Small businesses will have a much less workload to manage when it comes to payroll however payroll service is still a major responsibility. Payroll can be complicated and expensive regardless of the size of your business and so it needs to be well managed. There are several things to consider for payroll whether they directly affect the employee, your business of the legal side for the government.
- Payroll tax – Payroll tax is required to be paid by law and it is a percentage tax of certain types of remuneration items which are over a certain threshold. The tax rates are different for each state. Using a payroll service such as payrollserviceaustralia.com.au can help an employer when it comes to the challenging tax deductions for employees. A business should always ensure that they are taxing their employees correctly because errors can lead to extremely unpleasant circumstances for the business. There are many accounting software available that can assist small businesses with correct taxing even though many of them do not give consideration to unusual payments such as commissions or bonuses. The fines that accompany failing to meet tax requirements are usually heft and would cause a company great loss.
- Compliance with worker’s compensation insurance –payroll service Australia requires that there is a compensation insurance policy in place for employees.
Challenges Applicable to the Employer
- Awards – this is what specifies the minimum hourly rate in Australia and they fall into either an occupation Award or an industry Award. As it relates to payroll service in Australia Awards also specify conditions such as frequency of payment (monthly, fortnightly or weekly), overtime, allowances and termination. Fair Work Australia is a good way to help small businesses to find out which Award their staff falls under.
- Record keeping & pay slips –it is stipulated that employers have to keep some payroll records for 7 years. The records need to be kept in complete privacy and security.All businesses whether large or small also need to provide an employee with a payslip.
- Superannuation earnings –this refers to ordinary time earnings and not just gross wages/salary but extras as well (such as commission, bonuses, loadings and allowances). Small businesses need to ensure that they are paying superannuation on time so that there are not any legal penalties.
General Challenges of Payroll
Once a business employs workers, having a payroll service is important. Employers and employees need to enter into a written agreement and employers need to ensure that all the requirements are met especially the legal ones.Some small businesses may fell a little overwhelmed with all the elements tied into payroll. Payroll handling is a very complicated method as there are so many elements of it. See more here!
There are numerous challenges which apply to payroll service whether in small or large businesses. It is the responsibility of the business owner to find out all the elements that need to be in place for a payroll service.Verbal agreements are not enough as it relates to payroll for businesses not matter how small the business is.