What Are My Payroll Obligations As An Employer?
What you need to do as an employer when it comes to payroll obligations.
Running a business is a difficult job. As an employer, you are going to have additional burdens and requirements to meet. This includes record keeping and payroll obligations. The main way to think about them is what needs to be included and how often. In other words what should be on a payslip and how often do you hand them out and store them.
The term payroll can be combined under the heading payslip. Thinking about the term payroll, it can be broken apart. Simply, a list of all the people who get paid which is usually the employees. Therefore, the first point is what should be included in a payslip. In the case of a payslip, there should be the rate of pay which the employer paid, the gross and net amounts along with deductions. Finally, there should be details about holiday leave, bonus, penalty rates etc. Additionally, the employer needs to transfer actual deductions like PAYG need to the ATO. There are other small overlooked requirements such as reimbursing an employee for work expenses.
When it comes to the actual payslip it must be within one working day of payday and it can be either paper or electronic. Now when it comes to what is actually in the payslip there is a long list. This includes the employers’ name, ABN, employees name, date of pay, pay period e.g weekly. Likewise, the things mentioned earlier like deductions, gross amounts and net amounts. If you are unsure as to whether you are meeting the payroll obligations you could check with a business lawyer.
Sarah joined a new company as a full-time employee. As per her modern award wage, Sarah is a level 2. Therefore she receives $25 per hour. As she works a 50 hour week her employer makes deductions from her pay. This is the PAYG deductions. Therefore, the payslip will list the gross wage of $25 times 50 hours and then subtract the PAYG deductions.
The Fair Work Commission is the body that controls and oversees this issue of payroll obligations along with record keeping. If an employer breaks any of these obligations they may have to pay a fine of $1260 per offence as an individual. As an employer, you have to keep records such as these main ones
- General records
- Pay records
- Hours of work records
- leave records
- superannuation records
- Termination records
Furthermore, employers, have an obligation to pay superannuation to their employees. This includes superannuation contribution records. However, there are differing requirements for what needs to be included if the employer uses a defined benefit interest in a defined benefit fund. Furthermore, the actual payslip itself should have the amount that went to super and the fund that it is associated with.
Ultimately it comes down to a few things. You need to provide pay slips and provide them on time. There should also be details about superannuation and how much is paid. Finally, the employer needs to keep records.
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Justin is a legal intern at Lawpath as part of the content team. He is currently studying a Bachelor of Laws and a Bachelor of Economics at UTS.