At the heart of any successful business are your employees. Employees are not like other expenses. Employees can give you a competitive advantage in the industry. They can turn one-off customers into repeat business and help to grow your brand. 

Ensuring your employees get paid the correct amount and on time, makes them feel like they have a secure job. It also ensure they feel as though they’re respected, which ultimately increases their level of engagement with the work they do. In turn, this also increases employee satisfaction and decreases turnover – both of which lead to a higher level of service for your customers.

But looking after your employees is only the beginning of why payroll compliance is important for your business. 

Australian State and Territory Revenue Offices frequently audit businesses to ensure that they’re complying with their requirements under the payroll tax legislation. If you are found not to be complying, you will be subject to penalties which interfere with your ability to serve your customers and earn a profit. It’s also important to consider the fact that even the time required in taking part in audits can be a challenge for most businesses.

8 Common Issues that Leave Employers Subject to Penalties

Businesses often have issues with their state or territory revenue office because they don’t register for payroll taxes in all the correct jurisdictions. Specifically, some of the most common infractions are:

• Not registering when the wages paid exceeds the monthly threshold amount for their jurisdiction.
• Not recognising that they must register in every state or territory they pay wages in – not only the state where their head office/ business is based. 
• Failing to register related entities such as holding companies, subsidiaries, or where two businesses are controlled by the same person. 
• Not including all liable wages, such as directors’ fees and superannuation in the summation of their wage payments.
• Not declaring fringe benefits and employee share schemes.
• Falsely classifying employees as contractors.
• Incorrectly claiming exemptions where they should not apply.
• Late payment of payroll taxes.

Penalties and Interest Payments for Payroll Noncompliance

If your business is found to be non compliant with the above payroll rules, you can face significant consequences.

If your business owes payroll tax from previous periods, you may also owe interest on that amount. This is an unexpected outflow of cash that most businesses have not prepared for. That can impact a business's ability to pay for stock and even wages, which can then limit the performance and ultimately profit of their business. 

Furthermore, if you have not complied with payroll tax regulations, you may be hit with penalties. These penalties can range in the tens of thousands of dollars, and the size of the penalty increases with the size of your organisation. While interest payments on unpaid tax can severely impact your ability to do business, the penalties can send your company out of business. 

Ensure Your Business Complies with Payroll Requirements

To ensure you meet your obligations, you need to work with the experts in payroll compliance. 

Aussiepay is 100% compliant with payroll and legislative obligations. We ensure that your payroll is up to date with the latest legislative changes. We make timely and accurate payments on your behalf and set up checkpoints to ensure your business is compliant with tax obligations. Additionally, honest but incorrect payments can and do occur; with many business owners thinking they’re doing everything the correct way. 

The above is particularly true when it comes to calculating the right pay amounts or even paying overtime correctly. Understandably, you’re an expert in your field; meaning that you should be focusing on what you do best – instead of worrying about payroll.

We can streamline your payroll process to make it more efficient, further reducing your costs.