Avoiding Payroll Mistakes
Payroll mistakes can be expensive to small business. Follow these tips to help you avoid making these mistakes that will cost you time when paying your employees:
- Check your employee details for accuracy and completeness: it is important that you have all of their personal details relating to their employment:
- Tax file number
- Full name
- Start date (and end date where applicable)
- Date of birth (if you have junior employees – keep a list of their birthdates handy so you don’t miss a pay raise as they reach a new birthday!)
- Current address
- Pay details (rate, allowances, classification)
- Take the time to set up your payroll and employee accounts properly: Making sure all of the information in Tip 1 above is accurately entered in for all of your employees will help you process their payroll quickly and correctly. It will save you time in the long run, and allow you to get back to running your business quicker.
- Reporting and reconciling to improve accuracy: your requirements for reporting will depend on the size and type of your business. However, regular reconciliations will assist you to keep your payroll files accurate and complete. Use your software reports to compare your payroll reports with your general ledger wages account to make sure they reconcile. The PAYGW that you will lodge in your monthly/quarterly BAS returns needs to reconcile with your payroll reports. All of these actions will help you stay on track with your payroll obligations and make sure you know where your wages and salaries expense is at.
- Keep up to date with payroll tax changes: Tax rates change every year. From July 1, you need to ensure you are working with the current tax rates. As long as you are working with a current, live subscription (not desktop) your file will be automatically updated with the correct rates.
- Don’t miss the payroll deadlines: It is critical that you meet your payroll obligations with the ATO. These may include PAYG withholding, Payment Summaries at the end of the financial year and reporting Superannuation payments.
If you have any questions, please do not hesitate to contact the Team at The Money Edge on 07 4151 8898