or all their working hours from home. The impact of COVID-19 has made declining such valid flexibility requests more difficult; however, this does not mean that employers cannot decline such requests where there are genuine business grounds to do so.

If an employer wants their employees to return to the workplace, it is generally reasonable and lawful instruction to require employees to do that.  This is particularly the case where the employer has a COVID-19 safe plan in place for their workplace. Employees can not unreasonably refuse to return to the workplace, no matter how much they prefer working from home or believe that they are “better off” working from home. Similarly, employers are not required to allow employees to continue to work from home if that is not how they wish their business to operate.

The ACTU and its affiliated unions are currently preparing a “charter of rights” for working from home.  This will not be an enforceable “charter of rights” but will be endorsed by the Unions as the minimum arrangements that employees should accept/agree to when working from home. This may well create expectations that employers must manage. The details of this charter are not yet known. The Fair Work Commission (FWC) has prepared a discussion document regarding working from home on the assumption that at least a proportion of those employees who were required by COVID-19 to work from home, will continue working from home post-COVID-19 and this may require some changes to existing Modern Award arrangements.

Working from home, in our opinion, is not the new normal. It is however a legitimate option in the mix of workplace flexibilities for the future. The actions of the ACTU and the FWC however suggest that there is likely to be more regulation around working from home in the future. The spirit of this regulation may well determine if working from home in the future is a viable flexibility option for many workplaces. Only time will tell how this area of employment regulation develops.

If you are experiencing any challenges in returning your employees to the workplace or struggling to manage employees in a work from home arrangement, R T Accounting & Taxation Services are here to provide help. Get in contact with one of our members.

The JobMaker Hiring Credit was brought out in the recent Federal Budget with the aim of accelerating growth in the employment of younger people during the COVID-19-19 recovery. This aims to improve their economic, health, and social outcomes and reduce the scarring from long term unemployment.

From 7^th October 2020, eligible employers will be able to claim $200 a week for each additional employee they hire aged 16 to 29 years old; and $100 a week for each eligible employee aged 30 to 35 years old. New jobs created until 6^th October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created.

To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring. The JobMaker Hiring Credit will be claimed quarterly in arrears by the employer from the Australian Taxation Office (ATO) from 1st February 2021. Employers will need to report quarterly that they meet the eligibility criteria.

The Additionality Criteria

To attract the JobMaker Hiring Credit, the employee must be in an additional job created from 7^th October 2020. To demonstrate that the job is additional, specific criteria must be met. The additionality criteria require that there be an increase in:

• the business’ total employee headcount (minimum of one additional employee) from the reference date of 30 September 2020; and
• the payroll of the business for the reporting period, as compared to the three months to 30 September 2020.

The amount of the hiring credit claim cannot exceed the amount of the increase in payroll for the reporting period. Total employee headcount on 30 September 2020 and payroll in the three months to 30 September 2020 represent the baseline values for the employer. The baseline headcount will be adjusted in the second year of the program to ensure an employer can only receive the JobMaker Hiring Credit for 12 months for each additional position created.

Employer Eligibility

Employers are eligible to receive the JobMaker Hiring Credit if they:

• have an Australian Business Number (ABN)
• are up to date with tax lodgement obligations
• are registered for Pay As You Go (PAYG) withholding
• are reporting through Single Touch Payroll (STP)
• meet the additionality criteria
• are claiming in respect of an eligible employee and
• have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of.

Newly Established Businesses

Newly established businesses and businesses with no employees at the reference date of 30 September 2020 can claim the JobMaker Hiring Credit where they meet the criteria. The minimum baseline headcount is one, so employers who had no employees at 30 September 2020 or who were created after this reference date will not be eligible for the first employee hired, but will be eligible for the second and subsequent eligible hires.

If the JobMaker credit is something you feel your business is eligible for do not hesitate in getting in contact with your local Registered Tax Agent at R T Accounting & Taxation Services, and a member of our team will get in contact with you.

If there was ever a time to be a law-abiding, business conscience employer – now is the time. Who would have thought a global pandemic would have prompted such a change in our working circumstances driving a closer examination into Australia’s workplace relations framework. While Covid-19 has transformed the home into a business office, employer representatives, experts, and unions have worked together to explore solutions for wage compliance and enforcement. The active union movement and class action interest have led the Fair Work Ombudsman (FWO) to focus on the issue and ensure businesses are aware of the consequences. Not to mention the Victorian and Queensland governments have passed legislation making wage theft a criminal offense with potential imprisonment as a penalty.

Wage theft sounds deliberate – and while it is the unlawful underpayment of employees – it describes all cases of employee underpayment, whether deliberate or unintentional. In all the years we have been working as tax accountants, we have seen very few underpayment cases. However, they do occur – even when you believe you have a plan in place. Often, underpayment cases in small businesses have occurred when employers have not understood and applied the correct aware requirements, resulting in wage non-compliance. This is a classic case of non-deliberate wage theft.

