Employee and payroll essentials for SMEs

Everything you need to do to manage your employees

Our previous blog looked at what owners of small to medium-sized enterprises (SMEs) can do to take advantage of the Queensland Government’s support for small business – we’ll share move information about other state-based grant programs soon.

This blog considers the next step – what you need to do to meet your legal obligations to your employees, the Fair Work Commission and the Australian Taxation Office (ATO).

Employer tax obligations – As an employer you’ll need to deal with wage-based taxes: PAYG (pay as you go) and payroll tax. If your business pays taxable wages in Australia above a certain threshold (decided individually by each state and territory), then you must:

  • register for payroll tax with the relevant office
  • register for PAYG withholding
  • report and pay withheld amounts to the ATO
  • provide payment summaries to employees

Aurion’s guide to Perfect People and Payroll will help you to understand your business payroll needs and what to look for in a payroll solution.

Pay and Entitlements – Your employees’ legally enforceable entitlements include being paid the relevant industry award or minimum wage and being provided a pay slip within one working day of their pay day.

Time Off – Part-time and full-time employees are entitled to paid annual leave and paid personal leave and may be eligible for other leave entitlements, including maternity and parental leave.

Superannuation – Making superannuation contributions for your eligible employees is a legal requirement – the minimum employer contribution is currently 9.5 percent of an employee’s ‘ordinary time earnings’ – which doesn’t apply if you’re a sole trader or in a partnership. Don’t forget to set up your payroll systems to make all payments before each cut-off date so you aren’t penalised for failure to pay your contributions on time.

Health and Safety – As part of your responsibility to provide employees with a safe work environment, you must also assess risks and maintain control measures to prevent or minimise employees exposure to harm, and provide training in how to keep the workplace safe for all staff and visitors.

Occupations like mining and construction will have unique safety requirements based on the specific work site; and those working with liquor and gambling will require specific licences and training. Employers must also take-out workers’ compensation insurance to cover the costs of benefits for employees who received an injury or illness while working.

Record Keeping – Because your business is looking after confidential financial information, you must ensure no-one can access them other than the employee, you as their employer, and your payroll staff. Employee records must also be kept for seven years in a format that’s readily accessible to a Fair Work inspector.

Keep reading: the Australian Government has developed a Starting your business checklist covering the different stages of establishing a business; and we have a great blog on Doing more with your money in 2019. We will post more updates on state payroll changes as it is announced – stay tuned.