Rostering & Payroll
What is Payroll?
The term 'payroll' encompasses every employee of a company who receives a regular wage or other compensation. Some employees may be paid a steady salary while others are paid for hours worked or the number of items produced. All of these different payment methods are calculated by a payroll specialist and the appropriate payments are issued. Companies often use objective measuring tools such as timecards or timesheets completed by supervisors to determine the total amount of payroll due each pay period.
After a payroll accountant multiplies an employee's hours by his or her pay rate, the gross income amount is entered into a calculator or computer program. Regular deductions such as tax withholdings, medical insurance, union dues, charitable contributions and so on are then categorized and subtracted. The remaining balance is then converted to a check and becomes the employee's net pay for that time period. Payroll departments also identify the employer and employees by a federal code and keep a running tally on total income and deductions for the fiscal year.
For small business owners, keeping enough cash in a payroll account is often one of their highest priorities. Even if the business itself hasn't become profitable, employees must still be compensated for their services. This is why many smaller companies prefer to keep their payroll obligations as low as possible until they've reached a certain level of profitability. It's not unusual for small business owners to forego their own salaries in order to meet their payroll obligations.
Setting up an effective payroll system is not especially difficult for trained accountants, but it can be very time consuming. Some smaller businesses rely on user-friendly computer software to set up a simple payroll system complete with check printers and file storage. Larger companies may assign trained accountants to handle payroll issues as part of their overall duties. But many businesses without the means to maintain their own payroll systems choose to farm out this task to outside specialists.
Since payroll records are based on objective criteria such as timecards and federal tax forms, outside accountants can perform all of the calculations, store all of the year-to-date data and issue payments in a timely fashion. Employers simply need to update these payroll companies with changes in employee pay rates or deductions.
Employers
All NSW employers have certain legal obligations or duties. It is important that employers understand their rights and responsibilities to their employees.All private sector employers in New South Wales are now covered by the national workplace system.
More information about the national system, which commenced on 1 January 2010, can be accessed from Fair Work Online.
The national system now covers the majority of private sector employers throughout Australia. There will be the same set of rules about terms and conditions of employment as well as making of enterprise agreements and unfair dismissal rules and businesses in a national system. The new system consists of new modern awards and ten National Employment Standards.
It will no longer be necessary for an employer in the private sector to work out whether they are a constitutional corporation or not.
What NSW laws have changed?
From 1 January 2010, the NSW Industrial Relations Act 1996 no longer applies to any private sector employer or employee in this State. The Commonwealth’s Fair Work Act 2009 [ComLaw website] provides the industrial relations framework for these workplaces.
Are the pay rates going to change?
For employers who were covered by the NSW industrial relations system on
31 December 2009, your pay rates will remain until 31 December 2010.
After which date, the appropriate modern award will apply to your
workplace.
To find out further information regarding pay rates and modern awards please contact Fair Work Infoline on 13 13 94.
However, it is important to note that the ten National Employment Standards became effective for all employers from 1 January 2010.
Laws covering employment in NSW
All NSW employers are now covered by the national workplace relations system which took effect on 1 January 2010. This includes businesses previously covered by the NSW industrial relations system (mainly sole traders and partnerships).
If you are an employer who was covered by the NSW industrial relations system on 31 December 2009, there is some important information that you will need to know to prepare for your business’s move into the national scheme during 2010.
For more information on the national system, you can contact the Fair Work Infoline on 13 13 94 or visit the Fairwork Online website.
If you are seeking information Long service leave, public holidays or shop trading, please contact NSW Industrial Relations on 131 628.
Establishing and maintaining a business
Starting or buying and then maintaining a business can be a complex process and you need to be aware of all the rules and regulations that apply to your business.
An employer is now required to:
- Contact the Fair Work Infoline on 13 13 94 or visit Fair Work Online to establish what award and employment conditions apply to their employees under the national system.
- Issue pay slips to employees NOTE: there is new information about employer superannuation contributions which must be recorded.
- Keep Time and Wage records and Leave records
- Make available the applicable Award or Enterprise Agreement in the workplace
- Pay wages in full. An employer is not allowed to deduct any money from an employee's pay unless the employee has agreed in writing or it is required under the law
- Comply with the regulations defined under the Anti-Discrimination Act and the Occupational Health and Safety Act
These organisations are a good starting point for more information:
- The Business Entry Point provides access to government information and transactions for new and existing businesses
- The NSW Department of State and Regional Development can help guide you through key issues such as managing and growing the business and frequently asked questions
- The NSW Fair Trading can help you with business licensing & registrations, incorporations, establishment of co-operatives, product safety, trade measurement, dispute resolution and fair trading laws.
-
Employer associations which
represent the industrial (and sometimes the commerical and trade)
interests of their members. Employer associations' membership
generally consist of employers who operate in the same or related
industries. These associations represent the industrial (and
sometimes the commercial or trade) interests of their member
companies and organisations.
-
Taking over a business
If you have made a decision to either buy a business or sell a business from 1 January 2010 the National System rules under the Fair Work Act 2009 are applicable. These rules are known as transfer of business.
When does a transfer of business occur?
When an employee is transferred to an employer that is an associated entity (S50AAA of the Corporations Act 2001) of the previous employer, service with the previous employer will be deemed to be continuous for the purposes of all service-related National Employment System employer.
It is important to seek advice from either a solicitor or accountant. Ask them, when the due diligence process is undertaken, for the amount of employee entitlements that need to be considered as either a liability or an asset.
This is important as the new owner may become liable for any entitlement, like sick leave, annual leave or long service leave that employees take once they own the business.
Compliance
NSW Industrial Relations conducts regular visits to workplaces across the state to provide information and advice about employer and employee rights and obligations. This role will continue under the National System from 1 January 2010.
Inspectors for NSW Industrial Relations will have dual authority (NSW and Fair Work Inspectors). Inspectors will be visiting employers which have been identified as transitioning to the National System. Transitional Education Visits will be undertaken throughout 2010 in order to educate employers that are affected by the changes.
The visits will be part of an ongoing educational and compliance program aimed at assisting in the transition period. The primary focus is ensuring that employees and employers in New South Wales understand their rights and obligations. This will be achieved through workplace visits, seminars, workshops, publications and online services.
Investigations of alleged breaches of the Fair Work Act will be investigated by the Fair Work Ombudsman please refer any industrial complaints to Fair Work Online.
Workplace inspections
A Fair Work Inspector may need to inspect your workplace in response to a complaint or as part of an audit campaign to ensure compliance.
