HOW DO I SET UP PAYROLL?
WITH BOOKKEEPER JEN SWENSON, CEO OF GOLD COAST-BASED THE ENTHUSIA GROUP, WHO HAS ALMOST 30 YEARS’ EXPERIENCE IN ACCOUNTING AND MENTORING FOR SMALL BUSINESSES. DRAW UP A CONTRACT
Once a suitable candidate has been found, it’s good to provide a letter of offer setting out the conditions of employment as well as an employment contract, where an industry award is not applicable or available. This contract should be signed before employment commences.
The employer should provide a Tax File Number declaration, a superannuation standard choice form and an employee information sheet and these should be returned to the employer on or before commencement of employment. The Tax File Number declaration contains information that relates to the amount of tax to be deducted; the superannuation choice form contains the details of the employee’s superannuation fund, as well as the USI (Unique Superannuation Identifier) for the fund and the member number; and the employee information sheet is a template created within the business for the purpose of employees providing contact details, bank details and details of next of kin in the case of an emergency.
With the introduction of SuperStream by the ATO, most accounting programs have their own compliant method of contributing super. Where an employee doesn’t have a super fund, the employer should designate a superannuation fund as their default super fund.
When an error has been made in payroll, the employee needs to be notified in writing, including how the error has occurred and a course of action to rectify it (notes should also be made in the employee file). Where there is an error, it should be rectified by creating an unscheduled pay run to adjust the errors. In the event of an overpayment to an employee, they must pay the money back to the employer either in a lump sum or, where the overpayment has been over a length of time, it can be deducted over subsequent pay periods to bring it back into line. Where there is an underpayment, the difference is to be paid to the employee.