General information only, not financial or tax advice. Talk to a registered tax or BAS agent about your situation.
Key points
- Employment rules come from official sources, not from your bookkeeper
- Set up payroll records before the first pay run
- Keep employee details in your payroll software
Hiring a first employee changes the records a business keeps. This note covers the records side only. The rules about pay, leave and tax are set by government, and they change.
This is general information, not employment, financial or tax advice. For obligations, use the Fair Work and ATO websites or ask your adviser.
Find out the rules first
Before you set up payroll, check what applies to the role. Fair Work explains pay, awards and entitlements. The ATO explains what employers report and pay. Neither is something to guess at.
Set up the records
Once you know the rules, the records side is practical.
- Choose payroll software and add your bookkeeper as a user if you want help
- Enter the employee’s details in the software, not in a spreadsheet
- Agree a pay frequency and a cut-off for hours
- Decide who approves each pay run
Keep sensitive details out of email
Never email tax file numbers or passwords. Use the secure method built into your payroll software or the one your bookkeeper gives you.
What a pay run looks like
A pay run is prepared, checked by you and then approved. The software produces a payslip and a record for each employee. Your bookkeeper can prepare the run, but you approve it.
Leave and reports
Leave balances and payroll reports come from the same software. Review them each month, so a mistake does not run for a year.
When to ask for help
If you are unsure which award applies or how to treat a payment, ask Fair Work or your adviser before you pay.
General information only, not financial or tax advice. Talk to a registered tax or BAS agent about your situation.
Related
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Moving from spreadsheets to accounting software
A practical order of work for leaving a spreadsheet behind without losing the history.
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What month-end close means for a small business
Month-end close is a short routine that turns a month of transactions into a set of records you can trust.