Advice & Assistance from Perth-based Accountant regarding Payroll & Employing People

In this video we will go through some of the key considerations you will need to make when hiring employees.

1. The first consideration is assessing your business needs:

Before you start, it’s a good idea to assess your business needs so that you can hire the right person for your business.

If you need help with just one specific task, such as bookkeeping, paying for their advice as a contractor is probably the best way to go. However, if you need someone to help with the day-to-day running of your business and to look after clients or customers, you may need an employee.

When determining whether you need an employee or contractor you need to think about:

• The tasks you need the employee or contractor to do;
• Any skills and qualifications they’ll require;
• How busy the job will be;
• How long you think you’ll need them for; and
• If you intend on hiring an employee, you will also need to think about if you are going to hire them on a full-time, part time or casual basis.

2. The second consideration is ensuring that you comply with the Fair Work Employment Standards or other relevant legislation.

As an employer, you are legally obliged to pay your employee the right wage for their work. A great place to start understanding what your legal obligations are when you hire employees is the Fair Work Ombudsman website.

Generally, the employment standards require employers to:

• Issue employees with payslips;
• Ensure the minimum employment standards and minimum pay rates are adhered to as set out by the Fair Work Ombudsman;
• Provide full and part-time employees with paid annual leave based on their ordinary hours of work, which is generally four weeks for each 12 months of service; and
• Provide full and part-time employees with 10 days personal leave (sick and carers leave) each year.

3. The third consideration is complying with your other legal requirements, such as:

1. Registering for PAYG Withholding.

   As an employer you must:

   • Understand the residency status of your employees;
   • Work out the amount to withhold;
   • Report and pay tax withheld amounts to the Australian Taxation Office; and
   • Provide income statements to employees and lodge an annual Single Touch Payroll finalisation report with the Australian Taxation Office after the end of each income year.
2. You also have superannuation guarantee obligations.
   • Superannuation is a retirement savings program in Australia to help provide employees with a pension in retirement.
   • There is a minimum amount you must pay based on your employee’s ordinary times earnings and current superannuation guarantee rate.
   • The payments need to be made to the employee’s nominated superannuation fund within the legislated time period. The obligation to pay superannuation is very strict and if the rules are not followed, then significant penalties, such as 200% on the amounts originally owed, may be imposed.
3. Have you taken out workers compensation insurance?
   • Workers compensation insurance is a form of insurance paid to employees if they are injured at work. It is typically compulsory for employers and needs to be taken out in each state you employ people in.
4. You also need to consider other insurances.

• • Business insurance brokers can often help with this.

4. The fourth consideration is setting up your systems. Such as:

Have you setup Single Touch Payroll (STP)?

Under Single Touch Payroll, employers send payroll information to the ATO each time they process their payroll.

This ensures that the ATO has up-to-date information on employee salaries and wages, and helps to streamline the reporting process for employers. It is a mandatory obligation for any employer who hires staff for their business.

There are a number of STP-enabled software solutions available, including both desktop and cloud-based solutions.

Have You Setup Your SuperStream Payments?

SuperStream is a way for businesses to make employees superannuation guarantee payments electronically. This means that businesses will need to send employee contributions to their chosen fund using an ATO-approved electronic data and payment method.

The purpose of SuperStream is to streamline the process of making super payments, making it simpler and more efficient for both employers and employees.

There are a number of different ways to setup your SuperStream payments, including using SuperStream compliant payroll software.

Have you prepared an Employment agreement?

An employment agreement sets out an employee’s rights, as well as your expectations about their performance and duties. Having an employment agreement is important for your business because, amongst other things, it can help protect your intellectual property and confidential information.

Once you have these essentials in place, you can then start looking for an employee.

When looking for an employee, you could consider:

• advertising your job vacancy online;
• using a recruitment agency; or
• asking friends and colleagues if they know anyone who may be suitable.

Once you have found your new employee, it is vital for you to also:

1. confirm if the new employee has the right to work in Australia;
2. if so, you will need to provide them with a tax file number declaration form that allows you to appropriately withhold tax from their pay; and
3. a superannuation choice form that lets them choose their preferred super fund.

Employee hiring and management is seldom a one off event, but rather an ongoing relationship that requires constant communication, feedback, and support.

If you do it right, you can build a loyal and motivated team that will help you take your business to the next level.

If you’re needing assistance with business and employment matters, please let us know. We’re here to help.