Managing payroll is one of the most daunting and time-consuming tasks faced by most cafe owners today. Especially now that authorities have tighten up their nationwide audit campaign towards workplace compliance. Your cafe could be next.
Being certain that everything is accurately is a must. In addition, you also have to make sure that you are abiding to the latest mandated laws and regulations for your business.
To help you avoid slipping up with your payroll obligations, here are the 8 Proven tips you can adhere to so you can avoid payroll mistakes for your cafe business.
1. Take note of the pay rate changes
Every year pay rate changes and for this current financial year, the Fair Work Commission has announced a 3.5% increase in minimum wages
This means the country’s minimum hourly rate pay of $18.29 will now spike up to $18.93 for about two million workers. The increase amounts to an extra $24.30 for a 38-hour week, making the minimum weekly wage rise up to $719.2
This has been the highest minimum wage increase for the past 10 years. With that, Australia overthrown France from being the world’s highest minimum hourly wage according to the analysis of the Organisation for Economic Co-operation and Development data.
The cafe sector is covered by either Hospitality or Restaurant modern awards, and the 3.5% increase will be carried out on employees’ respective award rates.
Aside from that, there will be further changes to the Sunday penalty rates which have decreased by 10 percent while casual employees will continue to get the same rate.
2. Stay on top of the deadlines
In every aspect of your business, it is vital that you meet the appointed deadlines, especially if that involves compliance with the law like your payroll tax.
Payment of payroll tax is generally lodged and paid to state and territory Revenue Offices at an agreed frequency on either monthly, quarterly or annual basis
If you pay on a monthly basis, payment should be settled on the 7th day of the month following and this applies to all states. For the annual basis, the due for payment in Victoria is on the 23rd of July of the following year, while the rest of the states are on the 21st of July.
In case the specified due date falls on a weekend or public holiday, it will be moved on the next business day.
3. Keep up to date with payroll tax rates and thresholds changes
Just like pay rates, payroll tax rates and thresholds changes every year. It also varies between states and territories.
Not all businesses have payroll tax obligation that is why being mindful of the tax thresholds in your state is necessary. You only have to pay for it if your business exceeds the declared threshold in your respective state or territory
Miscalculating your tax is costly and time-consuming and being updated with the changes can help you avoid overpaying or underpaying the relevant authorities.
4. Be aware of the Modern Award
Modern award is an important aspect of any business, as it outlines all the terms and conditions of employment for most employers and employees.
As an employer, you have an obligation to make sure that you adhere to the modern awards that are applicable to your business to ensure that your employees are being paid at least the minimum wage they are entitled to do for their respective job.
You also need to work out the classification that applies to your employees based on the job they are performing.
The modern award covers the following terms that supplements the NES concerning:
- Minimum wage
- Overtime and Penalty rate
- Work arrangement
- Annualised wage and salary arrangement
- Allowances
- Annual leave loading
- Superannuation
- Procedure for consultation and dispute settlement
5. Don't forget about the National Employment Standard
Alongside with the Modern Award, You should also heed on the National Employment Standard under the Fair Work Act that is made up of the 10 minimum employment entitlements that are applicable to all employees in relation to:
- Maximum weekly hours
- Request for a flexible working arrangement
- Parental leave and related entitlements
- Annual leave
- Personal carers and compassionate leave
- Community service leave
- Long service leave
- Public holiday
- Notice of termination and redundancy pay
- Fair Work Information Statement
6. Practice good recordkeeping
Apart from the other payroll compliance requirements, as an employer also you have an obligation to keep a good set of records of your payroll information. Many mistakenly believe that their small business is exempted from this obligation.
Little did they know, regardless of the size of your business, every employer must keep a range of payroll compliance records for the span of 7 years. This will serve as a proof that their employees receive their correct wages and entitlements.
Here is the list of records that you should keep:
- General employment records
- Pay records
- Timesheets
- Leave records
- Superannuation contribution records
- Individual flexibility arrangement records
- Guarantee of annual earning records
- Termination records
- Transfer of business records
7. Know the new reporting framework
Speaking of compliance, there are changes in the way some employers need to report their payroll information.
If you had 20 or more employees working in your cafe on 1 April 2018, then you are required to comply with the new payroll data reporting system - Single Touch Payroll.
With this, you will need to report payments to the ATO such as salaries and wages, pay as you go (PAYG) withholding amounts and superannuation information from your payroll solution each time you pay your employee.
The new payroll reporting standard that started on 1 July 2018 is part of the Budget Saving (Omnibus) Act 2016 and will be expanded to include employers with 19 or fewer employees from 1 July 2019. This is subject to legislation being passed in parliament.
From July 2019, the ATO will pre-fill activity statement label W1 and W2 with the information they received from you.
When you report an employee's tax and super information through STP, the ATO will provide your employee with this information online through myGov.
8. Hire an Expert
If you are still reluctant that you’re getting things right with your payroll because of its complexity and unending changes, it’s best for you to seek for professional advice.
But if you’re struggling with your payroll, better have an expert on hand that profoundly understands payroll and your business’ unique payroll requirements.
In such a way, you can focus more on how you can grow your cafe and corner your market. You’ll also have a peace of mind that your payroll is running smoothly.
If you’re looking for a professional who can look after your payroll, Our team of experts here at Bookkeeping Central are more likely willing to help you ensure that you meet all your payroll needs inline with your compliance requirements.
You can contact us at 1300 855 763 or you can leave us a message here and we’ll ring you back.
BONUS: Want to free yourself from the burden of payroll complexities and have the confidence of keeping a compliant payroll? Click here to find out how.
