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Understanding online payroll for your business

Payroll can be a very daunting task for any business owner with staff. But thanks to today’s technology, the right approach and the right software will make your payroll process run smoothly.

5 things to understand

While the details and regulations surrounding payroll will vary from one jurisdiction to another, there are some areas of the law that are likely to be in force wherever you run your business. These are listed below.

1. Tax

Any business with staff is required to withhold the proper payroll taxes from employees’ pay packets and pay the appropriate government taxes. To put it simply, you’re acting as the tax collector for your employees.

2.Retirement plans and healthcare

You may also have to manage payments for things like social security and healthcare and requirements will vary. That means withholding the right amounts from your employees’ pay and, usually, paying employer’s contributions too. Sometimes these are fixed amounts, sometimes they’re a percentage of each employee’s salary.

3. Fines and penalties

If you don’t pay the necessary taxes you could receive a heavy fine or other penalty, so it’s important to calculate the amount of PAYG, payroll tax and Superannuation Guarantee Contributions (SGC) owed and pay them on time.

4. Reporting

Tax liabilities must be reported to the appropriate government agencies, and your employees, in writing. This might be done weekly, monthly or yearly, depending on local regulations.

5. Payroll is for employees

Your payroll legally includes the people you directly employ. It doesn’t usually include independent contractors or freelance workers, or anyone who invoices you through their own business. If you’re ever in doubt about who’s on your payroll and who isn’t, talk to your us.

Payroll software makes it easier.

We use and recommend Gusto’s payroll software. Here are some reasons why:

• Go online and use the cloud – These days it makes sense to use cloud-based accounting and payroll software. You can access your payroll information anywhere and at any time, and share information with trusted partners. Plus there’s less IT support work required.
• Gusto can grow with you – You may only have one or two employees now, but no doubt you’re aiming high. With Gusto’s scalable payroll software you won’t have to change systems as your company grows.
• Benefits – Gusto has all the time tools you need. Simple time tracking, customized PTO policies, time off requests, holiday pay, calendar syncing…need we say more?

Whether you handle your payroll in-house or enlist the help of another company, business owners are responsible for keeping accurate records and filing them with the tax office. So it’s important to take the time to get it right.

Got a question?

Please don’t hesitate to get in touch with us.
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Xero has a very useful and extensive guide on this topic which you may be interested in reading also.