Things to be Aware of When Doing Payroll
With Christmas just around the corner, one thing you do not want to do as a business owner is making a big mess of the payroll. That is why, our payroll specialists, Jay Rajapakse and Fred Chang have provided a general list of things to be aware of when doing the payroll.
Are you paying the correct rate of wages under award?
It is vital and imposed by law that you pay the minimum wage rate for all your employees as stipulated in Award Classifications. Award classification varies according to the work performed by employees. To find the correct award for employees, please click here.
Have you hired an employee or a contractor?
Employee versus contractor has been a popular topic with the ATO in recent years. Getting this wrong may cost lots of money with regards to unpaid super and penalties for failure to withhold PAYG Withholding. It is wise to contact your accountant before you decide to engage someone as a contractor.
What is Payroll Tax and when have I exceeded the threshold amount?
Payroll Tax is a self-assessed, general purpose state and territory tax assessed on wages paid or payable by an employer to its employees when the total wage bill of an employer (or group of employers) exceeds a threshold amount. Payroll tax can be complex when your business employs workers in different states and your business is part of a group of companies. In Queensland, the Payroll Tax Threshold is $1.1m. Please be aware that the payroll tax calculation includes amounts such as superannuation, fringe benefits, allowances, and amounts paid to contractors. For more information on payroll tax rates and thresholds in your state or territory please click here.
If I pay my employees more than their award amount, can I ignore the rest of their award?
Put simply, No. Paying above-award rate only covers the financial aspects of the award. You must still comply with other parts of the award such as leave entitlements, hours of work, and conditions of work.