28th September, 2018
So you’ve decided to hire your first employee. But before you bring anyone on board you’ll need to set up your payroll system (and your business) for success.
For the first-time business owner, payroll can too often become an afterthought as all the work that goes into selecting and training up a new hire takes priority.
This shouldn’t be the case.
A properly set up payroll system not only allows you to pay your staff, it will also serve as a key part of your financial reporting.
For that reason, choosing a payroll option that works seamlessly with your existing systems will guarantee efficiency and make your business a better place to work.
It will also make it that much easier for you when it comes time to hire a second and third employee.
Which leads us to the first point in getting your payroll sorted…
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A solid online accounting software will allow you to set up payroll in a matter of minutes.
This, in turn, will result in saving you hours – even days – of bookwork every month.
In terms of payroll-specific features, you’ll want to choose a system that allows you to pay your staff, pay their superannuation, organise timesheets and automatically calculate leave.
By choosing an online solution, as opposed to a desktop-based software or simply relying on spreadsheets, you’ll not only be able to monitor and process pay while on the go, you can also be confident that your business data is secure at all times.
Online services can also be kept up to date with changes in tax and payroll legislation so you’re always compliant. That means no awkward conversations with the ATO or Fair Work Australia.
MYOB Essentials is an example of a solution designed for small business that can do all this and more.
Once you’ve implemented such a system in your business, you’re ready for the next step in the hiring journey.
Getting the right fit for your business is much easier said than done, and it would take more than one article to discuss.
READ: 7 questions to ask your first hire
Instead, let’s assume you’ve managed to find the right person and you’re ready to begin introducing them to your business.
But before you can do that, you’ll need to introduce them to your business systems.
Your first port of call will be to order a Tax File Number Declaration Form, which can be done via the ATO website.
You’ll need to give your employee this form and ask them to complete it, as you’ll need this form in front of you when you come to set them up in your payroll system.
They’ll also need to supply you with any relevant forms for any variations of exemptions they’re planning to claim.
If you do happen to be using MYOB Essentials, you can find out how to set up an employee in detail here.
Once you’ve added an employee into your system, you’re nearly ready to complete your first pay run.
But there are a few settings in the system you’ll want to customise to make certain everything goes without a hitch.
Things like nominating the bank account you’re paying wages from, choosing whether you’re paying electronically, as well as some payslip display settings.
You’ll also want to indicate whether or not your business falls under section 57A of the Fringe Benefits Tax Assessment Act 1986.
If you’re using MYOB Essentials, you can discover more about configuring your payroll, manage leave and pay superannuation (and anything else you need to do with payroll) right here.
After that, you’re officially an employer ready to take on the next phase of your business’s development.
Not confident in getting all the details of payroll right all by yourself? Consult with an independent bookkeeper or HR specialist for complete peace of mind.