Payroll is vital though and having the right system in place to manage it will not only save you from headaches but save your business money! If you’re lucky, a payroll system comes packaged with your accounting software or perhaps your staff management system. Some prefer to calculate it manually in a spreadsheet whilst others outsource payroll to their accountant or bookkeeper.
In as much as we like downplay it, payroll can sometimes be rather complicated.
Beyond the need to setup new employee on your payroll system, there are a number of compliance issues to manage. You have to pay employees regularly and of course in accordance to law, the correct award, applying any overtime or penalties if applicable. Here are a few items which might be included in payroll that you need to take note of.
Payments to your staff – Dates and amounts must always be recorded
Payment types – are they salaried or on hourly rates? Add in bonuses and commissions, any overtime or penalties applicable
Taxation – Ensure compliance to ATO rules on taxes collected on behalf of your employees
Reporting – Meet key Government reporting dates for employees’ pay and deductions
Leave entitlement – Record holidays taken by your staff, plus any carry-over to the following year
Sickness tracking – Note of all staff sick days
Maternity and paternity payments – Must have good understand on the law and regulations governing these area
Superannuation – Ensure proper record keeping for the amounts paid in by you and your employees
Expenses payments – What they were for, and how and when they were reimbursed
Benefits and perks – For proper tax compliance, these must be accounted for
Yes, that much.
Considerations in choosing a payroll system
Here we list what you need to consider when choosing your payroll system.
How much will it cost you?
It’s important to take note of the overall cost and not just the start-up cost. Some systems require updates and maintenance and these may be paid separate from cost of using the system. Others are free of updates or other charges and this is where you can potential save a lot of money.
Is it easy to use?
The payroll system you choose should be user friendly and easy to understand. If not, it can add up to the total cost of doing payroll by being inefficient and time consuming. The more time spent doing payroll, the more money you pay your payroll processor too.
Is it compliant to the law?
A very important consideration. There are lot of employee remuneration disputes and your system can’t be the one letting you down here. If it’s compliant and self-updating, then you can be assure you minimise the risks for errors.
Payroll concerns not only your money but the money of your staff as well. They work to earn a living so it’s your responsibility that the system you use is lawfully compliant and accurate.
Xero has integrated payroll modules and can be boosted by third-party applications. It’s accurate, easy to manage, secured and easily accessible wherever you are. Best of all, staff have their own login so can access their own payslips and documents and apply for their leave online.
If you want to know more, contact the Evolve Online Bookkeeping team today on (07) 5413 9393.