About Fair Work Inspectors
Fair Work Inspectors from the Fair Work Ombudsman (FWO) and NSW Industrial Relations are government officials responsible for investigating and enforcing compliance with national workplace relations laws.
Inspectors are independent and impartial and have no bias toward one outcome over another.
Employer associations
Members of employer associations are generally employers who operate in the same or related industries. These associations represent the industrial (and sometimes the commercial or trade) interests of their member companies and organisations.
Employer associations are usually respondents to the awards covering their members' employees. In Australia, employers' associations can be registered under the various state and federal acts as industrial organisations or unions.
Links to Employer Organisations
- Australian Business Limited (ABL)
- Australian Chamber of Commerce & Industry (ACCI)
- Australian Industry Group (AIG)
- Australian Mines & Metals Association (AMMA)
- Business Council of Australia (BCA)
- Chamber of Commerce (NSW)
- Chamber of Commerce & Industry - ACT
- Chamber of Commerce & Industry - NT
- Chamber of Commerce and Industry - QLD
- Chamber of Commerce & Industry - TAS
- Chamber of Commerce & Industry VIC (VECCI)
- Chamber of Commerce & Industry - WA
- Employers First
- Graphic Arts Services Association of Australia
- Printing Industries Association of Australia
Taxation and superannuation
Taxation and other pay deductions
Deductions may be required by law
Some laws require employers to deduct money from employees' pay. The most obvious example is the requirement under Federal income taxation laws to deduct income tax instalments from employees' remuneration.
For more information about taxation deductions contact the Australian Taxation Office.
Courts and agencies may order pay deductions
Some courts are empowered to order employers to deduct money from employees' pay. This is known as a 'garnishee order'. Some Federal agencies, including the Child Support Agency can also order an employer to deduct money from an employee's pay. In these circumstances, the employer will receive a formal notice from the court or agency, which explains the required deductions.
Awards may permit an employer to deduct pay
Some awards and enterprise agreements permit employers to deduct money from an employee's pay for specific items provided to the employee. Common circumstances include the costs of accommodation/lodging or services provided to the employee.
Employers should contact the Fair Work Infoline on 13 13 94 to check whether the relevant award allows deductions.
Superannuation
The Superannuation Guarantee affects all employers and most employees. The minimum amount of superannuation support to be provided for employees is 9%
Superannuation contributions must be made into a complying superannuation fund or Retirement Savings Account (RSA), such as the Australian Superannuation Savings Employment Trust (ASSET) or the Health Employees Superannuation Trust Australia (HESTA) or an alternative complying superannuation fund.
Workplace safety and workers compensation
Workplace safety
All workers can contract illness or disease, or sustain injuries from accidents as a result of their day to day work activities. The management of occupational health and safety (OHS) in the workplace aims to reduce the likelihood and severity of illness and injuries at work.
Occupational health and safety legislation is administered by WorkCover in NSW.
WorkCover NSW is a statutory authority within the portfolio of the Minister for Finance. Its primary objective is to work in partnership with the NSW community to achieve safe workplaces, effective return to work and security for injured workers.
Workers’ compensation
Workers’ compensation provides valuable protection to workers and their employers in the event of a workplace-related injury or disease. Through workers’ compensation, injured workers can receive weekly payments to cover loss of earning capacity and payment of medical expenses. They may also be eligible to receive vocational rehabilitation expenses, where necessary, to assist them return to work.
All NSW employers must have a workers compensation policy to insure themselves against compensation claims for workplace injuries.
WorkCover NSW regulates the New South Wales workers compensation system. The system is comprised of:
- The New South Wales Workers Compensation Scheme
- Self and Specialised Insurers who bear their own liabilities and claims risk
- Treasury Managed Fund
Pay slips
Both NSW and federal industrial relations laws require employers to provide employees with pay slips and to keep certain time, wage and leave records.
How should employees be paid?
Employee's pay (including overtime) must be in cash or by cheque or electronic funds transfer. However, if the employee is paid by cheque or electronic funds transfer they must give their approval to be paid in this way. The employee's award or enterprise agreement may list the method of payment.
What information should be on an employee's pay slip?
An employer must provide employees with pay slips each time they are paid. The pay slip must contain the following information:
- name and ABN of the employer
- name of employee
- classification of the employee under their award or enterprise agreement - including full-time, part-time and casual status (recommended only)
- date when the payment was made
- period of employment to which the payment relates
- the amount of money paid before tax (gross amount) (including overtime and other payments)
- amount paid as overtime or information to allow the employee to calculate the amount of overtime
- amount deducted for tax
- any amount deducted by the employee for superannuation
- particulars of all other deductions
- amount paid after tax (net amount)
- If the employee is paid an hourly rate - the ordinary hourly pay rate and number of hours worked at that rate and the amount of pay at that rate
- If the employee is paid an annual rate (salary), the rate as at the last day in the pay period
-
If you are required to pay superannuation contributions for your
employee’s benefit, they should include:
- the amount of each superannuation contribution made during the period to which the pay slip relates, or the amounts of contributions that you are liable to make; and
-
the name or the name and number of the superannuation fund
you put or will put superannuation contributions into.
See a sample pay slip.
When are employees to be paid?
Awards and enterprise agreements usually list how often an employer must pay their employees (weekly, fortnightly etc). Casual employees can be paid at the end of each day's employment. However, if an employee requests it the employer must pay them at least fortnightly.
Superannuation Contributions
If an employer is required to make superannuation contributions for an employee according to an award or enterprise agreement, the employer must keep the following records:
- amount of contributions made*
- period over which contributions are made*
- when the contributions are made*
- name of the fund or funds to which the contributions are made and whether that fund is specified in the award or enterprise agreement or by the employee.
These records are not required in the cases of contributions to a defined benefit superannuation fund within the meaning of the Occupational Superannuation Standards Regulations of the Commonwealth Government.
Leave entitlements
From 1 January 2010 all NSW private sectors employers will join the national system.
NSW Industrial Relations will continue to provide information on the NSW Long Service Leave Act 1955. This act entitiles full-time, part-time and casual workers in New South Wales to paid long service leave after working for an unbroken period of ten years with an employer.
Leave entitlements depend on whether the employee is employed on a permanent, part-time, temporary or casual basis.
Payroll tax
Extension of time to pay your December payroll tax return
The due date for payment of the December return has been extended to Thursday 14 January 2010.
When are wages liable? (new nexus provisions)
From 1 July 2009 the process of determining liability for payroll tax has been changed to specify the employee’s principal place of residence as the primary nexus where employees perform services in more than one jurisdiction during a month.
When the employee does not have a principal place of residence in Australia, or where it cannot be identified, the employer’s ABN registered address will be used.
