Payroll – Why It Pays To Buy Local

Here’s why you should choose a locally based payroll solution

A snapshot of global payroll operations would reveal a patchwork of unique tax laws, differing salary benchmarks, and distinct reporting requirements and financial regulations. Whether your payroll solution is from a homegrown hero or global behemoth, they’re going to need expert local knowledge and experience to keep your organisation compliant and off the tax office’s radar.

In Australia, the incorrect application of awards has led to a billion-dollar tsunami of wage and superannuation underpayments and turned payroll into a growing source of financial and reputational risk. It’s also sparked intense discussion about the difficulty of compliance with Australia’s layers of federal and state employment and taxation legislation.

Co-founder of the Australian-owned and developed workforce management platform Tanda, Tasmin Trezise, commented in Business News Australia that “Australia wins the award for the most complicated place in the world to pay staff, so people overseas look at us and say ‘if you can deal with it there, you’ll be fine here’,”.

While Australian payroll professionals certainly have their work cut out for them, compliance is achievable with the right expertise and software solutions. Given the double threat of rising risk and challenging compliance, there’s a strong argument to base your choice of payroll solution on the experience, insight and track record of a local vendor.

Compliance begins with configuration
The Age reported earlier this year that Wesfarmers managing director Rob Scott, who leads Bunnings, Kmart and Target, and Super Retail Group managing director Anthony Heraghty, who runs businesses including Rebel Sport and Supercheap Auto, both indicated that a key factor in staff underpayment was software bought from offshore vendors and not configured for Australia’s relatively complex labour environment.

Indeed, a Global Payroll Survey of in-country payroll professionals by TMF Group and the Global Payroll Association found that their biggest challenge is a lack of knowledge about local regulations:

  • 41 percent reported a ‘lack of knowledge of local payroll legislation and requirements’
  • 30.2 percent cited a failure of in-house professionals to understand local rules and regulations as the most common reason for payroll errors.

To avoid penalties for breaching an award, ensure your software is correctly configured from the start. Global payroll solutions are not specially set-up to interpret Australian awards, and you need a tested, accurate implementation process.

That’s why Queensland-based aged care provider Blue Care engaged Aurion to replace three legacy systems with a single platform and achieve a single source of truth for their employee and payroll data. After an epic two-and-a-half-year implementation, Aurion’s configuration work of 30 different awards in the system meant that Blue Care had the ability to accurately calculate salary on-costs and manage payroll and rostering for all staff. Aurion has adapted the system to major legislative reforms such as the Workplace Relations Amendment (Work Choices) Bill 2005 and the Fair Work Act 2009.

Adapting to changing regulatory environment
The 2019 Global Payroll Complexity Index from NGA Human Resources reports that the greatest challenge faced by payroll professionals (35 percent) is keeping up to date with changing legislation.

Locally produced and managed software solutions like Aurion are designed from the ground up for Australia’s complex industrial and legislative environment. The customer engagement and support teams are based onshore and have developed specific expertise in Australia payroll.

On-the-ground expertise like Aurion’s leads to faster and more accurate adaptation to reforms like Single-Touch-Payroll (STP). Braemar Presbyterian Care use Aurion’s STP-enabled payroll solution to automatically send all required data to the ATO, with no manual intervention or additional processing steps. Kirsty Harwood, Corporate Services Coordinator for Braemar said, “STP reporting to the ATO is running smoothly through the Aurion gateway and the processes set up are easy for our payroll department to follow”.

A local solution from Aurion is every bit as scalable as the global alternatives. When the NSW Electoral Commission (NSWEC) decided to upgrade their payroll system, a spokesperson commented, “Aurion successfully implemented the project and processed a payroll covering almost 20,000 NSWEC personnel. This large-scale requirement was accurately processed and delivered against all critical milestones.”

A company like Aurion that only operates domestically is a safer long-term option because of their clear commitment to the local market. One NZ-based payroll provider exited the Australian market in the face of mandatory STP integration rather than make the investment to achieve compliance.

Aurion has provided custom-designed solutions to the Federal Government for over 25 years, including unique solutions for accurate and compliant interpretation of public service entitlements, including Long Service Leave (LSL) and full-service history and whole-of-workforce reporting and analysis in one solution, as well as full legislative and public service (APSED) reporting.

To ensure confidence in your payroll compliance, your first concern should be to gain access to Aurion’s institutional knowledge and experience. Find out how our best-practice People & Payroll solutions will make managing your People & Payroll simple – let’s get started!