Payroll, FairWork and Single Touch Payroll (STP) explained

Managing payroll and maintaining employment compliance in Australia is a complex task. Finding and hiring the perfect employee is just the start. Business owners need to consider a number of key questions and implement a robust, compliant and easy to use payroll system.

Payroll checklist

The Australian Government have kindly created a Hiring employees checklist, which will help walk you through the steps from start to finish, with specifics on payroll, tax and super. In addition to this checklist, there are several critical points you should consider:

1. What will be the terms of your staff’s employment: full-time, part-time permanent, casual, seasonal or contract?
   • Each of these options have different statutory requirements, which affect your decision on the most appropriate employment mode. Australia has complex employment laws and conditions that apply to all workers.
2. Is the employee legally entitled to work in Australia?
   • What is their status, are they; Australian citizens, permanent residents, sponsored workers, temporary or short-stay workers and do they have the necessary entitlement or visa in place?
3. What rights do your employees have concerning unfair dismissal, anti-discrimination, sexual harassment and anti-bullying?
4. How do you know if you are paying your staff the right amount and the correct entitlements?
5. Did you know that a standard working week for a full-time staff member is 38 hours per week?
   • Under the Fair Work Act 2009, employees have a legal right to refuse to work more than 38 hours per week if their refusal is ‘reasonable in the circumstances’.
6. What are your employer obligations for workplace health and safety?
   • The Work, Health and Safety Act 2011 provides a national framework to protect the health and safety of Australian workers.
7. What payroll records do I need to keep, and how do I calculate payroll for my employees?
   • Did you know that employers have to keep employee payroll information for a minimum of 7 years?
   • Recording and calculating staff wages are most accurately and efficiently done using compliant payroll software. Using a certified payroll software system, such as Xero, MYOB, Quickbooks, CloudPayroll or Employment Hero, will ensure your payroll records are always secure. Your PAYGW, SCG, leave and allowances are recorded and calculated according to ATO requirements, including STP lodgement features.
   • So that is a lot of acronyms. What do they mean?
     • What is PAYGW, and how do you register for it? PAYGW (Pay as you go withholding) is the tax you withhold from your employees’ wages and remit to the ATO on their behalf. If you employ staff, you must register for PAYGW with the ATO.
     • What is SGC, and what is the current rate? SGC (Super Guarantee Contribution) is an employer’s compulsory contribution to their employee’s super fund. The current rate of SGC is 10% of gross wages; however, it is due to increase from 1st July 2022 to 10.5%.
     • What is STP (Single Touch Payroll)? STP is the method of sending employee payroll information from your STP enabled payroll software directly to the ATO. Effective from 1^st July 2021, all businesses who employ staff are required to lodge STP information from their payroll software to the ATO. STP Phase 2 is due to be rolled out from 1^st January 2022.
8. Do I need to take out workers’ compensation insurance?
   • Taking out Workers Compensation insurance is compulsory for all business enterprises that employ staff. Each state in Australia has its own Workers Compensation scheme.

Outsourcing payroll services

Employment contracts cannot provide for less than the legal minimum set out in the National Employment Standards (NES), relevant award or enterprise agreement. The FairWork Ombudsman administers employment awards and conditions. Their website is a fountain of information on all things related to employing staff.

Having a compliant and easy to use payroll system in place and payroll expert to manage your payroll is a big piece of the puzzle when employing staff. Numble can pull all your payroll pieces together to create and manage a cost-effective, reliable and compliant payroll system for your business.

Did you know that a survey run by the Australian Payroll Association found the average outsourced cost per employee payslip (for businesses with less than 50 employees) was $17.72, compared to $151.57 for managing payroll in-house? What an incredible efficiency! It shows how using a highly trained BAS Agent, along with efficient software, will save you money and time AND mitigate the risk of getting it wrong!

Payroll management services

Numble is an expert on all things payroll. We offer affordable payroll services, including Single Touch payroll and IAS lodgements. Our services include advanced payroll services, including Xero Single Touch payroll. We have a trained team of experienced and qualified BAS Agents who have the skills needed to recommend, create, administer and manage your perfect payroll system—leaving you free to focus on the bigger picture, your business success.

If you need help navigating, setting up or running your payroll system, reach out to us at numble. We would be happy to have an obligation-free conversation and help you create an accurate, efficient and compliant payroll system.