As your business grows, so does the complexity of managing payroll. It’s important to ensure that your employees are paid accurately and on time. Payroll solutions in Australia can help you simplify the process and save your business valuable time and resources.
Whether you are managing a small startup company or a beginner learning how to manage your business effectively, this article is right for you. Continue reading to learn more about managed payroll services and why your business needs them!
What is a Payroll Management System?
A payroll management system is a computerized database or software program for employee payments. It records employee info, such as name, address, hours worked, and taxes withheld, and calculates pay for each individual.
Different Types of Payroll Options
When managing a business, big or small, having an accurate and efficient payroll system is a great plus. There are various types of payroll systems that you can use to match your business and employees’ needs.
One option is to manage your payroll in-house with a dedicated employee or team. In-house assistance can be done manually with spreadsheets or with the help of specialized software. However, managing payroll in-house requires extensive knowledge and understanding of state and federal regulations. It also requires significant time and effort devoted to keeping everything up-to-date.
Another option is to hire a bookkeeper or an outside company to handle your payroll. A bookkeeper will keep track of all aspects of your business’s finances, including taxes, accounts payable/receivable, and more.
They can also handle payroll needs by calculating wages, keeping records, filing tax returns, depositing paycheck funds into accounts, etc. Hiring a bookkeeper can be beneficial if you don’t have the time or expertise to do it yourself, but it can come with higher costs than other options.
Online Payroll Software
The last option is to use online payroll software such as QuickBooks Online Payroll or Gusto. These systems are designed for small businesses that don’t have the resources to manage their payroll in-house or hire a bookkeeper.
With online systems like these, all you need to do is enter employee information, and the software will take care of the rest. This includes calculating taxes, printing paychecks and direct deposits into accounts. It’s fast, easy, and usually cost-effective too!
Benefits of Opting to Online Payroll Service Providers
From an effective and time-efficient tool to easy access and excellent integrations, payroll service providers offer numerous benefits for many businesses.
The online payroll system is designed to automate the entire payroll process, eliminating manual errors associated with paper-based systems. Online payroll system ensures that employees receive their wages accurately and on time every month. Additionally, the automated system reduces the need for double entry into accounting systems which further helps reduce data entry errors.
Enhanced Employee Satisfaction
With an automated payroll system, employees can view their pay stubs anytime from any device with an internet connection. Automation allows them to keep track of their earnings in real-time and makes it easier to budget their finances effectively.
Additionally, online payroll services allow employees to check their PTO balance and submit requests for time off as needed without needing paperwork or waiting for approval from HRs.
Online payroll systems help ensure that taxes are calculated correctly and filed on time every month, so employers don’t have to worry about missing deadlines or late fees. Furthermore, most modern systems have built-in compliance features such as automatic state tax filing. These features ensure that employers remain compliant with all applicable laws and regulations.
Automated payroll processes save businesses valuable time by eliminating the need for manually entering data into spreadsheets or other software programs each pay period. Instead of spending hours preparing reports or dealing with paperwork related to employee wages and taxes, businesses can quickly generate accurate information.
By automating payroll, businesses can reduce costs, including labor costs associated with manually processing payments and staffing personnel for admin duties.
Furthermore, using an online service provider also eliminates costly mistakes due to human error. This tool also ensures that all taxes are paid on time, thus avoiding costly penalties due to non-compliance issues.
Tips for Managing Payrolls
Managing payroll alone can be daunting due to all the required numbers and details that need inputting. But effective software can make this tricky job a breeze. Here are some tips to keep you guided:
Collect and Update Employee Data
The first step in managing payroll is collecting and updating employee data. Employee data includes basic information such as name, address, Social Security number, birth date, and any deductions they might have.
You’ll also need to collect information such as hours worked, job title, pay rate, sick time accrual rate, vacation time accrual rate, and other information to calculate gross pay accurately.
Calculate Gross Pay Efficiently
Once you have all the necessary employee data collected and updated in your system or spreadsheet, you can begin calculating gross pay. Ensure you’re familiar with local laws regarding overtime wages, so you don’t inadvertently violate any regulations.
Calculate Net Pay Accurately
Once gross pay is calculated for each period accurately, it’s time to calculate net pay—the amount employees receive after withholdings like taxes are taken out. To do this accurately, you must use tax tables that provide up-to-date information about federal income tax withholding rates. You should also ensure that state income taxes are calculated correctly according to the rules in your jurisdiction.
Determine Employee Payroll Tax Contributions
To determine employee payroll tax contributions each period, you’ll need to use formulas based on the current federal income tax rates and Social Security contribution rates.
However, other mandatory deductions such as Medicare contributions or union dues payments must be taken out of employees’ wages each pay period. So, be sure these amounts are deducted from their net pay accurately before issuing payment.
Keep Accurate Payroll Records
To maintain compliance with legal requirements and avoid costly penalties, keeping accurate records of all payments made during a given period is important.
Ensure to include all the supporting documentation, such as W-2 forms issued at year-end and quarterly tax return filings with local governments. If you’re uncomfortable keeping track of all this paperwork, online payroll management is an efficient tool.
Determine Modes of Payment
Once you’ve determined the net pay amounts due to each employee, it’s time to decide how those payments should be issued. Salaries can be done through direct deposit into their bank accounts or paper checks delivered via mail.
Many employers prefer direct deposit because it eliminates the costs of printing paper checks and the physical effort to claim the deposit on the employees’ side.
Pay Government Fees and Benefit Providers
After calculating taxes, employers must send those funds and any fees owed to benefit providers to the appropriate government agencies before issuing payment.
File Tax Reports
Another tricky part of the payroll process is the filing of tax reports. Reports should include total wages, taxes withheld, and benefits provided by the employer over the year.
Things to Consider When Choosing a Payroll Service Provider
When picking the best payroll service provider to assist you and your business in its growth, it is imperative to consider the following:
The first thing to consider when evaluating payroll service providers is their features. Different providers offer different options, so it’s important to research what each one offers regarding functionality. You should consider whether your chosen payroll service provider offers:
- Compliance and security management
- Assistance and eLearning support
- Level cloud and payroll technology tools
- System administration and configuration
- Payroll processing
- Post-pay run processing, such as statutory reporting, payroll journals, and disbursements
- EOFY updates
When choosing a payroll service provider, accessibility is key. You want to ensure that all your employees can easily access their pay information from anywhere, 24/7, if possible. Many providers offer mobile apps or desktop programs, so check which ones best suit your needs.
Of course, the cost is always a factor when selecting a payroll service provider. Many companies will charge a flat rate for basic services such as direct deposits and tax filing but may also have additional fees.
When choosing a payroll service provider, reputation matters. You want to make sure you’re dealing with someone reliable and trustworthy. Read customer reviews online to understand what previous customers thought of the company’s services and performance record.
You may also ask around in your network. Chances are someone you know has used one of these providers before and can give you an honest opinion about their experience with them.
Are You Ready to Take Your Payroll Solutions to the Next Level?
Automated payroll processing has revolutionized how businesses manage their payroll and offers many advantages. From avoiding exorbitant mistakes to increased accuracy and efficiency, automation is now the preferred choice for all payroll operations.
With the right tools, you can quickly move from manual tasks such as data entry and calculation errors to streamlined processes. So if you’re ready to take your payroll solutions to the next level, start leveraging automation today!