One of the most crucial aspects of running a business is payroll. However, managing everything can be a little challenging for a lot of employers, particularly while in the middle of growing and expanding their business.
Payroll is an essential element of the business process, and employees cannot afford to commit blunders on this. Follow these important tips to avoid making payroll mistakes:
1. Make sure all employee details are correct.
Here are some employees details that you have to make sure are current and correct:
- Tax file number
- Full name
- Employment start date, or termination date
- Date of birth
- Present address
- Pay information including gross salary, allowances, hourly rate and period of employment
2. Review your reporting process.
Each state has different reporting requirements. Payroll tax, in general, is paid monthly. A monthly payroll tax form is required to be completed by the employer and filed with the state tax office.
An Annual Reconciliation Form must also be completed and lodged with the state annually. It must include the yearly taxable salaries and premiums received by the employee during the year. Employers can work out their tax amount, whether they still owe or if they are due a refund. If they have employees in multiple states, they must fill up Annual Reconciliation Form in those states.
You can prevent mistakes by reviewing these rules and processes.
3. Be updated with changes in payroll tax rules.
You can’t do your payroll and then just forget about it afterwards. Every year, tax rates vary, and so ensure that you are compliant with up to date tax rates from 1 July.
4. Don’t ignore payroll requirement deadlines.
You have to know when your deadlines are because you can’t afford to miss them. Three deadlines are important for you to remember:
- PAYG withholding – This is the tax employers deduct from monies given to employees.
- Payment summaries – The abridged details of the wages given to each employee over the year,
- Superannuation reporting – Paying and reporting super payments have multiple deadlines. Don’t forget these dates and make sure you are up to date with the government’s SuperStream system for super contributions.
If you find doing payroll for your business a struggle, hire a good accountant. This prevents costly payroll mistakes and ensures you are compliant with constant tax rate changes.
If you want a business partner that will help you with your business, then you. Here are some of the services we offer: Tax planning and compliance, Accounting and other booking services, and Bookkeeping. Contact PJS Accountants for enquiries.