Top 5 tips for keeping your payroll in tip top shape
Payroll is one of the most important tasks of running a business and can be pretty intimidating with the screeds of legislation to trawl through. For many NZ employers, organising it all can be a bit of a struggle – especially when trying to juggle complex government requirements, tricky leave calculations and Kiwisaver.
Regardless of the size or complexity of your business, Ontrack Payroll has you sorted work hard to make your payroll easy as possible for you.
Here are 5 top tips you can use to give yourself the best possible shot at getting it right.
1. HAVE AN EMPLOYMENT AGREEMENT FOR ALL OF YOUR STAFF
All employees must have a written employment agreement. Make sure each employee has the correct type of agreement, for example are they permanent (full or part timers), fixed term (full or part timers), seasonal or casuals? Are casuals really casuals or part-time employees with a clear work pattern? You must have a signed agreement prior to the first day of work. If you do not have one prior to the employee starting work, then you cannot have a trial period in your contract. If you are not sure what should be in an employment agreement, you can check out the MBIE Employment Agreement Builder or get some professional help.
2. REVIEW AGREEMENTS REGULARLY
Set a reminder to review employee files regularly to ensure all conditions of employment are current and documented and meet the latest requirements i.e. agreed hours and reasonable notice for shift cancellations, restrictions on secondary employment and deductions from employee’s wages. Provide any variation of employment in writing to the employee. A reasonable amount of time should be provided for review, discussion and agreement by both parties. Any variation must be signed by both parties. Ensure any variations are shared with the payroll processing team or person.
3. ENSURE YOU HAVE ALL THE RELEVANT PAPERWORK FOR YOUR EMPLOYEES
You are required to hold an IR330 for each staff member. This advises what tax code the employee is on, and a declaration which they sign. If the employee changes their tax code, they must fill in a new IR330 form. If they don’t complete an IR330, you must deduct PAYE (pay as you earn) using the no-declaration tax rate. The no-declaration rate is 46.39 cents in the dollar (including ACC) which is a much higher tax rate than usual.
I would also recommend having an employee form which states full name, date of birth, address, phone numbers, bank account numbers and next of kin.
4. KEEP ACCURATE RECORDS
Make sure you have a record-keeping system that accurately calculates, records, tracks and stores hours worked for each day in a pay period. Time and wage records are required to be produced on demand if requested by the Labour inspector. Using payroll software makes processing of payroll easier and tracks leave information electronically. It is also a great source of information for your business to tap into.
Check you have the leave entitlements set up correctly for each employee. If this is not correct at the start of employment then leave will not accrue correctly. You may then end up with a payroll system that is non-compliant. If you are not sure, get some expert help or training to assist you with this.
5. ENSURE YOU HAVE A TRUSTED ADVISER ON HAND FOR HELP
If you are processing your own payroll, ensure you get some training from the professionals. Its all good and well using a payroll system to process your payroll, but you need to know that you are paying your staff correctly. A little time spent on getting some training could save you a big headache in the future. Having a trusted payroll professional to answer your questions and help along the way is also essential.
Of course, you could also outsource the payroll functions in your business. MYOB have a blog on outsourcing their payroll. If you would like to look at the different options we are more than happy to discuss those with you. You can contact us here.