Published on April 2nd, 2019 | by Sumit Bhowal0
Understanding Online Payroll – What You Should Know
As a small business owner with consultants, freelancers and permanent employees on my payroll, I can attest to the fact that understanding and implementing the multitude of rules, laws and obligations surrounding paying staff can be a time-consuming nightmare. Filing self-employed taxes is also a complex process. It was an irony which didn’t escape my attention that, if I hired someone to manage my payroll, I may not have the money to pay them…
For traders with tight margins and high staffing costs, the expense of hiring dedicated accounting staff can be prohibitive but on the other hand the onerous and time consuming minutiae involved in payroll can eat into time better spent growing the business. It is no surprise then to find that one-third of business owners claim that payroll is one of the major hurdles they confront when running their business.
Discovering the huge benefits gained through implementing an online payroll system compared to conventional payroll was one of those ‘Eureka!’ moments in life; the lifting of a huge weight of responsibility from my shoulders.
If you are still trapped using an outdated payroll system then the following may well be worth a read…
A major advantage of online payroll applications are automatic updates. No longer do you or your staff need to monitor and keep abreast of pay scales, tax rates and entitlements – there are now accounting systems which will automatically adjust these details. This means no more having to back-pay staff who have been underpaid due to a clerical error or face hefty fines for incorrect tax lodgements.
Staying compliant with ATO and government tax and payroll laws is a legal requirement for Australian businesses. Attempting to navigate these can be confusing and can often seem contradictory. Online payroll software can be the solution, as it has the functionality to track and calculate entitlements and deductions including those surrounding:
- Payroll tax
- Leave loading
- Staff wages and awards
- Freelance and consultants timesheets
- Annual leave and sick leave
- Regular deductions such as HECS student loan repayments
The ability for an accounting package to automatically collate historical data as well as track and submit to the ATO is a huge boon to payroll staff.
Making mandatory superannuation payments on behalf on employees to multiple super funds was once a time consuming and laborious task. With online accounting systems this process is now a breeze. Simply log the fund details into the system and during the pay run super and salary sacrifice payments details can be quickly and simply transferred.
Reporting for work
Another wonderful feature of online payroll is the power of Single Touch Payroll reporting, now offered by companies such as MYOB in their AccountRight Plus software package. The Australian government has introduced a mandatory requirement for all businesses to implement Single Touch Payroll reporting to the ATO so what was once merely convenient has now become a necessity. Once set-up, your payroll information can be automatically forwarded to the ATO when the pay run is being processed.
At the end of the financial year this reporting circumvents the need to manually prepare group certificates and payment summaries.
Precision like never before
By implementing a full service, online accounting system with payroll, I now have absolutely clarity about every facet of my business. It has enabled me to invoice immediately, get paid faster and have a more predictable cash flow. In turn I am able to forecast with far more accuracy than was once possible.
Most importantly, implementing a more functional and up-to-date accounting system has given me more time to focus on the thing I do best – my job. If you would like more time building your business and less time maintaining it, then look into upgrading to smarter online financial software and get back to doing what you love!