On a basic level, payslips are documents provided from an employer to an employee that outlines how much an employee has earned, how much tax was withheld from the employee, and how much superannuation the employee is entitled to.
Payslips are a compulsory document that have to be provided to employees within one working day of pay day. For the details that need to be outlined on a payslip, check out the following link.
So with the above, how do we generate a payslip?
While traditionally payslips were prepared in spreadsheets or physically, with accounting software like Xero, you can now perform this task at a fraction of the time it would usually take to do this.
1. Work out how much to pay your employees
The first step is to understand how much you need to be paying your employees. As different jobs and qualification levels can impact the hourly rate, this is the first point of information that we need.
For a list of awards which might be suitable for your industry, see the following list of awards link. Once you work out what is the minimum you can legally pay your employee, you can move to the next step.
2. Provide your employees with statutory forms and documents to fill in
Once you have selected a suitable award for your industry and worked out the hourly rate, you can now prepare the following documents in preparation for on-boarding your employees:
a) Employment Contract
b) Tax File Number Declaration
c) Superannuation Choice Form
d) Fair Work Information Statement
3. Setup information on accounting system
Once you have received all these information, you are now well on your way to setup your new employee!
With your accounting system, create a new employee and setup the information provided as per statutory forms received from your employee. All done? Great job, now we can begin the REAL process of issuing payslips.
4. Process timesheets/payrun/payroll
When the end of the payroll week is completed, you can now start to process your payroll. Review your employee’s timesheets (want your employees to fill out their own timesheets? Check out XeroMe) for accuracy, and process the payroll through.
Congrats! Now that you have processed your payroll through, you are now able to issue your payslips to your employees.
And that’s it! Make sure you keep records of your payslips and timesheets for statutory purposes. We hope this short guide has been useful to you and will enable you to begin your journey towards setting up your business for success.
Need assistance with setting up your payroll process? Not too sure which Award applies to you? Perhaps you would like someone to setup, process, review and store key payroll information on an ongoing basis, so you can have peace of mind? Contact us today to see how we may be able to assist you outsource your payroll today.