It is recognised that there may be transitional and implementation issues for some employers who may have to make changes to their payroll systems. In NSW, it is permissible for anyone facing such transitional issues to make any necessary adjustments without penalty as part of the annual reconciliation process for the 2009/10 assessment year.
It is stressed that these changes only affect wages for workers providing their services across jurisdictions. Where a worker provides their services solely in one jurisdiction, as is the case for the majority of workers, tax will continue to be paid to the jurisdiction where those services are performed.
More information
From 1 July 2009 to 30 June 2010 the threshold is $638,000
From 1 July 2009 to 31 December 2009 the rate is 5.75%
From 1 January 2010 to 30 June 2010 the rate is 5.65%
Employers, or a group of related businesses, whose total Australian wages exceed the current NSW monthly threshold, are required to pay NSW payroll tax.
Monthly threshold
28 days = $48,942
30 days = $52,438
31 days = $54,186
Each monthly payment or 'nil' remittance is due seven days after the end of each month or the next business day if the seventh day is a weekend or public holiday (ie August payment is due by 7 September). The annual reconciliation and payment or 'nil' remittance is due by 21 July.
More information
Registering for payroll tax
When to register for payroll tax
Employers, or a group of related businesses, whose total Australian wages exceed the current NSW monthly threshold, are required to pay NSW payroll tax.
Monthly threshold
28 days = $48,942
30 days = $52,438
31 days = $54,186
As an employer you must register with OSR within seven days after the month in which your wages first exceed the current NSW monthly threshold. When you register we will advise you if you need to pay your payroll tax monthly or annually.
How to register for payroll tax
To register for payroll tax:
complete and lodge your application for registration online using the payroll tax online registration form.
Payroll tax arrangements for Government departments and authorities
Following the recent public sector reforms that resulted in the formation of 13 new super agencies, those departments and agencies which previously lodged separate payroll tax returns and paid a flat rate of tax (that is, without claiming a threshold) may continue to lodge separate returns under the arrangements that applied prior to the reforms. However, they should notify OSR of changes in name or other details (including any change in ABN). Where agencies have been amalgamated with another agency and will no longer be lodging separate returns, they should notify OSR, advising the date of the changes (including changes to their ABN) and details of the agency whose monthly return will include their wages. Any inquiries should be directed to 1300 139 815.
Allowances
Allowances are usually a specific amount paid in addition to an agreed salary, such as meal allowances, tool allowances, uniform allowances and overtime allowances. One of the largest areas of non-compliance with the legislation is in the declaration of allowances.
All allowances paid by an employer to an employee are liable for payroll tax except for the exempt component of allowances paid for overnight accommodation and use of the employee's own motor vehicle for work purposes.
Apprentice and trainee wages
Employers are required to include the wages and salaries paid to apprentices and new entrant trainees in their payroll tax calculation.
We administer an offset rebate scheme by allowing the rebate amount to be calculated and offset against both the monthly payroll tax payments and annual reconciliation calculation. This offset facility is provided through our online services.
Alternatively, if you use your own software or a commercial package such as MYOB to calculate your monthly payment, you have the option of either determining your own monthly offset or claiming it at the end of the financial year.
Bonuses, commissions, consultant payments
Bonuses
Bonuses that do not relate to any particular month are taken to be paid in relation to services performed in the month in which they are paid. So a bonus paid annually in June could relate to services rendered for the entire financial year or a bonus paid quarterly could be for the preceding three months.
There is no proportioning of bonuses across states or territories. If an employee works across different states or territories in a month, but receives their bonus in a NSW account, then the liability for payroll tax will be in NSW.
Example
1. An employee has a Victorian bank account but works full time in NSW in May and June. The annual bonus paid on 30 June then becomes liable for NSW payroll tax, as the employee worked only in NSW, in the month the bonus was paid.
2. An employee has a NSW bank account and receives an annual bonus on 30 June having worked in both Victoria and South Australia in June. All of the bonus is liable in NSW, as the employee is paid in NSW and did not work wholly in any one State or territory.
Contractor and consultant payments
The contractor provisions, were included in the legislation to tax contractor payments when contractors provide services similar to employees. There are six general exemptions and three specific exemptions available. The purpose of these exemptions is to filter out independent contractors who provide their service to the public generally. Read contractors for more information.
Commissions
Commissions are all payments based on sales and are liable even if they are the only payments received by an employee.
Bonuses, commissions, consultant payments
Bonuses
Bonuses that do not relate to any particular month are taken to be paid in relation to services performed in the month in which they are paid. So a bonus paid annually in June could relate to services rendered for the entire financial year or a bonus paid quarterly could be for the preceding three months.
There is no proportioning of bonuses across states or territories. If an employee works across different states or territories in a month, but receives their bonus in a NSW account, then the liability for payroll tax will be in NSW.
Example
1. An employee has a Victorian bank account but works full time in NSW in May and June. The annual bonus paid on 30 June then becomes liable for NSW payroll tax, as the employee worked only in NSW, in the month the bonus was paid.
2. An employee has a NSW bank account and receives an annual bonus on 30 June having worked in both Victoria and South Australia in June. All of the bonus is liable in NSW, as the employee is paid in NSW and did not work wholly in any one State or territory.
Contractor and consultant payments
The contractor provisions, were included in the legislation to tax contractor payments when contractors provide services similar to employees. There are six general exemptions and three specific exemptions available. The purpose of these exemptions is to filter out independent contractors who provide their service to the public generally. Read contractors for more information.
Commissions
Commissions are all payments based on sales and are liable even if they are the only payments received by an employee.
Directors Fees and other payments
Directors fees are liable and are to be included in the company's wages, in respect of the month in which these fees are paid or are payable.
A difference exists between working and non-working directors only in relation to allowances, and the provision of meals and quarters. Bona fide allowances paid to non-working directors for expenses incurred in carrying out the duties of their office are not treated as remuneration and so are not subject to payroll tax. Similarly, the value of quarters and/or meals provided to non-working directors is not included.
Where such allowances are paid to salaried working directors, the amount of those allowances is to be included in the wages total for payroll tax. Similarly, the value of quarters and/or meals provided to these directors is to be included in the wages total, unless those payments are reimbursements of expenses against receipts.
Employment agencies
Provisions
Employment agents are liable for payroll tax on all employment agency contracts that are not contracts of employment between the contract worker and the client. That is, liability arises where the agent has an ongoing interest or role during the period of 'employment'.
If an agent only receives a 'one-off' fee to place a person with an end-user employer under a contract of employment between the contract worker and that employer, the provisions do not apply. This is because the employer of that worker accepts the employer/employee relationship, and is responsible for any liability.
