It's all in the details...
Surprisingly we still see people keeping manual records for employees when you can keep all the info in Xero. Our 1st tip is to use Xero to store all the info you need on your team. You have to put the base information in to be able to prepare PAYG Payment Summaries and lodge the Tax Declaration so it's a great idea to add everything into the 1 system.
You can store emergency contacts, job titles, employee classifications, bank accounts as well as any notes you want to keep. This makes life easier when you need to prepare any forms, change any details (as it's in 1 spot) and update pay rates (more on that later).
Jump into Xero, click on Payroll > Employees and ensure you have completed all the fields.
Invite to Employee Portal
While you are setting up all the details for your employees it's also a good idea to invite them to the employee portal. This will allow them to input timesheets, apply for leave, download payslips and PAYG Payment Summaries as well as check how much leave they have left etc.
It saves so many questions from your team and helps #banadmin. We wrote a tip a while back on how to do this and why.
Leave
While you are in setup mode it's important you have Leave setup correctly and that you are calculating leave for every employee each week. Xero have a really comprehensive guide on setting this up.
The next trick is to ensure ALL of your team apply for leave via Xero. This ensures you have an audit trail, can see the calendar of when anyone in your team is having leave and also ensures you are paying the correct amounts weekly.
It also ensures people don't take more leave than they are entitled to and you always have an up to date balance.
TIP: Make sure personal leave is completed as well as Annual Leave before you start the pay run each week / fortnight.
Pay Items + Templates
Once you have the basics of employee information in Xero the next step is to ensure you have your Pay Items set. If you have employees who are on an award it's important you setup a Pay Item for each level - ie if you have a 2nd year apprentice you should have a Pay Item for 2nd Year Apprentice - Normal Hours + 2nd Year Apprentice - Overtime Hours etc.
This makes it really easy at the end of the year to update the dollar amount when the award changes. Otherwise you end up needing to change every single persons pay amount!
All you then need to do is setup each employees Pay Template to include the Pay Items relevant to them - ie 2nd Year Apprentice.
Auto Super
With the new Super Stream requirements it's important you have Auto Super setup. This will make the process of paying Super each month / quarter as simple as a few clicks.
All you need to do is complete the Auto Super setup form and ensure all of your employees have super details in Xero.
Use ABA Files
We still see so many people not using ABA files to pay wages, instead they are manually typing in how much to pay each employee each week. This is a waste of time, when you can click a button to download a file and then upload straight into Internet Banking.
Just click the pay run options once you have finalised everything to download the aba file.
Use RULES
Once you have completed the payroll process the next mistake we see people make is posting the actual physical payment of wages to the wrong account. It's a great idea to setup Bank Rules so every time you reconcile the physical payment in the bank reconciliation it always goes back to the correct wages payable account.
