Payroll Terminology Explained

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Payroll Terminology Explained
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• It can be a headache for business owners
  navigating their way through the minefield that
  is payroll compliance.
• I was chatting with a client who best described
  it as a game of Snakes and Ladders. We laughed
  but she was dead right. It seems that as soon as
  you get your payroll groove on and start getting
  ahead, climbing ladders (so to speak!), a law
  changes or a requirement is updated and off you
  go sliding back down to where you started.
• In the last two blogs we talked about the payroll
  process and also employee payslips and how to get
  them right.

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• It is a tough area to stay on top of, so to help
  you we have put together a payroll compliance
  guide for business owners with some key
  requirements and terms so you can keep on top of
  it all.
• Wages and Salaries
• This is the total remuneration, in cash or kind,
  payable to all persons counted on the payroll in
  return for work completed. It can be paid weekly,
  fortnightly, or monthly. Getting it right keeps
  your team happy and prevents infringements and
  penalties.

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• Allowances
• A specific amount paid in addition to an agreed
  salary such as allowances for tools, uniforms and
  overtime. These depend on the industry and the
  Award.
• Superannuation
• This is a way for employees to save for
  retirement. A percentage of an employee's wage or
  salary is deposited into a superfund account.
  Penalties are high when super is not calculated
  correctly or paid on time.

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• Other Payments
• There is a variety of payments that may be
  required from time to time such as salary
  sacrifice, workers compensation, bonuses,
  maternity leave and long service leave.
• Payroll Tax
• Applicable when your total wage bill exceeds a
  threshold amount. Paid monthly, payroll tax rates
  and thresholds vary between states and
  territories.

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• IAS
• An Instalment Activity Statement (IAS) is
  applicable for taxpayers who make PAYG
  instalments and completed monthly.
• BAS
• A Business Activity Statement (BAS) is a monthly
  or quarterly reporting requirement from the ATO.
  It's used for reporting and paying GST and
  includes PAYG instalments, and PAYG withheld from
  your employees wages.

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• FBT
• Fringe Benefits Tax is the tax employers pay
  annually on certain benefits they provide to
  their employees, including their employees family
  or other associates.
• PAYG Payment Summaries
• Payment Summaries are historically what employers
  would provide to their employees at the end of a
  financial year, summarising the total wages paid
  and tax withheld from those wages. This was
  retired on 30 June 2019 with the roll-out of STP.

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• Single Touch Payroll (STP)
• STP is the technology platform whereby payroll
  software submits payroll data to the ATO
  everytime a payrun is processed.
• And if you dont know your BAS from your IAS or
  your PAYG from your FBT, that is absolutely fine.
  Remember that iKeep Bookkeeping, as specialists
  in cloud accounting and online payroll solutions,
  are here to help.

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• One of the benefits our clients find when they
  transfer payroll from a traditional, manual
  payroll System to a streamlined cloud accounting
  approach is the minimal fuss around when a law or
  requirement gets updated or changed or even a
  brand new one created. Clunky manual updates are
  replaced by automated and streamlined processes
  that mean less time and money spent on
  administrative requirements for you as the
  business owner or your accounts person.

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• While its good to have knowledge of the legal
  requirements and the terms weve shared with you
  in the guide today, its also good to outsource
  bookkeeping the intricacies of bookkeeping to a
  team who definitely know their BAS from their IAS
  and what to do with it! Book a call with one of
  our experts to learn more about how we can help
  with your payroll processing.
• For more information contact us iKeep Bookkeeping.