The provisions define an employment agency contract as a contract under which a person provides a contract worker for a client and as a result receives payment, either directly or indirectly. A contract worker includes a natural person, partnership corporation or trust.
An employment agency contract is not a relevant contract under the contractor provisions. This means that none of the contractor exemptions apply.
The provisions apply equally to employment agents and labour hire firms and provide certainty because:
- the person who provides the worker is the liable employer
- the monies received by the worker are the liable wages
- none of the relevant contractor exemptions apply.
What is liable?
Any monies, benefits and superannuation contributions paid/payable to or on behalf of the contract worker are liable wages for the employment agency.
What is not liable?
Where an employment agent only receives a 'one-off' fee to place a person with an end-user employer under a contract of employment between the contract worker and that employer, the agent is not liable in respect of that contract. This is because the employer of that worker accepts the employer/employee relationship, and is responsible for any liability.
Agency/labour hire firm contracts are not liable for payroll tax where the end-user client of the agency signs an approved declaration form stating they are an employer paying exempt wages (such as public hospital or charitable body).
Employment termination payments
A payroll tax liability arises if an ETP is paid or becomes payable by the employer, and the employee would pay income tax if the ETP had been paid to the employee.
In some cases an ETP may be payable to the employee but it is not actually paid to the employee.
The amount of the ETP that is subject to payroll tax is the amount that would be subject to income tax in the hands of the employee.
Summary of payroll tax liability
Type of lump sum payment
Liability
Termination payments in respect of unused annual leave, sick leave, long service leave or a bonus or loading related to that leave
Taxable
Act of grace redundancy payments ('golden handshakes') paid to employees after termination
Taxable
Act of grace redundancy payments ('golden handshakes') paid to directors and contractors
Taxable
Payments in lieu of superannuation
Taxable
Payments for notice period worked by employee or contractor
Taxable
Payment in lieu of notice
Taxable
Non-cash payment in satisfaction of an ETP that is only subject to payroll tax if paid or payable on or after 1 July 2002
Taxable
Compensation for loss of job or wrongful dismissal - Lost earnings component
Taxable
Income taxable component of approved redundancy or early retirement scheme payments
Taxable
'Genuine' superannuation lump sum paid on retirement
Exempt
Compensation for loss of job or wrongful dismissal - amount for 'personal injury', eg damage to reputation
Exempt
Income tax-exempt component of redundancy or early retirement payments
Exempt
Capital payment for contract in restraint of trade eg restriction on who the terminated employee can work for
Workers Compensation
Workers compensation
2% Approx
Workers compensation provides protection to workers and their employers in the event of a work related injury or disease. Through the workers compensation system injured workers may have an entitlement to weekly payments, lump sums for permanent impairment (and pain and suffering where applicable), payment of medical bills, provision of legal assistance to pursue a claim and intensive rehabilitation assistance.
All NSW employers must have a workers compensation policy to insure themselves against compensation claims for workplace injuries if they pay more than $7,500 in wages, employ an apprentice or trainee, or are part of a group for premium purposes.
Obtain a quote
http://www.gio.com.au/gio/commercial/workers_compensation/workers_quote.html
Superannuation
Superannuation Guarantee Obligations
As an employer you have an obligation to pay super contributions on behalf of all your eligible employees. These contributions are in addition to your employees’ salaries and wages.
9%
This compulsory contribution is called the superannuation guarantee and it requires you to:
- pay super for your eligible employees
- contribute to the correct super funds, and
The minimum super amount you have to pay is 9% of each eligible employee’s earnings base. Your employee’s earnings base is generally their ordinary times earnings, from 1 July 2008 ordinary time earnings should always be used.
Generally, you have to pay super for your employees if they:
- are aged between 18 and 70
- are paid $450 (before tax) or more in a calendar month, and
- work full-time, part-time or on a casual basis.
You also have to pay super for any employee who:
- is under 18 years of age
- you pay $450 or more (before tax) in a calendar month, and
- works full-time, part-time or on a casual basis for more than 30 hours in a week.
You may also have to pay super for any employees who are visiting Australia on a temporary resident visa.
Superannuation
A superannuation contribution is defined as a wage.
The legislation includes a definition of a superannuation contribution as money paid or payable by an employer in respect of an employee:
a) to or as a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 of the Commonwealth, or
b) as a superannuation guarantee charge with in the meaning of the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth, or
c) to or as, any other form of superannuation, provident or retirement fund or scheme including. Superannuation Holding Account Special Account, a retirement savings account and a wholly or partly unfunded fund or scheme.
All superannuation payments made by an employer as a superannuation contribution are liable, including salary sacrifice arrangements and lump sums paid on behalf of a class of employees. Superannuation payments made to contractors retained under a relevant contract are also taxable as wages.
If the employees of a business elect to contribute money into a fund administered by the employer out of their own PAYG post tax pay then these payments are not liable as they are not employer contributions to the fund.
Dismissing an employee
What is the best way for both the employer and the employee?
How can an employment contract be terminated?
Do I have to give the employee notice?
What should I pay an employee when he or she is dismissed?
Sample statement of employment history
Are there any circumstances when I cannot dismiss an employee?
How do I dismiss an employee?
A valid reason must exist for an employer to be able to dismiss an employee. The reason or reasons must be based on the employee's poor performance, conduct or changes to the operational requirements of your business.
What is the best way for both the employer and the employee?
If an employee is being dismissed for financial reasons, provide information showing why you must take this action. If you don't provide this information, you run the risk of the employee thinking you are making up a reason just to get rid of him or her. Your employee will probably appreciate the business necessity, but he or she will need to be assured that this is the real reason.
If the employee is being dismissed because of managing performance, then their work history must justify your action. But please note, just because an employee has been through a system of counselling and warnings about their poor performance, the dismissal is still likely to be a shock. You must take the time to make sure the employee understands your reasons.
If the employee is being dismissed for misconduct be sure of your grounds - get legal advice or contact your employer organisation. You should still try and ensure the employee understands your reasons as it can save problems later.
You must make sure that the employee is totally convinced that the decision is final. If the employee leaves the meeting thinking that there is still a chance then you have failed. You have also created a situation where the employee's false expectations can turn into a belief that he or she has been wrongfully dismissed and a desire to punish you legally.
How can an employment contract be terminated?
An employment contract can be terminated by:
- an employee resigning (which usually requires the employee to give notice of their intention to resign)
- completion of a fixed term contract (when the date stated by the contract is reached) or completion of a fixed task contract (when the project the employee has been employed specifically to complete is concluded)
- an employer who, due to operational reasons, terminates an employee on the basis that the employee is redundant to the organisation's operations, or
- an employer who dismisses an employee.
