Payroll is a vital part of the Australian business structure. Not only is it crucial to pay your employees their agreed salary, it is also illegal to not fulfill the tax and technical accounting requirements particular to the Australian legal landscape.
Though as an outsider managing payroll could seem a straightforward business task, in reality a constantly fluctuating market and changing regulations means that it is a highly complex profession. It is also one that's evolving in the wake of new technology and enterprise needs.
With that in mind, let's have a look at exactly how the payroll profession is adapting and why it's so essential in Australia.
Why is payroll so important in Australia?
Payroll managers combine a mixture of technical, human resources and accounting skills with meticulous record keeping and legal compliance. The payroll process is particularly essential in Australia as it works within a complex legal environment that is highly regulated and constantly changing.
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Australian payroll is a complex and regularly changing landscape.
There are many aspects in payroll that must be taken into consideration:
- National employment standards: Employment legislation is a highly politicised area of Australian regulation and is frequently subject to change. Central to this are the ten national employment standards laid out in the Fair Work Act of 2009. Unionised industries must also take into account Enterprise Bargaining Agreements. Individual state based regulations must also be adhered to.
- Superannuation: The Australian government supported superannuation retirement programme is intended to help employees to invest in their retirement. Employers must adhere to contribution requirements and also report 'super' payments using an electronic reporting standard known as SuperStream.
- Minimum wages and hours: The federal minimum wage must be adhered to unless there's an appropriate 'Australian Pay and Classification Scale' that applies to an employee's position. Employers must also take into account the 38 hour a week limit on work hours unless other shift based agreements are in place.
- Taxation: Australian employer's tax responsibilities are complex and wide ranging. The key areas are Goods and Service Tax (GST), Pay As You Go (PAYG) and Fringe Benefits Tax (FBT) alongside payroll tax rates and thresholds that vary from state to state.
- Leave and insurance: Australian employers must cover their workers with workers compensation insurance. They also have at least four weeks paid annual leave and ten or more days of sick leave.
How is the payroll landscape shifting?
With all of these factors to consider, there are growing expectations on payroll departments. Increasingly sophisticated technologies are now allowing more employee friendly digital platforms which can integrate with traditional HR systems. These systems, known as HRIS, are showing companies that payroll can be unified with an employee lifecycle to make a seamless user experience for their staff.
The results of these increased technological abilities are largely two fold:
1. A more business facing role
The dawn of HR Shared Services has opened up the possibilities of payroll as a business facing role. Sophisticated platforms can now give employees easy access to payslips alongside mechanisms for booking leave and sick days. Companies view such employee driven integration as a way to improve their relationship with staff, rather than as merely a basic necessity.
For payroll employees this means that the role is increasingly less siloed and more involved with the business as a whole. Helping to build and maintain this all in one software allows payroll employees to engage with how payroll influences all other aspects of the business, and identify areas which can be better managed. Payroll is already improving the experience of employees and business outcomes which in turn has added even more value to people with these skills.
Payroll is set to become a more business facing role.
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2. Automaton means technical expertise is valued
Traditionally payroll was a very manual position. A huge amount of information had to be accurately transferred between systems to ensure that the process could run at all. In the modern workplace, data processing software is largely able to handle these traditional responsibilities. But far from removing the usefulness of payroll employees, it's now enabling them to delve into the more technical aspects of the role- something that's much needed in the complex financial sphere.
How can Ambition help?
AccountAbility is part of the Ambition Group, we can leverage our infrastructure and expertise to manage the complex process of contractor pay. Our Contingent Workforce Management is a strategic approach to managing any organisation's casual workforce. Our services reduce costs, increase accountability across all functions and also provide effective risk management.
Through this service we take full legal responsibility for contractors during their tenure, as well as processing the contractor's payroll. Our dedicated team also provides candidate:
- Contractor care
- Payroll processing and associated taxes
To learn more about payroll and what our team can offer you, or for any recruitment needs in this area please contact our consultants today. get in touch today.