So you’re going to start employing staff. That’s great, this usually means your small business is booming, so well done to you! Before you don your employer’s hat however, you need to make sure that you have all of your ducks in a row. There are quite a few things you need to do so to that end, we have created a quick-start guide for new employers. Our guide will tell you what you need to know, supply crucial documents and provide links to important information. Pop this blog link in your favourites for quick access as you will find it useful each time you on-board a new staff member.
Quick-start guide for new employers
Some important things to do before you start
- Register with the ATO for PAYG Withholding (your tax professional can do this for you). You need to do this to enable you to withhold tax from your employees’ wages.
- Choose a default super fund for your business.
- Think about how you will lodge and pay employees’ superannuation. You could use the Small Business Superannuation Clearing House. Here are details on how to register.
- Attain a workers compensation insurance policy. Each state has its own workers’ compensation authority.
- Attain the appropriate award and/or agreements for your industry under which your employees will be employed. This will form the basis of your payroll processes.
- Supply the 3 forms listed in the next section to new employees.
- Decide on how you are going to process payroll. This can be via your accounting software (if it has that functionality) or outsourced to a payroll company and/or professional.
- Learn about PAYG tax, superannuation and other payroll deductions. If you cannot do this, outsource your payroll to a professional.
- Create a workplace policy for your business and distribute a copy to your new staff members. Here is a template you can use to get you started HR-manual-template
- Keep all records relating to your payroll for 7 years.
On-boarding your new employee
Once you have moved past the interviewing stage and have decided upon a successful candidate, you need to complete a series of tasks to enable you to set up the new employee in your payroll system. Follow the list below.
1. Gather the employee’s details
- Name, address, telephone number and email address
- Emergency contact details
- Bank details for payment
- Employee rate of pay and frequency of pay
- Employee start date
- Employment basis – casual, part or full time
- Job title
- Award or agreement (see Fairwork)
- Signed employment contract (if you will use one)
Now that you have this information, you’re well on the way setting up your new employee in your payroll system. The next thing to do is provide your employee with the following items.
2. Tax File Number Declaration (TFN Dec)
Luckily, the TFN Dec is available online! Go here to grab one or provide the link to your employee so s/he can complete their details for you.
Remember, section A must be completed by the employee and section B must be completed by you, the employer. You must then send the original to the ATO after first keeping a copy for your records.
3. Superannuation Standard Choice Form
You must provide a Super Standard Choice Form to every new employee. This form allows the employee to nominate their own super fund or your default super fund. S/he must complete the relevant sections and return it to you. You can then use the information to assist in paying the Super Guarantee Contribution (SGC) on behalf of your employees.
Here is a copy of the Super Standard Choice Form for your use: Superannuation_standard_choice_form
4. Fair Work Information Statement
You must provide this statement to every new employee before they begin working for you (or immediately after they start). Failure to do so could result in penalties of up to $12,600 for an individual and $63,000 for a corporation. The Fair Work Information Statement provides basic information to new employees about matters which may affect their employment. You can grab a copy of the statement here: Fair-Work-Information-Statement.
Okay, so that is our “very” quick-start guide for new employers. We hope you find it useful especially if you are just starting your employer journey. Of course, you should know that payroll and employment is a very complicated area and can be quite overwhelming at times. If you would like assistance in setting up your payroll system and/or running your payroll, please don’t hesitate to get in touch