In Australia, there is a complex award framework, with over 120 modern awards – each award outlining minimum award wage rate and employment standards and conditions for employees based on their industry or occupation. The Fair Work Ombudsman keeps business owners on their toes by regularly reviewing and updating rewards. In fact, the framework is so complex – that we would recommend a professional with specialist knowledge to help you navigate it. This year, as a result of Covid-19, the Job Keeper wage subsidy (a vital lifeline for businesses trying to stay afloat) has compounded additional complexity. And with the introduction of Job Keeper 2.0, there’s no wondering why small businesses are left scratching their heads in confusion. Job Keeper 2.0 introduced changes to rates and eligibility, and employers were asked to apply a two-tier wage subsidy to its workforce. See what I mean when I say – best to hire a financial professional, who is equipped with the knowledge on how to navigate the system.

While there is no single mistake that addresses wage non-compliance, here’s how you can avoid wage theft and work with confidence >>

1. Find help

It is important that the Fair Work Act is completely understood by employers and business owners. Unfortunately, as a business owner, you may not have the time or the knowledge to apprehend all the requirements set out in the Fair Work Act. Therefore, it is worthwhile to have an accountant and HR representative to assist you in navigating its complexity. Additionally, external help can also run an audit on your business to identify any issues you have within your business. 

2. Custom your payroll system

When utilizing a payroll system, businesses must not forget to ensure it is up-to-date with all the correct awards and classifications. Unfortunately, out-of-the-box payroll software is not adequate for Australia’s complex award system; therefore it requires customization and maintenance. A professional can also assist with the management of your payroll system.

3. Understand award requirements and employee classifications

Keep up-to-date with relevant awards for your industry, and ensure you are correctly classifying employees. Misinterpretation of awards can result in an investigation by the Australian Taxation Office, and incorrect employee classification can bring Fair Work Ombudsman investigations. Both awards and classification issues can lead to the underpayment of your employees.

4. Made a mistake? Fix it ASAP!

While wage compliance is at the forefront of regulators, and unions – why not work with a professional to audit your business. If you find discrepancies within your employee classification or underpayments to employees, you will need to determine the length and amount of underpayment and rectify the mistake quickly. Additionally, finding the cause of the mistake will prevent underpayment from occurring again.

Navigating payroll, wage compliance, and the Fair Work Act in 2020 is more complicated than ever. Boost your confidence in your business’ compliance requirements, and come chat with us at RT Taxation accountant services for small businesses. We are equipped to help you keep on top of all the complexities surrounding wage compliance.

If you have any questions about the accuracy of your payroll systems in eastern suburbs and remuneration practices, now is the time to reach out to R T Accounting & Taxation Services for assistance.

COVID-19 has brought several challenges that have never been faced before by Australian Small Businesses. For many organizations, making small savings, day to day, could be the difference between continued operation and having to close. In these tough COVID times, we could be forgiven for expecting leniency. However, Victoria and Queensland have now passed legislation. This not only makes it an offense to underpay employees, as has always been the case. But they have introduced the additional penalty of potential imprisonment for business owners and operators.

In our decade of experience in the industry, deliberate underpayment of wages is rare. However, as seen in the media, underpayments do occur. Sometimes, it is the complexity of the Award system which leads to issues, in other cases, it is a misunderstanding of employer obligations and occasionally it is simply a calculation error. These instances should be rectified and dealt with accordingly once identified.

However, this genuine error has been labeled as “wage theft”, and in most cases, employers are vilified when they have identified the error themselves and have commenced a process of rectification. Despite this, State Governments such as Victoria and Queensland have introduced legislation to make underpayment of wages, in some cases, a criminal offense. We have not seen whether a genuine error will avoid being captured. The question now becomes. Will we be able to convince regulators that any error was genuinely inadvertent?

The introduction of the JobKeeper wage subsidy, which has become a vital lifeline for businesses trying to stay afloat, has added to the already complex wage environment in which a large amount of businesses operates. This has only gotten more complex with the introduction of JobKeeper 2.0, where rates and eligibility criteria have changed, and employers are asked to apply a two-tier wage subsidy to its workforce.

Now is not the time for employers to take their eye off the ball regarding wage compliance. You should not think it is alright to bend the rules to save much-needed dollars. We have been surprised in recent times, the increase in clients seeking payroll audits/reviews. Given the risks of getting it incorrect continue to increase, it makes more sense for your business to provide peace of mind that your payroll processes are correct and efficient.

RT Taxation accountant services for small businesses in the eastern suburb are well equipped to undertake these reviews to ensure that your Payroll is always correct, and no short cuts have been taken. These reviews can also identify, where employers, may be able to make savings in their payroll systems. If you have any questions about the accuracy of your payroll system and remuneration practices, now is the time to reach out to R T Accounting & Taxation Services for assistance.

A few high-profile Australian payroll services scandals have rocked the business world over the last year. George Calombaris underpaid workers $7.8 million. Lush Cosmetics discovered a significant payroll error, underpaying staff since 2010. Wesfarmers uncovered $24 million in payroll errors. And ABC (yes, the iconic Free to Air television broadcasting service) admitted to underpaying casual staff over the past six years! While the issues in each company may be different. All mistakes fall under the payroll umbrella of the business process. When it comes to payroll no business can afford to make mistakes.

