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Setting up your first payroll system

A Guide to Efficient Payroll and Compliance

In the dynamic landscape of modern business, ensuring the ethical treatment of employees is not only a moral imperative but also a strategic decision that contributes to long-term success. As you consider optimising your payroll and compliance processes, it’s essential to recognise that treating your employees fairly and transparently not only enhances your company’s reputation but also fosters a motivated and engaged workforce. This article will not only guide you through setting up efficient systems.

Real or perceived poor treatment of employees can have a devastating affect on businesses from mass staff walk outs, customer boycotts and legal action. A quick preview of Fair Work’s latest activity is enough to convince most. Getting the systems and processes right will avoid most of this.

Streamlining Payroll and Compliance Processes: Your Guide to Efficient Business Operations

Running a business involves multiple processes and responsibilities, and one crucial aspect is managing your employees’ payroll and ensuring compliance with various regulations. However, you might be relieved to know that there are efficient systems and strategies that can help you smoothly navigate through these tasks. If you’re not currently employing anyone or need to optimise your existing systems, here’s how we can assist you:

How to setup a Payroll System

Are you looking for a seamless payroll solution that will save you time and ensure accuracy? We’ve got you covered. Our team can set up a payroll system for you, integrating it with the Australian Taxation Office (ATO) for a hassle-free experience. Plus, we’ll help you add your first employee to the system, ensuring everything is configured correctly.

Most good systems now have a time tracking application and superannuation portal built in.

We work with a few different payroll systems. They are not all the same and vary greatly from ease of use and complexity. We focus on payroll systems for 1 to 250 employees.

For a cost-effective starter solution, consider our standalone payroll system option. Subscriptions typically start at around $10 per month. We can also provide expert advice on choosing the right system for your needs.

We can help you establish your next payroll system.

 Tracking Superannuation Contributions

Superannuation compliance is vital for both your business and your employees’ financial well-being. Our services include tracking and lodging super contributions to an approved portal on a quarterly basis, ensuring you meet your obligations as an employer. Starting from $70 plus GST, you can enjoy peace of mind knowing that your super contributions are being managed efficiently.

Efficient Payroll Processing

Simplify your payroll processing with our cost-effective options. We can process weekly wages for one employee for just $60 plus GST per pay run, or if you prefer a fortnightly schedule, it’s only $70 plus GST per pay run. With our streamlined approach, you can focus on your core business activities while we handle the payroll intricacies.

Portable long service leave for the building and construction industry

These are state based laws and agencies. In WA it is MyLeave and similar entities exist in other states. MyLeave collects, manages and pays long service leave to employees in the building and construction industry in WA.

Navigating the intricacies of the LSL applications can be time-consuming. Our team is here to assist you with the application and processing, ensuring your long service leave payments are managed seamlessly.

  • WA – https://www.myleave.wa.gov.au/
  • QLD – https://www.qleave.qld.gov.au/
  • SA – https://www.portableleave.org.au/
  • NT – https://ntbuild.com.au/
  • NSW – https://www.longservice.nsw.gov.au/bci
  • Vic – https://leaveplus.com.au/ (aka Coinvest)
  • Tas – https://tasbuild.com.au/

Key Steps for Payroll and Compliance Success

1. Identifying and interpreting awards

State awards are used for sole traders, partnerships of individuals, trusts with an individual Trustee and state registered incorporated entities such as incorporated (Inc) sporting clubs and Co-operatives.

Federal awards are applied for companies, corporate partnerships and trusts with a company Trustee.

The most appropriate awards based on your industry and the role of the employee must be used. If there is no applicable award then the minimum conditions are applied.

In addition to the awards, you may choose to add contractual agreements which may add to or modify conditions. Legal advise is recommended in this area.

2. Choosing the Right Payroll System

It’s mandatory to report to wages to the ATO through a Single Touch Payroll (STP) compliant payroll system. If your accounting system is linked to one, that’s an good starting point but other systems may be better suited to your activities.

3. Maintain Accurate Timekeeping Records

Keep accurate records of employee time, and payroll calculations in paper or electronic format. These records are crucial evidence in case of legal disputes.

All payroll records are required to be kept for at least seven years.

4. Selecting Pay Frequency

Choose whether you’ll pay your employees on a weekly, fortnightly, or monthly basis. 

More frequent processing will have higher time and costs involved but may be better suited if employees are casuals or not on high  incomes. 

Involving employees in decision making will improve acceptance.

5. ATO Requirements

When you start to pay wages, register your business for Pay As You Go Withholding Tax (PAYG W) and ensure your employees complete the Tax File Number Declarations when they start or change any details.

Pay roll systems are required to be linked to the ATO for Single Touch Payroll (STP) reporting.

PAYG W is withheld from gross wages and paid to the ATO through Instalment Activity Statements (IAS) and Business Activity Statements (BAS). This is calculated by the payroll system.

Unpaid PAYG W debts, where collection activities have commenced, can result in Director Penalty Notices being issued by the ATO. This makes the controllers of the business personally liable for unpaid PAYG W.

6. Superannuation Compliance

Employees need to complete a Super Guarantee Choice form to notify you of their super fund preferences. Make sure to pay super contributions quarterly and within 28 days after each quarter’s end.

If employees don’t provide super fund details, follow ATO guidelines for fund selection via a stapled fund and then an employer default fund. 

Late paid super is not deductible for income tax and attracts penalties.

From 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages.

7. Long Service Leave (LSL) Obligations

LSL is payable after an employee works 10 years of employment or after 7 years if their employment ends and the obligations are normally transferred to the new business owners when businesses are sold.

If your business operates in the building and construction industry, portable LSL payments are required to be paid the state body on a regular basis.

8. Payroll Tax

Payroll tax is a state based tax on on the value of wages. If the business meets the payment thresholds, payroll tax lodgements have to be made in each state and territory wages are paid.

$1m per year in wages and benefits to employees is the threshold in WA for 2023 financial year.

Stay on Top of Your Obligations – minimise payroll admin time and minimise costs

Remember, failing to meet various lodgement and payment deadlines can result in penalties and additional reporting. 

By efficiently managing your payroll and compliance processes, you can ensure a smooth and productive business operation.

Common cases of penalties arise from under or late paying employees, misinterpretation of an award and inadequate processes such as poor time keeping records.

Let Us Help You

Whether you’re setting up a new system or looking to optimise your current processes, we’re here to assist you every step of the way.

Reach out to us to discuss your specific needs and how we can work together to streamline your payroll and compliance operations. Your success is our priority. 

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