Payroll is a payment that a business pays to its employees. You can often leave this burden of managing payroll to reliable bookkeepers in Melbourne. Apart from worker’s salary, payroll also includes maintaining records of those payments and paying taxes on behalf of those workers. When recording payroll expenses, you need to consider a few things that will be discussed in this blog.
Importance of Payroll Management
Employers have to pay employees on time. If payroll is not correct or late, employees start raising questions about the integrity of the company’s finances. Therefore, accurate management of payroll is essential to maintain compliance, avoid costly penalties, and ensure employee satisfaction. However, payroll mistakes can happen easily, so it is vital to seek help from a professional bookkeeper for your business. Make sure to hire someone who is an expert in payroll management, so you can focus on running your business. Professionals can reduce the risk of errors in payroll.
Things to Look After When Recording Payroll Expenses for Your Business
Payroll ensures the employees are paid accurate wages and salaries as per the rules in the organisation. Since managing payroll is a complex task that involves calculating the salaries of individuals, companies rely on professionals. Accounting and bookkeeping services providers are experts in managing payroll and helping business owners manage their financial affairs.
1. Consider Checking the Working Hours of Employees
The records of employees may differ from part-time to full-time employees. The pay rate is set according to the hours completed. Apart from this, the bookkeepers have to maintain the evidence of overtime hours. The payroll software has a time-tracking system that helps reduce the workload of professionals.
2. Maintain Employee Leave Details
The leaves taken by employees must be maintained. Some entrepreneurs sign contracts with employees where they provide the facility to employees to cash out their accumulated leave. Bookkeepers create a record of this payment along with the pay rate and date for the leaves that were cashed out. To do this task, you can also look for bookkeepers near you by searching for ‘bookkeepers near me’.
3. Collect Superannuation Data
Entrepreneurs need to pay super on behalf of their workers which is included in the nominated super account. The workers use this amount as their retirement fund. The bookkeeper makes sure this payment is made before taxes are deducted from the salaries or wages. The payroll expense data needs to include the record of the amount paid as super, the payment date, and the name of the fund to which the amount is paid.
4. Gross and Net Pay Calculations
Entrepreneurs must compute the tax to be taken from employees’ salaries using the TFN declaration. The gross pay (salary before tax deductions) and net pay (salary after taxes and withholdings) will then be calculated by your bookkeeping professional. The net pay is the amount that is credited to the accounts of employees.
5. File Single Touch Pay Report
The bookkeeper is responsible for lodging the STP report once the salaries have been disbursed and the records have been established. It is possible to accomplish it electronically. It reports wages, superannuation, and PAYG to the ATO. The report must be submitted each time the business processes payroll.
6. Make Payments for PAYG
Business owners must deduct a certain amount from employee pay and report it to the ATO. The sum must be mentioned on the Business Activity Statement. Your bookkeeper will also lodge the report of an annual PAYG Withholding and provide payment summaries to workers.
7. Maintain All Payroll Records
Bookkeeping services providers ensure they record the pay rate given to the employees. They are required to mention the deductions and gross and net amounts made from the gross amount. Additionally, they have to record the allowances, bonuses, and incentives paid to the workers. It is vital to keep payroll records safe for up to 7 years as directed by the ATO.
Business owners can avoid making payroll mistakes by seeking help from a professional bookkeeper. They can better maintain accurate payroll records. Moreover, you can leave the stress of managing payroll to us by opting for our Reliable Bookkeeping Services.