Do I have to give the employee notice?
In general, it is better to give written notice of the termination, outlining the details of why the termination is occurring and giving the required notice period specified under the appropriate award, agreement or as contained in the National Employment Standards.
To avoid any misunderstanding or dispute, notice should be given to your employee in writing or perhaps in front of a witness, even though this may not be a requirement of the relevant award.
What should I pay an employee when he or she is dismissed?
This is not the time to make an employee wait for any money they are owed. Make sure you pass on any entitlements you are required to pay. Again, any difficulties at this stage will increase the employee's bitterness and could result in unnecessary legal expenses for you.
Except in special cases, you cannot legitimately "stand-down" an employee without pay and special termination provisions apply if you wish to introduce technological change.
You should also provide the employee with a written statement indicating the period of his or her employment, job classification and the type of work involved. This will be needed by the employee if they need to apply for unemployment benefits or as proof of experience when applying for another job.
You are also required to provide a group certificate for taxation purposes within 14 days of the date of the termination taking effect.
Sample statement of employment history
(Date)
Employer's Address
To whom it may concern
This is to certify that (name of employee) worked as a (job classification) doing (a brief description of the work undertaken by the employee) from (date of employment) to (date of termination).
Yours sincerely
(Signed by employer)Are there any circumstances when I cannot dismiss an employee?
You cannot dismiss an employee for any one or a combination of the following reasons:
- when your employee is temporarily absent from work because of illness or injury
- is a member of a union
- participates in union activities outside working hours or with your consent inside working hours
- does or does not want to be a member of a union
- is seeking election, or is an elected representative of the employees
- has filed a complaint against you or another employer about non-compliance with any laws or regulations
- has participated in legal proceedings against you or another employer
- has taken or wants to take parental leave, or
- race, colour, sex, sexual preference, physical or mental disability, marital status, age, ethnicity or religion.
How do we know what to pay our employees?
Leave Calculators
Working in NSW
A national industrial relations system
A national industrial relations system, more commonly referred to as the workplace relations system, was introduced on 1 January, 2010 to cover all private sector employees throughout Australia. There is now one set of common rules about conditions of employment, enterprise agreements and unfair dismissal across Australia for the first time.
The Fair Work Act 2009 is the legislation that now applies to all private sector businesses across Australia.
In NSW, employees of local councils, the NSW Public Sector and some state owned corporations remain under NSW industrial relations legislation. Some deemed employees, such as contract truck and courier drivers and taxi drivers also remain covered by NSW legislation.
For NSW workers employed by a sole trader or partnership that was covered by the NSW State award system prior to 1 January 2010, there is a 12 month transitional period that applies to some aspects of the Fair Work Act 2009.
What are the changes?
The ten National Employment Standards (NES), the unfair dismissal process and some general employment protections applied from 1 January 2010 and cover all NSW workers.
The previous NSW State awards are now called state reference awards and will continue to operate up until 31 December 2010. You can continue to use the information contained in the NSW State Awards section of this website until that time.
However, NSW workers previously under the state IR system (mainly sole traders and partnerships) should check the provisions of their state reference awards. Where the national NES entitlements are better than their state reference award, they should be receiving the benefits of the national NES from 1 January 2010.
Important note: From 1 January 2011, the state reference awards cease and the new modern awards will apply to you.
What if my employer is a Pty Ltd company?
If you work for a Pty Ltd business, your wages and conditions will be governed by the NES and appropriate federal modern award from 1 January 2010.
For information on which modern award applies to your workplace, contact the Fair Work Infoline on 13 13 94 or visit Fair Work Online
Starting work
What you need to know before you start work
Congratulations on being offered a job. Before you start work you will need to know the conditions you will be working under (including your pay rate) and exactly what you will be expected to do in the role.
The things you should be finding out about include:
Your letter of offer
Signing a contract
Your working conditions
The difference between trial work and work experience
Whether you are full-time, part-time or casual
Whether you are working under an award or agreement.
Getting paid
What should be my rate of pay?
Your rate of pay will depend on which award or agreement covers the work that you do. A national industrial relations system commenced on 1 January, 2010 which covers private sector employees throughout Australia. However not all of the new modern awards will have a pay rate attached to them until 1 July, 2010.
For workers previously in the NSW state industrial relations system, there is a transitional period, effectively this means provisions will remain unchanged until 31 December, 2010.
For workers previously in the federal industrial relations system, visit Fair Work Online or contact the Fair Work Infoline on 13 13 94 for assistance.
The wage clause in an award or agreement specifies the minimum wage that must be paid for each classification or grade of employee covered by that award or agreement, and each employee must receive this amount as a minimum.
Sometimes the actual minimum weekly pay consists of a normal award wage plus compulsory additional payments such as:
- allowances for working in a particular industry
- money to buy tools
- payment for very specific circumstances such as working in the wet or dealing with toxic substances
- extra pay (a ‘penalty rate’) for working outside ordinary hours at certain times of the week (such as on a Saturday or Sunday or outside the normal range of working hours on weekdays)
- extra pay (a ‘loading’) for casual workers.
Junior employees are sometimes paid a percentage of the adult rate, depending on their age.
The minimum wage
The lowest rate of pay that can lawfully be paid to an adult worker is referred to as a minimum wage.
Fair Work Australia (FWA) is responsible for setting minimum wages for employees in the national system. The tribunal is required to conduct an annual wage review each financial year and make a national minimum wage order.
The first annual wage review must be completed by 30 June 2010 and will take effect on 1 July 2010. The 2010 national minimum wage order must set a rate of pay for employees without coverage of awards or agreements (including a special national minimum wage for employees with disability and a casual loading) and may consider whether to vary rates of pay for employees covered by modern awards or transitional Australian Pay and Classification Scales.
The panel may also set a minimum wage for juniors, trainees and apprentices.
For more information on current federal minimum.My entitlements
From 1 January 2010, all private sector employers and employees in the national workplace system are covered by the new National Employment Standards (NES).
Under the NES, workers are entitled to certain minimum conditions. Along with their respective award, the NES provide a safety net for workers, that cannot be altered to the disadvantage them.
Under the new national industrial relations system, in addition to the NES, generally an employee’s terms and conditions of employment come from a modern award, agreement, award and agreement based transitional instruments (state reference award), minimum wage orders, transitional minimum wage instruments, state or federal laws.
What are the 10 National Employment Standard entitlements that apply to all NSW private sector workers?
