Attention - Important Payroll information
Hello Business Manager
Thank you for your time reading following information regarding payroll services.
Traditionally, Australian employers process their payroll in-house, meaning that they pay one (or more) of their staff members to handle the payroll function. However, due to the increasing cost of labour and the inability of smaller businesses to derive economies of scale, this method is no longer the most efficient or effective.
Outsourcing the payroll function
More and more employers are learning the benefits of outsourcing their payroll function to an external specialist. The key benefits of outsourcing payroll are:
- cost effectiveness
- improved statutory compliance
- improved access to reports and information
- improved information security
- improved employer-employee relationships
- greater peace of mind.
For an explanation of these benefits, please read further below, or click here to watch a short video.
I would like to offer you a complimentary and obligation-free payroll review. It will give you some insight into your current payroll function, including compliance status and areas where your processes could be improved.
If you would like to arrange your complimentary review, please contact me via return email or on 02 40010979
The benefits of outsourcing payroll
1. Cost effectiveness
Did you know that the average cost to an employer with less than 200 employees to process their payroll in-house is $31.83 per payslip? For employers with less than 50 employees, this figure jumps to $157.31 per payslip.
In comparison, an employer with less than 50 employees who outsources their payroll pays just $19.31 per payslip.
Why does it cost so much to process payroll in-house? The high cost of processing payroll in-house is primarily due to the cost of employing payroll staff; smaller businesses often use their most valuable employees to process or supervise the payroll function, and this is expensive. Also, smaller businesses don’t have the ability to build economies of scale into the payroll function.
Outsourcing the payroll function to an external specialist is often a far more cost-effective solution than processing payroll in-house.
[Above figures taken from the 2014 Australian Payroll Association (APA) Benchmarking Report, which surveyed 1,782 employers who pay over 1.1 million employees.]
2. Improved statutory compliance
The Fair Work Act, payroll tax reforms, and ever-changing superannuation laws, PAYG withholding laws and industry awards have made the payroll function incredibly complex. Furthermore, payroll is under increasing scrutiny from a number of industry regulators, including the Australian Taxation Office, Tax Practitioners Board, Fair Work Commission, and Office(s) of State Revenue. These regulators can and do impose substantial fines on businesses for non-compliance, whether intentional or not. Outsourcing your payroll to a specialist improves your statutory compliance and reduces the risk of inadvertently breaching payroll laws and incurring fines or penalties.
3. Improved access to information and reports
A dedicated payroll service has the ability to provide you with a range of in-depth reports, including leave entitlements (accrued and taken), superannuation guarantee obligations, negative leave balances, and employment anniversaries. Such reports better enable you to manage your business’s most valuable resource: staff.
4. Improved information security
Payroll information is highly sensitive and disclosure in the workplace can have dire consequences. Physically removing the payroll function from a business’s premises reduces the risk of unauthorised access to payroll information.
5. Improved employer-employee relationship
In smaller business environments, owners/managers and employees can develop close relationships, which can make dealing with payroll issues in an objective way difficult. Outsourcing your payroll to an external specialist provides an element of ‘distance’ between you and your employees on such sensitive issues.
6. Greater peace of mind
Knowing that the payroll function is being 100% effectively and efficiently managed provides greater peace of mind, and frees you up to focus on other aspects of your business.
If you would like to arrange your complimentary payroll review, or if you have any questions, please feel free to contact me via return email or on 02 40010979
I look forward to talking with you soon.
Cloud Bookkeeping / Payability / ABN Perfect Payroll