Payroll mistakes can be costly to small businesses, so to help you avoid this pain here are a few tips and tricks for business owners to be aware of.
Payroll, often conducted by a payroll specialist, ensures that every employee is paid accurately and on time.
But what level of experience is needed to conduct payroll?
With a growing number of businesses adopting payroll software, it’s sometime the business owner themselves who make the pay runs.
Having said this, some business owners can be overwhelmed by the responsibilities that come with payroll and look to hiring a payroll specialist.
Among businesses hiring for a payroll specialist, 67 percent of job listings say that applicants are either required or preferred to have prior experience with specific payroll systems.
The results from this research also shows that businesses prefer candidates have experience with payroll software as part of an integrated suite over a best-of-breed payroll solution.
Pays can be made on a weekly, fortnightly or monthly basis, by simply calculating employee wages, withholding the correct amount of taxes and issuing their pay.
The ATO defines PAYG withholding as a system that collects tax from the payments made to employees including contractors and businesses who haven’t quoted their ABN.
Payroll tax is a state based tax calculated on wages paid or payable by employers.
Employers with an expected payroll above $550,000 per year should check registration requirements and payroll tax rates in their state.
If payments are made subject to withholding, business owners must:
Ensure the below details are up to date for employees:
Annual reconciliations forms are required to be completed and submitted with the state every year, reporting the annual taxable wages and premiums paid over the year.
The Annual Reconciliation Form will help determine the tax amount.
Tax rates change every year. From 1 July, ensure tax rates are updated in the pays.
Accounting system providers will provide tax tables which must be loaded into your accounting software before you start processing payroll for the new financial year commencing 1 July.
MYOB Essentials is updated automatically every time there’s a tax change to keep you up to date with the tax office.
Take the time to set up your payroll as it will help you run your business smoothly.
By choosing MYOB, your time will be freed up so you can focus on other aspects of your business that you love.
The information provided here is of a general nature for Australians and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary.