Payroll can be such a large, complex minefield to navigate through.
The following information may assist you, as the business owner when employing and paying staff. Please note that this is by no means a full comprehensive list and further advice should always be sought if you are unsure of anything.
Hiring of Employees
The following items should be provided to new employees as a minimum as part of a employment pack:
- Employment Contract and Award, if applicable
- New Employee Form (this will include personal details such as name, DOB, address, contact details, bank etc)
- ATO TFN Declaration
- Super Choice Form
- Fairwork Statement (Fairwork provides a significant amount of information www.fairwork.gov.au)
Setting up of Payroll
This step is crucial before processing any payroll information. Information can be entered based of the details provided by the new employee from the employment pack. Ensure that leave provisions have been setup correctly based on an employee’s employment (i.e. casuals don’t have annual and sick leave entitlements).
The TFN Declaration needs to be sent to the ATO.
Processing of Payroll
Ensure you are familiar with any awards or agreements your employees are on to ensure all relevant pay items are accounted for. It is always handy to have a checklist.
Timesheets (if applicable) should be completed and signed off by a manager. Any leave forms should be approved and entered accordingly.
Always keep a copy of the pay run reports with timesheets/leave forms or other paperwork relevant for each pay run and file accordingly.
Payslips need to be issued to employees within 1 working day of payday.
Other Statutory & Lodgement Requirements
If you have a business and employ staff it is compulsory to have insurance in place with regards to workplace accidents. In Qld, this is called WorkCover and further details can be found at www.worksafe.qld.gov.au
Payroll tax is a self-assessed State & Territory tax imposed on business’ who pay wages after it exceeds a certain threshold amount. This varies from State to State, in Qld the threshold is $1.1M annually. Further details can be found at www.payrolltax.gov.au
The statutory amount for employer superannuation guarantee is currently 9.5%. It is a requirement that super is paid via a clearing house facility and is due on the 28th day following the end of each quarter (the superfund must have received the contribution by this date.
PAYGW is the tax withheld from employee’s wages. Depending on whether you are classified as a large business payer will depend on when it is due to the Australian Taxation Office. Large business payers are due monthly by the 21st day of the following month. All other payers are due with the quarterly Activity Statement.
Preparing Year End Reports and Reconciliations
Annual PAYG Payment Summaries are due to employees by 14 July of every year and to the ATO by 14 August. It is important that actual wages paid via payroll is reconciled back to what is showing as paid in the financial accounts and what has been lodged to the ATO by way of Activity Statements.
Superannuation should also be reconciled back to what is showing as paid in the financial accounts and via the clearing house.
Do you have a specific question regarding payroll? Do you require someone who will look after the payroll for you? Contact us at Mybookworks!