Payroll is frequently a time intensive and tedious activity for many companies. Trying to work out the applicable rate of pay for different shifts and the right loading to calculate requires a good understanding of labour awards at both the Federal and State level. Some employers turn to a payroll services company to carry out their payroll because they do not want to affect relations with their employees.

Enterprise or Bargaining Agreements in a workplace often stipulate the minimum rates of pay and entitlements for workers such as 10 days personal leave or prorate for part time employees. Personal leave includes compassionate leave as well as sick leave. Bereavement leave is also available for employees. Payroll outsourcing is often a good option for companies looking for a cost effective solution by payroll specialists who are expert in interpreting industrial relations laws. The prospect of recording and keeping track of annual and sick leave is quite daunting without the correct software and personnel to understand the complexities of leave entitlements.

Normally, Australians adopt a 38 hour week. Some workers are asked to work on rotating shifts which can be up to 12 hours at a time. Overtime often applies for hours worked over and above the standard hours of work for that role. Overtimes rates of pay can vary from 150% to 250% of normal rates of pay. For the initial 2 hours of overtime in a given day a special rate of 150% applies. For overtime in excess of 2 hours a day a higher rate of pay equal to double the normal rate applies. Weekends and public holidays can attract loadings of 100% to 250% depending on the Award. Payroll services firms can relieve employers of the burden of calculating employee pays.

Superannuation is calculated on all gross income, subject to a $450 threshold per month, at 9%. Employees can choose to salary sacrifice their gross income and instead opt for superannuation or another type of benefit. An arrangement to salary sacrifice has significant tax benefits for the employee. Fringe benefits tax is imposed on some of the benefits an employee receives for the employer and this can offset the benefit of salary sacrificed arrangements. The exception is salary sacrificing into superannuation.  Payroll outsourcing is a great solution for many employers who do not want to be responsible for the complexities of payroll calculations.

Pas ay you go tax is deducted from an employee’s gross income and paid to the Australian Taxation Office. All employers must be registered as withholders of employee tax and need  an ABN or payer withholding number.  Payroll outsourcing and payroll services companies are specialists in the calculation of payroll and preparation of pay slips.