While most employers don’t deliberately underpay employees, errors can occur. Coles, Woolworths, Hero Sushi and MasterChef George Calombaris are the latest in a long line of companies and franchises to be caught in payroll scandals as a result of outdated payroll systems. Errors can also go the other way, with companies inadvertently overpaying employees due to complexities such as the compulsory superannuation contribution rate.
The COVID-19 Pandemic has impacted where, how and when our businesses operate. Australia has seen an overnight transformation which has fundamentally impacted almost every department within an organisation, including payroll.
With complexities including the JobKeeper scheme combined with pre-existing considerations such as the appropriate base to apply superannuation contributions; how to treat the various components of a termination payment (including redundancy and concessional tax treatment); and how to apply overtime and penalty rates, now is the time to review and ensure your payroll processes, systems and people are aligned to your strategic goals.
This is essential to make sure that employers can keep up with constant changes in the various legislation that governs employee entitlements. For example, earlier this year, the Australian Taxation Office (ATO) made clear its view on applying compulsory superannuation to annual leave loading (the 17.5% applied to annual leave), which means many businesses will be caught out continuing with old practices.
Over the past 12 months, there has been a significant spike in demand for outsourced payroll services in Australia to save businesses time and cost of addressing the increasing complexity of tax and payroll legislation.
In this summary we share the benefits of a payroll system review and what companies can do to further mitigate their compliance risk. Click the button below to download the full article.
This article covers the following:
- Addressing knowledge gaps
- Key issues to consider
- Payroll best practice