What is payroll?

One of the easiest ways you can upset your employees, and leave them feeling undervalued and annoyed, is to have a payroll system which doesn’t process their wages correctly. Nothing riles employees quicker and fair enough too! Most people rely on these wages.

That one word ‘payroll’ doesn’t convey the complex part of your business that it really is. It is easy to lump it together with other administration tasks without realizing the impact that it truly has.

What exactly is payroll?

Simply put, it’s the process of paying employees based on the hours they have worked. This includes leave entitlements, sick days, tax, and any benefits. It also may include sensitive information such as bank account numbers and employee personal details.
 
A payroll system pays the correct people the correct amount of money. If you have a very small business with one of two employees then it can be run by hand. However, it is commonly done using payroll software, or outsourced to an accountant or specialist provider. Gunson McLean can help you from the early stages of setting up a payroll system, through to training your employees on how best to use that payroll system.
 

The importance of a well-oiled payroll system

Payroll systems come in many shapes and forms from the cheaper end of the scale, suitable for a very small business, right through to full packages that only process payroll. Having a system that fits your business helps keep employees happy, and also reduces payroll tasks.

Generally, a payroll system includes these tasks:

·        calculating pay (which includes benefits and reimbursements)

·        taking out taxes and other deductions such as Kiwisaver contributions or insurances

·        paying taxes to Inland Revenue Department

·        keeping accurate records to show that all payroll requirements have been done correctly

·        making the payment of the net pay to the employee.

Having accurate records is critical as there can be hefty fines if records are not kept correctly. A managed payroll system helps to ensure you are up to date with any relevant employment laws and that you remain compliant. Another critical factor is that payroll data is sensitive. A managed system means that your businesses payroll data is safely stored in a secure cloud environment, meaning it’s less likely that it can be accessed by hackers.
 
If you wish to discuss your business payroll then get in touch. We can help from initial discussions through to setting up complete payroll systems leaving you more time for other things. Give Gunson McLean a call, we’d be happy to help.