The NES are set out in the Fair Work Act 2009 and comprise 10 minimum standards of employment. In summary, the NES involve the following minimum entitlements:
- Maximum weekly hours of work – 38 hours per week, plus reasonable additional hours.
- Requests for flexible working arrangements – allows parents or carers of a child under school age or of a child under 18 with a disability, to request a change in working arrangements to assist with the child’s care.
- Parental leave and related entitlements – up to 12 months unpaid leave for every employee, plus a right to request an additional 12 months unpaid leave, plus other forms of maternity, paternity and adoption related leave.
- Annual leave – 4 weeks paid leave per year, plus an additional week for certain shift workers.
- Personal / carer’s leave and compassionate leave – 10 days paid personal / carer’s leave, two days unpaid carer’s leave as required, and two days compassionate leave (unpaid for casuals) as required.
- Community service leave – unpaid leave for voluntary emergency activities and leave for jury service, with an entitlement to be paid for up to 10 days for jury service.
- Long service leave – a transitional entitlement for certain employees who had certain LSL entitlements before 1/1/10 pending the development of a uniform national long service leave standard.
- Public holidays – a paid day off on a public holiday, except where reasonably requested to work.
- Notice of termination and redundancy pay – up to 4 weeks notice of termination (5 weeks if the employee is over 45 and has at least 2 years of continuous service) and up to 16 weeks redundancy pay, both based on length of service.
- Provision of a Fair Work Information Statement – employers must provide this statement to all new employees. It contains information about the NES, modern awards, agreement-making, the right to freedom of association, termination of employment, individual flexibility arrangements, rights of entry, transfer of business, and the respective roles of Fair Work Australia and the Fair Work Ombudsman.
Leaving work
Giving notice
If you decide to leave your job (resign) you need to tell your employer in advance. This is known as ‘giving notice’.
Letter of resignation
It is best to tell your employer that you are planning to leave your job in a letter, so there is a written record of the date you gave notice to your employer. Make sure that you give them the required amount of notice as set out in your award or agreement.
Advance notice of resignation
Most awards and agreements will tell you how much advance notice you need to give.
It is important to check this because if you don’t give the amount of notice required, your employer can keep some of your wages for that period!
Other documentation
It is a good idea to ask your boss for a certificate of service and a written reference before you leave.
Ending a fixed contract
A fixed contract is a contract for employment that is fixed for a certain period of time or for a particular task or project.
The end date of a fixed contract should be included in the contract, along with the other terms and conditions of employment such as the notice period required if the task or project ends earlier than expected and all other circumstances that would allow the contract to end.
If the contract has to end before the stated date, your employer should give you a written statement outlining when and why the contract is ending.
Young People at Work
Here's some practical stuff that will help you get a headstart on finding a job!
Not sure about your workplace rights? Confused about what entitlements you should receive? This info should help!
Want to move on or been sacked? Check out the info here.
Young worker's interactive best practice guide [Fair Work Ombudsman Video]
To help ensure you get a proper deal when you start your job, it is important to find out about your rights and entitlements and what responsibilities you may have in your workplace.[Money Stuff website]
Take the challenge to be Master of the Mall. Have fun while you find out about your workplace and consumer rights.
Payroll SoftwareM.Y.O.B. Recommended
Payroll Auditing & Security
Payroll
Payroll is the payment of wages, salaries, benefits, allowances and any other monies entitled to staff working in a public agency. Some agencies have contracted out the payroll function, while others run their own payroll.
The sizable sums of money involved in the payroll function have traditionally been a target for theft and fraud.
Corruption risks in the payroll function mainly relate to the integrity of the information on which the payroll is based, particularly if the payroll function is performed by a third party under contract. The security of the manual and electronic processes for transferring money and the security of the information contained on the payroll system are also vulnerable aspects of the payroll process.
The improper conduct of an agency's payroll function can constitute corrupt conduct as defined by the Independent Commission Against Corruption Act 1988.
Corruption risks
A risk assessment of payroll in a public sector agency may identify some or all of the following corruption risks:
-
An employee obtaining payments to which they are not
entitled, for example by:
- fraudulently claiming on their timesheet for hours not worked or allowances to which they are not entitled
- failing to provide a leave form for leave taken
- colluding with other staff to cover unauthorised absences
- providing false information for the reimbursement of expenses not incurred or above approved entitlements
- fraudulently claiming worker's compensation.
- An employee directing payments to themselves by creating and paying a non-existent public official ("ghosts" on the payroll).
- A manager drawing up a biased roster, for example, allocating the most profitable shifts to favoured employees.
- A manager rostering unnecessary staff on shifts in order to increase payments to them.
- An employee stealing money directly from the payroll.
- An employee improperly disclosing personal or banking details (this behaviour may be the result of bribery).
Managing corruption risks
As a minimum your agency should:
- Introduce policy and procedures for payroll that contain elements listed in the Policy Development Guide and Checklist (see Tips and tools below).
- Include in the policy sanctions for any breach of the policy and procedures.
- Review the policy every two years.
- Refer to payroll in all relevant corporate documents such as codes of conduct.
- Train all relevant employees in the policy and procedures to ensure they are aware of their responsibilities.
- Include payroll as a risk to be assessed in the agency's internal audit and corruption risk management processes.
Following your risk assessment of payroll systems consider these risk management strategies:
- Following appropriate delegations and procedures for any changes to pay and timesheet transactions.
- Establishing access controls for the payroll system such as passwords, routine verification procedures and authorisation levels.
- Segregating functions to ensure that no one person has complete control over any aspect of the payroll process.
- Ensuring mandatory advance approval by the supervisor for variations to payroll such as overtime and leave.
- Verifying and reconciling employee entitlements such as sick leave.
- Imposing financial limits on overtime, allowances and payroll processing.
- Conducting unannounced spot checks by managers to verify attendance and timesheets.
-
Ensuring the payroll system has the capacity to:
- automatically integrate employee exits to cease payroll payments to departing employees
- run fortnightly expenditure reports
- recognise and notify line management of anomalies and overpayments
- recover overpayments.
- Ensuring high-risk positions (such as payroll administrators) are adequately supervised.
- Routinely reviewing and testing data processing controls.
-
Reviewing the recordkeeping and reporting procedures to
ensure that:
- there are controls or systems to record and monitor all payroll transactions.
- all access to the payroll systems and actions taken are recorded.
- records are kept of overtime approvals, staff rosters, travel and expenses including approvals, receipts and supporting information.
Case studies
Case study 1: Phantom employees
The Australian Institute of Criminology (AIC) cites1 an example of a 1970's case in the United States in which an employee of a welfare department stole US $2.75 million over a nine-month period by entering data about non-existent employees into the department's computerised payroll system. He then intercepted the salary cheques sent to the "phantom" employees and fraudulently endorsed them to himself.
