Today I’m going to run you through some payroll mistakes with your employees that could land you in some really hot water if you don’t do them or if you get them wrong. Even if you don’t yet have employees, don’t skip this one because some of it might still apply, or it will make you aware of the mistakes before you make them.
First up – you can’t do payroll manually. It must be in online software and you must report every payment via Single Touch Payroll (STP). We discuss how, even though this has been around for a few years now, not everyone knows about these requirements.
Another payroll mistake you don’t want to make is paying someone as a contractor, when they should be an employee. There are a few reasons why this is a really important thing to be doing correctly.
Superannuation payments are one of the most important things to be getting correct and we run through how frequently you need to be paying your employee’s super and what you need to do if you don’t lodge the payments on time.
Also – not paying your employees the right amount and not having a contract in place (including listing the relevant award) is another really important item on the checklist. It’s illegal to underpay, and this one carries jail time if the offence is serious enough (it’s called wage theft).
Finally we run through the fact that you can’t make any deductions that aren’t required by law without permission in writing from your employee.
Payroll is pretty technical with lots to learn and do. Not even all bookkeepers do payroll – it’s a specialised area. We do payroll here at Accounted for You and we love it. So, if you’re ready to take the next step and put on an employee, make sure you have all your processes spot on and if not, outsource your books.
Employees are part of my digital course Power in Numbers
Australian Taxation Office: How to work it out: employee or contractor
My blog article: Employees & Contractors – what’s the difference?
TM Solicitor blog post: Engaging an Independent Contractor: What the High Court has to say
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