For many business owners however, payday can be a nightmare!
Before payments can be processed, there are countless payroll processes that need to be followed to make this happen.
These processes should be as efficient as possible - you don’t want to keep your employees waiting for their well-earned pay slips!
To make your payroll seamless and accurate, Maximum Business Solutions looks into the most important tips that every small and medium-sized business should remember when it comes to payroll.
1. Accurate dataPayroll disputes are never fun for employers or employees.
Nobody likes finding out they’ve been shorted, and emotions can run high when payroll is involved.
So it should go without saying that all data and information related to an employee’s payroll should be accurate and free from errors!
One way you can ensure your payroll information is accurate is to use bookkeeping software like Xero and MYOB instead of Microsoft Excel... or worse, doing everything by hand.
Plugging numbers into a spreadsheet is mind-numbing work (not to mention, it’s much more likely that you will make unidentifiable errors.)
It’s also important to keep employee information updated with changes in an employee’s profile in the duration of their employment with the company.
Make sure you correctly have the following details and more from your employee:
- Tax file number
- Personal information (includes full name, address, date of birth, etc.)
- Pay details (includes employment period, hourly, weekly or monthly rate, gross wage, allowances, etc.)
- Bonuses and raises
- Employment status (part-time, full-time, contract - each come with their own rates and benefits)
- Start date of employment
2. Keep up-to-date with tax changesIt’s time to talk tax.
We know, you’d be hard-pressed to find someone who gets excited over payroll tax (outside of our office, at least). We’ll try our best to make this one quick!
In Australia, tax rates are often in flux - every year, the government can decide to increase, decrease or introduce completely new taxes. We recommend everybody, business owners or otherwise, make efforts to stay on top of proposed business tax changes.
And if your business operates across state lines, you’ll also have to contend with different payroll tax rates and thresholds for your staff in other states or territories.
Payroll tax is the exclusive domain of state and territory governments.
You’ll need to make sure that your system accounts for the different requirements in each state. It also pays to ensure that changes to tax rates are reflected in your employee’s payroll by the beginning of every new financial year (1st July).
If you need more information about the country’s payroll rates, you can check out the Australian Revenue Offices’ Payroll Tax website.
3. Paying the right payroll taxesAccounting for the right payroll tax is one things. Getting the numbers right is a whole other story - and a very important one, at that!
As an employer, you have the responsibility to do pay the correct amount of payroll tax to the Victorian government.
Regardless of your approved schedule for lodging your periodic returns, you need to ensure that these payments are accurate and paid on time. If not, you might be putting yourself in a situation wherein you have to pay penalties and Unpaid Tax Interest (UTI).
And as part of your duties as an employer, you must keep the following in mind:
- If you need to withhold taxes from your employees, you first need to register for Pay As You Go (PAYG) withholding
- Ensure your calculations are accurate and that the amount to be withheld from payments is calculated and reported correctly
- Remit the withheld amounts to the ATO or the Australian Taxation Office (ATO)
- Keep track and record the amounts in your quarterly BAS (business activity statement) and annual tax return
4. Choose the right payroll solutionsBookkeeping has come a long way since the days of paper ledgers and hand calculators.
For many smaller businesses however, their payroll is still stuck in the last century, with many relying on Excel spreadsheets for everything bookkeeping-related.
Fortunately, there’s a better way!
Bookkeeping software can make all aspects of your finances - payroll management included - a breeze.
We help with implementing and training you and your staff to make the most of your new systems.
Alternatively, we can look after payroll for you!
Regardless of the type of business you are in and its size, we can provide you with effective payroll solutions so you can focus on other, more important aspects of your business.
Payroll doesn’t have to be a headache anymore
Contact Maximum Business Solutions’ Melbourne bookkeepers!Are you looking for tips on how to handle your business’ payroll? Perhaps you want to take the hassle of payroll off your hands so you can focus on other sides of your business.
Whatever the motivation, we are committed to providing effective, high-quality payroll solutions and management services to small and medium businesses all over Melbourne.
When you partner with us, we will make sure that:
- Your accounts are up-to-date, complying with state payroll laws and national wage regulations
- All payroll related matters including paychecks, superannuation, etc. are accurately assessed and measured
- Payroll and any other bookkeeping issues are promptly addressed and resolved