The AIC proposed prevention strategies that included increasing security controls on the computerised systems, improved monitoring of employees and introducing sanctions and detection mechanisms to act as a deterrent to such behaviour.
Case study 2: Timesheet fraud
In 2008, an ICAC investigation revealed evidence of extensive payroll fraud in a large public sector agency in the form of false timesheet entries and travel claims.
In one instance, a work gang claimed payment for the period 8 pm to 6 am, despite all having left the site at 12.30 am.
One employee dishonestly obtained at least $33,430 in a 15 month period by overstating the hours he worked.
Another employee submitted fabricated accommodation receipts for himself and his work team to the value of approximately $50,000 over three years. He believed that these receipts were never checked by anyone and would not be detected.
Payroll officers did sometimes detect timesheet irregularities but when they refused to process questionable claims, they were berated by employees and managers.
The ICAC's report identified the need for supervisors and management to implement agency policy and support payroll employees when they detect non-compliant paperwork including challenging the individual concerned and if necessary reporting the conduct.
Frequently asked questions
Why are payroll systems important for preventing corruption?
Payrolls can be an attractive target for corruption in an organisation but they can also be a useful detection tool. As they generate an auditable record of all transactions, automated payroll systems can be used to identify unusual or irregular payments that could indicate corrupt activity. The knowledge that these records are reviewed regularly will deter some potential perpetrators.
Automated systems can also act as barriers to corrupt conduct if they incorporate controls that reflect the agency's delegation levels such as permitting only those with authority to approve leave, overtime and other payroll exceptions.
Are automated payroll systems more or less vulnerable to corruption?
The answer is probably 'both'. Automated payrolls can help manage corruption risks for the reasons mentioned in the previous answer. However, because electronic information can be easily disseminated and manipulated payroll systems will need the same kinds of security and controls to address the risks inherent in any electronic information system.
Is outsourcing the payroll function a corruption risk?
As with any other outsourcing decision the risks to the agency of having an outsourced payroll function should be assessed beforehand. The risks lie mainly in the need to maintain the security of information transferred to the outsourced provider.
Outsourcing can be a useful prevention mechanism in situations where it is important to reinforce the separation of payroll functions from the rest of the agency. This might be necessary in situations when pressure is put on payroll staff by operational or line staff to act improperly.
Rostering
A roster is a plan that organises staff. It will show which staff members are to work where and at what times.
Why is Rostering Important?
Rostering is important because you are ensuring the right person is in the right job at the right time
Industry relies heavily on service staff and it is very important to get the right staffing levels whilst still achieving your desired level of service and not exceeding the wage budget.
When we are making a roster we need to ensure that the relevant award or agreement provisions are being followed.
When creating the roster ensure you have thoroughly read through the award or agreement to make sure you are following the guidelines.
5 Major Reasons for having Rosters
CCOAE (Rhyme to remember)
Controlling Costs
Communication
Organising
Aiding employees
Efficiency
Controlling Costs
An effective roster will control labour costs. It will make sure there are adequate levels of staff in the bust periods and less in the quieter periods.
The roster will balance the labour cost and the service standard
Communication
The roster is a tool for communicating with your employees. Through the use of a roster staff can be informed when they will be required to work and when they will not be required.
Many rosters will also communicate to the employee what section they will be working in and the expected business levels.
Organising
The roster organises the staff. It lets the manager or supervisor know who is working where on any particular shift. They can then distribute the workload fairly and organise appropriate break times.
Aiding Employees
A roster will help employees to manage their personal life around their work life. It lets them plan days off and holidays in advance.
Efficiency
A roster gives the business efficiency by ensuring a balance of staff. It balances skilled workers with those who have less experience.
A roster will ensure there is always an adequate number of service staff with the appropriate skill level.
Who should create the roster?
Rosters should generally be created by a supervisor or manager. They must have an understanding of predicted business volume, wage budgets and the staff members’ skills, abilities and sometimes special requirements.
Rosters can be created for a whole enterprise, individual department, or a specific project like an event.
Information we to know when creating the roster
Award or Agreement Provisions
Employee Record Card
Staff Availability form
Request for days off diary
Business Diary/Calendar noting bookings or special events
Expected business volume data
Labour Budget
Understanding of staff skills and abilities
Develop rosters in Accordance with Relevant Award provisions
Types of employees
Classifications and Wage Rates
Penalties
5 hours and a break
Spread of hours
10 hour beak rule
Leave
Award Provisions – Types of Employment – Full-time
Work 38 hours per week
Overtime paid for any hours additional to these 38
Regular and predictable hours of work
Paid annual leave of 4 weeks, paid personal leave, unpaid maternity & paternity leave
Receive penalties for work completed Monday to Friday outside the hours of 7am – 7pm.
Award Provisions – Types of Employment - Regular Part-time
Works less than 38 hours per week
Paid at an hourly rate respective to their ‘grade’
Entitled pay and conditions of a full-time employee but at a pro-rata rate
Must be rostered for a minimum of 3 consecutive hours on shift
Generally regular and predictable hours of work
Receive penalties for work completed Monday to Friday outside the hours of 7am – 7pm.
Employee Availability Sheet
An employee availability sheet is another piece of information we need on hand when creating a roster. We need to do this to make sure we roster staff when they are available.
When an employer gives out an availability sheet they should put some minimum terms and conditions on the sheet. This will ensure staff is available to work the busier shift and weekends.
Business Volume
Working out your business volume will help to maximise operational efficiency and customer service levels whilst minimising wage costs in roster development.
Business volume is working out your predicted number of patrons (covers) during specified time periods. You can obtain your business volume readings from your POS (point of sale) or you can work it out manually.
Once you have worked out your business volume you can then determine how many staff you should need on shift at any one time.
Most hospitality establishments will follow a basic ratio of staff to guest.
For example during breakfast they might require one waiter to every 20 patrons.
Once you have worked out your expected business volume, no of staff needed per time period you can plot timelines. See the following pages for a sample business volume activity and timelines.
Creating the roster
Once you have plotted the timelines you can then start to allocate your staff to the shifts.
Before you allocate the staff you need to know which staff will be available (use the staff availability sheet) and what their skills and abilities are. You will also need to ensure a balance of staff rostered.
Understanding of staff skills and abilities – Utilise Available Staff Base
When rostering we need to utilise the available skills base appropriately to roster the most effective mix of staff and to meet different operation requirements.
· The mix of staff rostered on any one shift should compliment each other.
