Payroll Terminology Explained - PowerPoint PPT Presentation

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Payroll Terminology Explained

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Understanding Payroll Terminology: It can be a headache for business owners navigating their way through the minefield that is payroll compliance. – PowerPoint PPT presentation

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Title: Payroll Terminology Explained


1
Payroll Terminology Explained
2
  • It can be a headache for business owners
    navigating their way through the minefield that
    is payroll compliance.
  • I was chatting with a client who best described
    it as a game of Snakes and Ladders. We laughed
    but she was dead right. It seems that as soon as
    you get your payroll groove on and start getting
    ahead, climbing ladders (so to speak!), a law
    changes or a requirement is updated and off you
    go sliding back down to where you started.
  • In the last two blogs we talked about the payroll
    process and also employee payslips and how to get
    them right.

3
  • It is a tough area to stay on top of, so to help
    you we have put together a payroll compliance
    guide for business owners with some key
    requirements and terms so you can keep on top of
    it all.
  • Wages and Salaries
  • This is the total remuneration, in cash or kind,
    payable to all persons counted on the payroll in
    return for work completed. It can be paid weekly,
    fortnightly, or monthly. Getting it right keeps
    your team happy and prevents infringements and
    penalties.

4
  • Allowances
  • A specific amount paid in addition to an agreed
    salary such as allowances for tools, uniforms and
    overtime. These depend on the industry and the
    Award.
  • Superannuation
  • This is a way for employees to save for
    retirement. A percentage of an employee's wage or
    salary is deposited into a superfund account.
    Penalties are high when super is not calculated
    correctly or paid on time.

5
  • Other Payments
  • There is a variety of payments that may be
    required from time to time such as salary
    sacrifice, workers compensation, bonuses,
    maternity leave and long service leave.
  • Payroll Tax
  • Applicable when your total wage bill exceeds a
    threshold amount. Paid monthly, payroll tax rates
    and thresholds vary between states and
    territories.

6
  • IAS
  • An Instalment Activity Statement (IAS) is
    applicable for taxpayers who make PAYG
    instalments and completed monthly.
  • BAS
  • A Business Activity Statement (BAS) is a monthly
    or quarterly reporting requirement from the ATO.
    It's used for reporting and paying GST and
    includes PAYG instalments, and PAYG withheld from
    your employees wages.

7
  • FBT
  • Fringe Benefits Tax is the tax employers pay
    annually on certain benefits they provide to
    their employees, including their employees family
    or other associates.
  • PAYG Payment Summaries
  • Payment Summaries are historically what employers
    would provide to their employees at the end of a
    financial year, summarising the total wages paid
    and tax withheld from those wages. This was
    retired on 30 June 2019 with the roll-out of STP.

8
  • Single Touch Payroll (STP)
  • STP is the technology platform whereby payroll
    software submits payroll data to the ATO
    everytime a payrun is processed.
  • And if you dont know your BAS from your IAS or
    your PAYG from your FBT, that is absolutely fine.
    Remember that iKeep Bookkeeping, as specialists
    in cloud accounting and online payroll solutions,
    are here to help.

9
  • One of the benefits our clients find when they
    transfer payroll from a traditional, manual
    payroll System to a streamlined cloud accounting
    approach is the minimal fuss around when a law or
    requirement gets updated or changed or even a
    brand new one created. Clunky manual updates are
    replaced by automated and streamlined processes
    that mean less time and money spent on
    administrative requirements for you as the
    business owner or your accounts person.

10
  • While its good to have knowledge of the legal
    requirements and the terms weve shared with you
    in the guide today, its also good to outsource
    bookkeeping the intricacies of bookkeeping to a
    team who definitely know their BAS from their IAS
    and what to do with it! Book a call with one of
    our experts to learn more about how we can help
    with your payroll processing.
  • For more information contact us iKeep Bookkeeping.
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