Payroll Made Simple: What You Need to Know as an Employer

Managing payroll is one of the most important responsibilities you have as an employer — and also one of the most confusing if you’re doing it for the first time. But don’t worry — we’re here to make it simple!

Whether you’ve just hired your first employee or you’re growing your small team, understanding payroll basics is key to staying compliant and keeping your staff happy.

What Is Payroll?

Payroll refers to the process of calculating and distributing employee wages, managing tax and superannuation obligations, and ensuring all entitlements are met.

It’s not just about paying your team on time — it’s also about:

• Keeping accurate records

• Withholding the right amount of tax

• Paying super

• Reporting to the ATO through Single Touch Payroll (STP)

Key Payroll Obligations in Australia

As an employer, here’s what you need to stay on top of:

1. Tax File Numbers (TFN): Ensure you have your employee’s TFN declaration before their first payday.

2. Superannuation Guarantee:
   You must pay super if your employee earns $450 or more in a calendar month. The current rate is 12% of their ordinary time earnings.

3. PAYG Withholding:
   You’re responsible for withholding tax from your employee’s wages and reporting it to the ATO.

4. Single Touch Payroll (STP):
   All businesses in Australia must report payroll information to the ATO each pay run via STP-enabled software like Xero or MYOB.

5. Fair Work Compliance:
   Be aware of the minimum wage, award rates, and entitlements like annual leave and sick leave.

Common Payroll Mistakes to Avoid

❌ Not registering for PAYG withholding with the ATO

❌ Forgetting to report through STP

❌ Paying incorrect super amounts or missing the due date

❌ Underpaying wages based on incorrect awards

❌ Missing payroll tax obligations (if applicable in your state)

💡 How to Simplify Payroll

Not every small business has a payroll team — and that’s okay! Here are our tips:

• Use cloud-based software like Xero, MYOB, or QuickBooks

• Set up automated STP reporting and super payments

• Work with a registered BAS Agent (like us!) to ensure everything is compliant

• Create a recurring payroll checklist to stay consistent

Key Dates to Remember

Each payday: Report to ATO via STP

Quarterly: Pay super by the 28th of the month after each quarter

EOFY: Finalise payroll data for income statements (formerly payment summaries)

🤝 Need Help with Payroll?

At The Bookkeepers Touch, we specialise in simple, stress-free payroll support for sole traders and small businesses. Whether you need help setting up payroll, processing it weekly, or navigating STP and super, we’re here to help.

📞 Book a discovery call today and let’s make payroll one less thing to worry about.