Managing payroll is getting more challenging, requiring effective management of systems as well as an in-depth understanding of regulations and legislation. The evolving nature of payroll compliance, with changing tax regulations, shifting deduction rules, and mounting reporting requirements, poses a substantial challenge for those in charge of payroll processes.
Recent data from the Australian Payroll Association (APA) revealed that a significant 31% of survey respondents faced uncertainty surrounding payroll compliance. This was compounded by a further 33% that are struggling with the interpretation of awards and enterprise bargaining agreements (EBAs). Left unaddressed, these issues could snowball into serious consequences, including steep financial penalties, tarnished reputations, and possible legal action.
Furthermore, payroll inaccuracies can lead to employee dissatisfaction, negatively impacting productivity and overall morale. Considering the Australian Bureau of Statistics (ABS) reports that nearly one-third of businesses struggle to find suitable staff, it’s now critical to employ out-of-the box solutions to ensure regular compliance.
Understanding the payroll legal framework
Achieving payroll compliance starts with a thorough understanding of the governing laws that regulate payroll and employment. There are three key pieces of legislation employers must familiarise themselves with across Australia and New Zealand.
In Australia:
- Fair Work Act 2009: The primary piece of legislation regulating Australia’s workplace relations system, it provides a safety net of minimum entitlements, offers flexible working arrangements and fairness at work, and prevents discrimination against employees.
- Work Health and Safety Act 2011: This act sets out the law governing health and safety in the workplace. It establishes a framework to protect the health, safety, and welfare of workers and the public from hazards present at work.
- National Employment Standards (NES): As part of the Fair Work Act, the NES outlines 10 minimum employment entitlements that must be provided to all employees. These cover a range of areas including maximum weekly hours, flexible working arrangements, and various types of leave (annual, personal, parental, etc.).
In New Zealand:
- Employment Relations Act 2000: This is the main legislation governing employment relationships in New Zealand. It outlines the rights and obligations of employees and employers, covers collective bargaining and unions, and provides for personal grievance procedures.
- Health and Safety at Work Act 2015: Sets out the principles, duties, rights, and responsibilities of business owners and workers in relation to health and safety in the workplace. It aims to protect workers and other persons against harm to their health, safety, and welfare through the elimination or minimisation of risks arising from work.
- Holidays Act 2003: Specifies the minimum entitlements to annual holidays, public holidays, sick leave, and bereavement leave.
In Australia and New Zealand, businesses are also mandated by law to keep detailed and correct payroll records for a seven-year period. This range of records includes elements like payslips, employee agreements, rosters, and timesheets, which play a vital role during audits. Plus, it’s essential for businesses to uphold payment obligations, such as adhering to minimum wage standards, overtime, and penalty rates, in order to ensure that employees receive their rightful compensation. Employers must carefully and correctly calculate payments, not only to avoid legal issues but also to foster high employee morale.
The role of technology in streamlining payroll management
Technology can be a powerful tool for simplifying payroll processes and ensuring compliance. Cloud-based payroll software, for example, offers comprehensive automation capabilities that facilitate straightforward tax calculations, precise payslip generation, and hassle-fee reporting to relevant regulatory bodies. In fact, automated payroll software solutions can automatically update tax rates and other critical information based on the latest legislation. This dramatically reduces the administrative load and minimises the risk of human error. It also moves payroll employees away from mundane, manual tasks and into higher-value projects that directly contribute to future business growth and success.
Unlocking payroll potential, together
Managing payroll compliance is a challenging yet essential aspect of running a business in Australia and New Zealand. It requires a deep understanding of the governing laws, careful attention to payment obligations, effective use of technology, and diligent record-keeping. When these elements are combined with professional guidance, businesses can not only navigate the complexity of payroll compliance but also leverage it as a competitive advantage.
Affinity’s supported payroll service is a valuable asset to your existing payroll team. By unlocking the power of leading-edge payroll technology, we work in tandem to lift your payroll management to unprecedented levels. We understand the intricacies and time-intensive nature of running payroll, which is why we can seamlessly integrate with your internal payroll staff and offer expertise and guidance, along with access to a range of support services.
To explore how our supported payroll service can fit your business model, contact us today at enquiries@affinityteam.com
For over thirty years, Affinity has been a trusted partner for mid-market and enterprise businesses in Australia and New Zealand, empowering them to transform their payroll operations. With a focus on turning payroll from a cost into an asset, we have established ourselves as industry leaders in delivering innovative cloud-based payroll software and exceptional payroll services.
