Employee entitlements are under the spotlight now more than ever. News reports of high profile celebrity-owned restaurants and other large businesses in the firing line of Fair Work for under-payment of salary/wages and superannuation are increasing
Let’s make sure you’re abiding by the laws and paying your employees their legal entitlement… as paying your employees correctly can make or break your business.
Wages are a large part of businesses’ cost of sales, particularly businesses in the service industry. As a business grows, it becomes increasingly important for business owners to have control of their wage expense.
Are you aware of the potential for payroll anomalies and ways to detect them? Whether due to error or malicious intent, payroll anomalies may cause business owners to be in breach of their employer obligations.
Stay out of the firing line by staying up-to-date with payroll compliance. Single Touch Payroll and Super Stream make the business vulnerable for an audit to be triggered by the ATO. These breaches may lead to large penalties being imposed, with you, the business owner, potentially personally liable.
There are several payroll irregularities business owners need to be awake to and rectify to meet all their employer obligations:
- Employee details – including tax file number, date of birth, place of residence- are they current?
- Employee classification – are they listed under the correct award?
- Employee pay rates – do they match their award or equivalent?
- Employee super details – are they on file?
- Employee super being calculated on all ordinary time earnings.
- Super paid by due date.
Imagine waking up one morning and seeing yourself in the media as one of those business owners caught in a web of controversy. We doubt that would be much fun.
You need to ensure the payroll process is compliant and not open to theft of the business profits. Especially when a third party is responsible for the payroll process. Keep an eye on the following payroll variances business owners should be aware of in determining if there is reason to suspect fraud:
- Employee bank details matching a supplier.
- Payment to phantom (non-existent) employee.
- Payment to employee for hours exceeding approved hours.
- Excessive claim of allowances or overtime hours.
- Duplication of employee details or bank accounts.
There are many methods to detect the above-mentioned payroll anomalies. For businesses with a more complex payroll, there are more IT-reliant methods that can be employed to extract payroll information, match and detect any duplication or discrepancies. Having an open dialogue with employees regarding their remuneration will also help detect any differences that may be detected by the employees themselves. Any mistakes detected should be rectified immediately, and steps taken to mitigate further loss to employees and the business. A trusted Adviser can assist in navigating the complexities of payroll and ensure business owners have peace of mind, knowing every aspect of the business is compliant.
Want to make sure you’re compliant so you stay out of the headlines? Talk to your local Accru Adviser today. Partner with us to update all your business compliance issues.