So you’re growing, and now it’s time to hire your first employee or build your team out even further… Congratulations!
This represents an exciting time for you and your biz, but it’s important to understand your obligations when it comes to your people.
So below I’ll run you through five key things to consider as this relates to our expertise in the world of numbers and all things small biz.
Analyse your numbers, it’ll help you determine what support you need
Whether it’s full-time, permanent part-time, casual, contract, or other, it’s important to think about what it is that your business needs to succeed. The best way to do this is to look at your budget and forecast (if you don’t have these, we can help you create them!), and see what is feasible.
This approach will help you determine if there’s enough work in the pipeline, or whether you’re going to make enough sales to warrant a full-time employee.
At the same time, if a big, one-off project has just landed, it will allow you to identify that, actually, a casual or contractor might be the way to go. Then, if this project ends up turning into ongoing work, it could be time to hire someone on a full-time basis.
Know that award rates, holiday leave and more vary by employment type
Once you’ve decided on your employment type, make sure you’re aware of the obligations that relate to them.
There are loads of award rates, for example, and what you pay your people will vary with things like your industry, their experience, and whether they are in an apprenticeship or traineeship scheme.
A key change that came into effect as of 1 July 2022, is that the National Minimum Wage has increased by 5.2%, to $21.38 per hour or $812.60 per week. So, if you’re paying employees this wage, make sure you increase it, and update your payroll software accordingly.
Another key one here is holiday and sick leave. Casuals, for example, are not entitled to this, apart from in Victoria, where from a sick leave perspective, the government has launched the Victorian Sick Pay Guarantee, which is applicable to certain occupations, such as hospitality and aged and disability carers. On the other hand, employment types such as full-time are eligible for four weeks of holidays, and 10 days’ sick leave each year.
Take the time to understand your payroll requirements
As an employer, there are various legal obligations to be aware of when it comes to payroll.
Of course, paying your people on time is key, but you’re also required to withhold a portion of the amount you pay employees for tax purposes, and then pay them a net wage.
This is called pay as you go (PAYG) withholding, and needs to be actioned with every pay cycle. To do this, first make sure you’re registered for PAYG withholding, and you can learn more about this via the ATO here.
To report not only these withheld amounts to the ATO, but salaries, wages and superannuation, you need to look to Single Touch Payroll (STP). It’s fairly new, with the government introducing it in 2019, and it’s designed to make the payroll process a bit more seamless for you.
In a massive plus – most accounting and bookkeeping software features this functionality now. It allows you to submit employees’ payroll information each time to make a payment to them – whether that’s weekly, fortnightly, monthly, or something else.
Navigating the payroll process can get a little overwhelming and confusing, especially as your team grows, which is why sometimes, it’s best to look to an expert to manage this for you and ensure you’re compliant.
Don’t forget about superannuation!
Superannuation is tied to payroll as it is paid in addition to an employee’s salary or wage, and is compulsory for all (including those such as temporary visa holders and company directors).
An important change to note, is that as of 1 July 2022, the super you need to pay is now 10.5% rather than the previous 10%. The best way to meet your new obligations here, is to update your payroll software (we can also manage this for you) to include the new rate.
Another new government requirement here, is that even if an employee earns less than $450 a month through your business, you now need to pay them superannuation too. Make sure you give them a Superannuation Standard Choice Form, so you’ve got their super fund details and can make the necessary payments.
Communication and transparency with employees: it’s a must
In shift-based industries such as hospitality, retail and construction, it’s important to treat employees fairly when it comes to assigning them work.
Rostering can become super time consuming when you’ve got multiple employees to manage, which is where tech-based management tools can be a lifesaver. They allow you to see who is working when, and look at historical data to identify if additional employees will be needed for certain shifts, or at certain times of the year.
When assigning shifts, look to spread the load evenly, and communicate fewer or extra shifts with your team ahead of time, as well as share the reasoning behind the changes. Ideally, you’ll create and share their rosters with them via the software (Deputy, for example, can be downloaded as an app on employees’ phones, so they can easily view them) at least two weeks in advance.
Feeling a little overwhelmed?
We totally get that there’s a lot to navigate when it comes to recruiting, managing and paying employees, which is why the MicroChilli team is here to help!
Book a complimentary consultation today, and we’ll chat through your employment needs, payroll and more, so you’re on the right track and meeting your obligations.