Payroll is a complex and time-consuming process. Whether you have one or hundreds of employees, outsourcing it to the best payroll companies Sydney can save your business time and resources.
Aside from managing salary figures, disbursement and compliance, processing payroll involves statutory obligations like PF, ESI and TDS. Failure to do so can result in penalties.
Australian Payroll system
The Australian Payroll system is used to calculate payroll tax based on the hours worked and income generated by each employee. Each state and territory has different thresholds, tax rates, exemptions and remittance schedules.
Businesses in Australia need to register for payroll tax with each state and territory individually. This means employers must ensure they understand the thresholds, rates and exemptions.
Depending on the state and territory you operate in, there may be weekly, monthly or yearly thresholds that need to be met. This can be difficult to keep track of if you are a business with multiple offices across the country.
Single Touch Payroll was introduced in 2018 to streamline the reporting process for larger businesses with more than 20 employees. From July 1st, all Australian businesses will need to use this feature in order to report their employee payments to the ATO.
Workers compensation
If you have been injured at work, you may be entitled to claim workers compensation benefits. These include medical care and lost wages.
In addition, you may be able to claim a lump sum payout for your injury. This is usually a percentage of your total damages.
The amount of this payment depends on how severely your injuries have affected you. It is important to seek legal advice before making a claim.
Generally, workers are eligible to receive two-thirds of their average weekly wage (up to a maximum rate per week). This benefit is also available to survivors who lose their lives as a result of a workplace injury.
The Workers’ Compensation Commission encourages injured workers to return to work as quickly as possible with the help of case managers and workplace rehabilitation providers. However, this can be a difficult process for some employers and injured employees.
Payroll tax
Payroll tax is a type of income tax that is charged to employers by their government. It is used to fund social security and medical benefits for employees. It is a tax that is levied on remuneration (such as salary, bonus, superannuation, allowances, director’s fees and fringe benefits) payable by an employer to an employee for services provided.
The government requires employers to deduct payroll taxes before distributing salary or wages to their employees. These include social security or medicare taxes, unemployment insurance taxes, and withholdings from employees’ gross wages for other employment-related expenses, such as student loan repayments or child support payments.
Some states also collect additional payroll taxes based on the Zip code, county or municipality where the business is located. These can help pay for local projects that support business and production, such as transit or workforce development.
Payroll software
Payroll software is a solution used by businesses to automate processes relevant to employee payments. It eliminates time-consuming payroll tasks, reduces pay errors, and ensures that employees are paid on time.
The right software can also help companies keep track of their workers’ time and attendance, calculate wages, deduct taxes, and file government employment tax forms. Reliable payroll solutions update when tax laws change and alert employers when it’s time to file.
HRs should choose payroll systems that are easy to use and provide a simple interface accessible from all devices. This way, employees can access information from anywhere and HR staff can manage payroll from a central location.
The best systems are cloud-based and secure, providing a consistent user experience across all platforms. They also have artificial intelligence built in to anticipate common processes and eliminate errors. Moreover, they can automate common processes like onboarding new employees.
