Why getting payroll right is so important for employees

Paying employees correctly and on time, and ensuring they get their entitled leave and holidays, plays a huge part in keeping them happy and motivated.​

For most people, earning money is a principal reason to go to work each day. It’s also one of the easiest ways for them to measure themselves and their achievements.​

While this can all sound obvious, there are many Australian businesses that don't get this right. In 2019, KPMG estimated more than a million people (13% of the total workforce) were affected annually by underpayment of salary or wages, at a cost of more than $1.35 billion. In the years since, there have been more high-profile cases of large organisations getting employee pay wrong, including Australia Post, the Commonwealth Bank, BHP, Optus, and Woolworths.​

Business owners and management are ultimately responsible for any pay mistakes and their
consequences. At best, you may have to repay your employees. At worst, you could face
prosecution and fines from a Fair Work Ombusman Inspector, or the Australian Taxation Office (ATO), as well as any interest and potentially expensive legal fees.​

Having integrated payroll and HR systems that pull directly from the same data will go a long way towards making sure your people's leave, pay, and tax calculations are accurate, timely, and compliant with the law. It will also make it quicker to identify and resolve any issues.​

Let's look at the top reasons why it’s so important to get payroll right for your employees.​

Under the Fair Work Act, employers must provide their employees with at least the minimum pay and entitlements outlined in the relevant modern award, registered agreement, and the National Employment Standards (NES).​

Most awards or registered agreements also stipulate how often employees must be paid. If not, it must be at least once a month.​

Then there are a host of other legal requirements around pay slips, taxes, superannuation
payments and other deductions, leave entitlements and loadings, and correctly calculating and paying public holidays.​

By coupling your payroll processes with the oversight of a good HR team, you’ll ensure you're always meeting all your legal requirements and obligations to your employees.​