Payroll – What You Wish You’d Known

Dianne KennedyAccounting, Blog

Let’s face it – sometimes you just don’t know what you don’t know. You would think that employing staff would be a simple thing, but often times no.

In my work as an accountant who also does bookkeeping and payroll for my full-service clients, I often find that my new clients are not paying their staff correctly. This is generally because they don’t know what they are supposed to be paying and/or have not had the correct advice from their previous bookkeeper/accountant. So, here’s a few things you should be doing:

  • Prepare a contract for all your employees which includes a job description. The contract includes their start date, their hours of work, their rate of pay and when it will be paid, among other things. Let me know if you need a template for an employment contract
  • Pay your staff at the award There are many jobs in industries that are covered by an Award, including Hair & Beauty Industry, Hospitality, Retail, Clerical and many others
  • If there is no Award for your industry then the industry standard or your industry professional organisation can help you with the appropriate pay rate for them
  • Apply the minimum standards to your employees. In Australia, The National Employment Standards (NES) are minimum standards even without an Award relating to your industry. One of the minimum standards is that the maximum weekly hours for any employee is 38 hours per week. Consequently, depending on the industry or agreement with the employee, any hours over that are overtime hours to be paid at the overtime rate. Go here for a copy of The National Employment Standards
  • Follow the award provisions regarding paying overtime including TOIL, entitlements to leave and breaks
  • Pay overtime hours at the correct rate. This is not covered in the NES but should be covered in your industry award. If your employees are not covered by an award, the standard rate is 1.5 times the ordinary hourly rate for that employee for the first three hours of overtime worked for that day. Did you know that Time in Lieu (TOIL) is also accrued and paid at the overtime rate when taken
  • Keep overtime/TOIL accrued to a strict minimum. Unnecessary overtime will make your wages bill blow out and you may not see enough increase in sales/revenue because of it. You or your manager must be on the game and send your staff home when their daily hours are up if possible.
  • There is a 3.3% increase to minimum wages due to the annual wages review announced on 6th This applies from 1 July 2017. You need to review your employees’ current award on 1st July and update their pay rates accordingly.