Six ways to fine-tune your payroll
Whether you have a staff of hundreds or just hired your first employee, these tips from MYOB can help make it easier to pay your workers.
By Scott Gardiner, MYOB's National Sales Manager SME Solutions
1. Payroll frequency
How often do you pay your staff: weekly, fortnightly or monthly? Our research shows that 65% of New Zealand employers opt for weekly. For many businesses, it’s the industry in which they operate that dictates payroll frequency. Weekly payrolls are standard in the trades, and construction and hospitality industries, for example.
If you have more flexibility then consider carefully whether a weekly payroll is right for your business. It can help your cash flow because you’re paying smaller amounts more frequently. However, there’s only a short window for you to fix any problems.
2. Know the rules
Employers must comply with employment laws and face tough sanctions if they don’t. Make sure you know what’s required of you and that you keep accurate records. You’ll need at least seven years’ of records of wages, time, holiday leave, and PAYE and KiwiSaver deductions.
Find out more about your obligations as an employer on the Inland Revenue website(external link).
3. Reduce human error
Businesses that manually input payroll and accounting data into separate systems risk human error — and will find it harder to see which jobs are profitable.
An integrated accounting and payroll system helps bypass these sorts of errors as the user enters details once and automation takes care of duplicate fields and other entries. This improves accuracy and reduces the time spent on reporting requirements. Payroll software also gives you a better handle on labour costs and lets you generate a detailed costing of jobs by project.
4. Go digital
As government agencies move towards digital services that help New Zealanders meet GST and PAYE obligations, businesses with manual processes need to consider how to move online.
Most businesses still collect data on paper and interact with government agencies in person or by post.
Inland Revenue wants 70% of all transactions to be digital by 2017. The first step, an e-GST pilot that lets small businesses submit GST from their accounting software, is already under way. The next project being lined up is e-PAYE, a proposal to change the threshold above which employers must submit PAYE information electronically.
5. On the go
Businesses and their staff are becoming more mobile. With more employees using smartphones for work, getting payroll information on a mobile device has become hugely appealing.
As an employer, managing payroll remotely means you can take a well-earned break without having to be on site to pay your staff.
6. Collaborate with your advisors
Work closely with your accountant or bookkeeper to make sure your payroll system is in sync with your accounting software. Payroll data can be used with inventory and other information to help you make strategic decisions.
For many businesses, staff is the biggest cost. Looking over labour costs with your advisors could hold the key to making effective investment decisions. When hiring staff, ask yourself if you have the right number of people with the right skills for the required tasks.