Payroll blunders do not only occur in large businesses where staff numbers are high, and possibly more difficult to manage. Larger companies have dedicated teams and diverse payroll software to assist in flushing out all the payroll details (and yet some BIG mistakes are still made). Who takes care of payroll administration for small businesses?. As a business owner, focusing on building your business – doing what you love, will always remain your top priority. Losing sleep, trying to wrap your head around payroll tax legislation, remembering tax deadlines, and not forgetting superannuation contributions is not what building a business should look like. Don’t let payroll make your role as a business owner taxing!

In Australia, more businesses are relying on payroll software. For paying employees and manage the entire payroll process/function. Self-managing a payroll system can keep costs down. However, the complexity of software varies in the industry. It is often limited to the number of employees within a business. In addition, there are special factors that need to be accounted for. These are often overlooked by a business owner who does not have the time or knowledge to be abreast of all payroll laws and considerations.

In addition, Australian businesses need to ensure the payroll software is considering various employee requirements. Some of these include Child Support, Flexi-Pay, Salary Sacrifice, PPL, and more. This is why it’s important for businesses to recognize the complexities involved in the payroll process. Just to ensure they pay staff accordingly.

Payroll Mistakes

So, what kind of mistakes do businesses (large or small – this applies to all companies) make when it comes to payroll.

   1. Mis-handling data

Collecting the correct data, and ensuring data entry is precise is very important for an efficient payroll process. When collating information about employees, businesses are required to correctly classify employees to withhold the right amount of taxes. Payroll data includes employee tax file numbers, personal details, and payment information.

A simple way to minimize data entry blunders is to allow new hires to collate their own personal information into their payroll profile. Which involve them in the proofing process where employees can cross-check their profile. To ensure all details are correct.

   2. Not adhering to payroll deadlines

Believe it or not, employees are often faced with reminding their employer to correctly pay their benefits. Also superannuation and salary correctly and on time. According to a 2019 HRM “, 23% of organizations with 1-10 employees admit to making late payments to staff”. And “22% of these ‘micro-businesses’ admit to making late superannuation payments”.

Deadlines do not end with employee payroll. You can’t forget your monthly payroll tax liability lodged quarterly. Late payments may cause a penalty. So it’s important to follow regulations and complete payments on time!

And to make matters more complicated, the Australian Tax Office introduced the Job Keeper payments. Which has to change rates and wage condition amounts businesses need to adhere to. With so many deadlines and commitments that are tied to payroll. Any wonder why business owners find it taxing to manage it themselves!

   3. Forgetting the important bits

Just like data entry, the payroll process needs good attention to detail. There are so many different aspects of the entire process that can be overlooked quite easily. For example, Misclassifying employees. This simple mistake will lead to the incorrect application of award with overtime. Incorrectly understanding the award rate with overtime is a common mistake made by small businesses.

Don’t forget the superannuation contributions. Did you know that you can accidentally overpay an employee’s superannuation if they do overtime?. When it comes to superannuation contributions Small business directors are not always aware of the specifics.

And there is so much more to payroll than just employee taxable wages and superannuation contributions. Businesses need to specify contractor, apprentice, and trainee payments, document employee fringe benefits. And also employee allowances, include the director’s remuneration and manage employee sick leave. Fair Work states that a single employee is entitled to 10 days of sick leave per year calculated. As 1/26 of an employee’s ordinary hours of work in a year (I’ll leave that to your accountant to go over the finer details).

And lastly – what many would say, most importantly – the Fair Work Information Statement (FWIS). I’ll start with saying, you could receive a fine of up to $62,000. If you fail to provide your employees with a Fair Work Information Statement. 

Overlooking reporting

Payroll audit is unpleasant for any business, regardless if you’re running a large multinational organization or a small 20 employee company. In the case that your business is to be audited, you’re accurately kept business and payroll records will allow you to breeze through the audit with flying colors. This is a testament to why it is important to report every month and reconcile any issues. There may be some sort of human error. But going over your payroll records (and not forgetting to include all those important bits in point 3) will allow your business to continually improve accuracy. Always better to show you have self-corrected any mistakes along the way rather than being caught out trying to hide them further down the track.

Ever-changing Tax Law

Yes, the Tax Laws change frequently, and business owners need to keep up with variations made. It can be difficult for those small business owners who are focusing on actually building their business. To stay on top of law changes dictated by the Australian Taxation Office.

There you have it… There is so much to learn when it comes to payroll services in eastern suburbs. Staying on top of every little detail and law is tough. But it’s critical for your business to do so, to run smoothly and avoid payroll mistakes. The best way to take the “taxing” feeling out of payroll is to get in contact with our Accountants at R T Taxation & Accounting Services. You can take advantage of our Outsourced CFO Services to leave the administrative hassle of running your small business to the experts and for you to do what you know best.

Full time and part time workers will be treated differently.

• From 1st October 2020, JobKeeper will run with two tiers of payments. One for people who were full-time employees pre COVID-19 and a lower tier for part-time employees.