· This mix of staff can be obtained by mixing:
· Males & Females
· Trainees and more experienced staff
· Language skills and nationalities
· Ages
Understanding of staff skills and abilities – Combining Duties
Combine duties where appropriate to ensure effective use of staff. Combining duties allows you to multi-skill staff. This will maximise their skills and provide a higher level of service for the guest.
The purpose of combining duties is to ensure your full-time and part-time employees will always have work.
As an employer you will also be able to save on casual wages during the off peak times.
Multi-skilling staff or hiring multi-skilled staff will allow you more flexibility and ease with rostering.
Understanding of staff skills and abilities – Mixed Functions
When multi-skilling staff we must be aware of the ‘mixed functions’.
If a higher level employee takes on the job of a lower level employee they shall still get their normal higher pay rate but if a lower level employee takes on the jobs of a higher level employee for 2 or more hours in one day, they will get paid at the higher rate all day. If less than two hours they just get the higher rate of pay for those hours worked at the higher level.
Presenting Rosters in required Formats?
· Roster Layout
· Roster Codes
· How many days notice do staff need?
· The best way to communicate the roster
· Can your employer make amendments to the roster?
Roster Layout
The roster must show surnames and at least initials of each employee.
The roster should show start and finish times for full-time and part-time employee.
The roster must clearly show RDO’s and days when casual staff are not required.
Breaks should be identified
Days of the weeks and dates should be clearly identified
Roster Codes
OFF- Day OFF (full-time & Part-time staff)
NR- Not Required (casual staff)
RDO – Rostered Day Off
ADO – Accrued Day Off
LSL – Long Service Leave
AL – Annual Leave
NA – Not available for work, often used for casual staff
Pub Holiday – Public Holiday (meaning staff is not required)
SL – Sick leave
TRG – Staff is attending training
Mat – Maternity leave
Communicate rosters to appropriate colleagues within designated timelines
· The roster should be posted on a Notice Board if the establishment has 5 or more full-time staff.
· It must be conspicuous and accessible by all employees.
· Should be posted 2 weeks in advance.
· If changes are made to the roster the employee must agree to the changes and they should be given 14 days notice of these changes.
Develop Rosters in Accordance with relevant wage budgets.
TLC = Total Labour Cost
TLC = All the cost incurred by the business associated with employing staff
These costs are
· Wage/salary cost
· Payroll Tax
· Superannuation
· Workcover
Therefore TLC = weekly wage/salary + Payroll tax + Superannuation + Work cover
Develop Rosters in Accordance with relevant wage budgets.
All establishments will generally have a set wage budget, this can be shown as TLC%. Most hospitality business will aim to keep their TLC% around the 30%. Obviously this figure will change depending on the type of service (etc) the employer wishes to give.
TLC% can be worked out using a simple formula
Total Labour Cost x 100
Total Sales 1
Costs involved in working out TLC - Payroll Tax
Payroll taxes are paid to the individual states or territories within Australia. They are taxes that directly related to employing a staff member. Payroll tax is not a deduction from the employees pay. The employer will pay payroll tax.
The amount of payroll tax paid depends on the state and circumstances. In NSW it is from 1 January 2009 to 30 June 2009 the rate of payroll tax will be 5.75%
From 1 July 2008 to 30 June 2009 the threshold is $623,000
Monthly threshold (Amount of payroll)
28 days = $47,792
30 days = $51,205
31 days = $52,912
This amount needs to be budgeted in to achieve and accurate TLC.
Costs involved in working out TLC – Superannuation
Superannuation is a government scheme introduced to support workers when they retire.
Employers are required to pay a minimum amount of superannuation contribution every year for every eligible employee.
Costs involved in working out TLC - Superannuation
Minimum Contribution is 9% of their gross wage.
This payment is a contribution/additional to their pay. It is not deducted from their pay.
Superannuation is can be claimed as an income tax deduction for employers
Costs involved in working out TLC - Superannuation Calculation
E.g. Sandra works 84 hours a month at $16/hr. She therefore earns $1,344 per month. The SG contribution is:
$1,344 x 9% = $120.96
http://calculators.ato.gov.au/SGCalculatorWeb/GetSGContribution.aspx
Costs involved in working out TLC - Superannuation Exempt Employees
Employers do not generally have to make superannuation contributions for employees who are:
· paid less than $450 in a month;
· aged 70 years and over;
· under 18 years of age and working 30 hours or less a week;
· performing work of a domestic or private nature under a contract for 30 hours or less a week;
· performing work outside of Australia; or
· working in Australia on certain types of executive visas.
Costs involved in working out TLC - Consequences for not providing Superannuation
If an employer fails to make the minimum payments they must pay the lump some as well as additional charges to the ATO at the end of the financial year.
This payment is called the superannuation guarantee charge. SGC
This charge cannot be claimed as an income tax deduction.
Costs involved in working out TLC - When does super get contributed
· Government has minimum standards of quarterly
· Host Plus requires monthly contributions from employers.
· It can be paid electronically, by mail cheque, cash over the counter at an office, by BPAY.
Costs involved in working out TLC - What does superannuation get paid into?
· Your employer will pay superannuation into:
· your nominated superannuation fund (e.g. HOST PLUS)
· A retirement savings account (RSA)
· The Superannuation Holdings Accounts Reserve (SHAR)
· On initiating employment you will join with the companies allocated superannuation fund, or you ask for them contribute into your own superannuation fund.
What is Host Plus
· Host plus is an industry superannuation fund
· One of Australia’s Largest funds
· Which means higher interest on investments
· Low/no employers fees
· No commissions
· Easier administration
· Over 905,000 members
· Over 52,000 employers
www.hostplus.com.au
Costs involved in working out TLC – Workcover
As an employer you must provide a safe workplace. If you employee workers and expect to pay wages of over $7,500 for the year then you need a worksafe injury insurance policy.
This payment is approx 2% of the employee’s wages. And once again it is NOT a deduction from the employee’s wage. It is paid on behalf of the employee.
All employers in NSW are required to pay workers compensation premiums. The NSW Workers Compensation Scheme is funded by the premiums paid by employers and provides medical and financial support of injured workers.
Workers compensation insurance premiums are based on a number of things, including:
· the industry in which the employer operates (the base industry premium rate reflects the costs of all compensation claims that have occurred in this industry)
· the amount of wages the employer pays to its workers
Summary of Costs that make up the total labour cost %
· Wages/salary
· Payroll tax 5%
· Superannuation Employer contribution 9%
· Workcover 2%
(Wages/Salary + Payroll Tax + Super + Workcover) ÷ Sales x 100