Top 10 tips for payroll best practice
10th August, 2017
Payroll can be perplexing, and it’s easy to be caught out. But here are 10 tips you can use to give yourself the best possible shot at getting it right.
1. Every employee must have a written employment agreement. Make sure each is set up on the correct type of agreement – are they permanent (full or part timers), fixed term (full or part timers), seasonal or casuals? Are casuals really casuals or part-time employees with a clear work pattern?
2. Review agreement terms and conditions to make sure they meet the latest requirements i.e. agreed hours and reasonable notice for shift cancellations, restrictions on secondary employment and deductions from employee’s wages.
3. Update original or provide any variation of employment in writing (letter or email) to the employee. Ensure reasonable time is provided for review, discussion and agreement by both parties.
READ: Reducing payroll stress
4. Check sick leave entitlements for any part time staff. Are they correct? Review casual employee hours for the previous six months. Do they qualify for sick leave?
5. Check average daily pay vs relevant daily pay calculations. Which is being used and in what circumstances?
6. Are all eligible payments being included in Ordinary Weekly Pay and/or Average Weekly Earnings, e.g. back-pay, overtime, bonuses?
7. Are leave entitlements set up correctly?
8. What does a working “week” look like for each of your employees? Has it changed?
9. Make sure you have a record-keeping system that accurately calculates, tracks and stores hours worked for each day in a pay period. Time and wage records are required to be produced on demand if audited by the Labour Inspectorate.
10. Set a reminder to review employee files regularly to ensure all conditions of employment are current and documented. Share changes with finance, HR, operations and payroll.