Running a successful hospitality business in Australia can be a rewarding venture but along with it comes undeniably hard work full of complications. We can bet that any hospitality business owner would agree that hospitality operations are dynamic and surprising as they go well beyond knowing how to open your venue, knowing your brand and your product, hiring your staff, and creating a positive workplace culture.
One of the most significant pieces to running a successful hospitality business is payroll. From paying staff correctly to navigating taxes and super along with the ever-changing climate of hospitality pay rates and penalties, there's a lot to navigate when it comes to payroll.
For obvious reasons, accurate and compliant payroll should be at the forefront of any successful hospitality business. Here are the top five common challenges within hospitality payroll and how to overcome them.
#1. Paying staff incorrectly
In a recent study, the Fair Work Ombudsman uncovered that over 46% of hospitality businesses were not paying their staff correctly and were not even aware of this.
Since the Hospitality General Award 2010 (HIGA) is constantly evolving, underpaying, overpaying, and even exploitation are unfortunate but somewhat common in the hospitality industry.
Mistakes happen, but they shouldn’t be when it comes to your hospitality payroll. Anything less than 100% compliance leads to legislative risks and payroll goes beyond paying your staff. In fact, you should be familiar with and have a full understanding of taxation of various awards and agreements, different leave entitlements and superannuation. More on that later…
Moreover, compliance of hospitality payroll is a complicated and ever-changing portion of running a successful hospitality business.
#3. Late payroll and taxes
As the New South Wales Government states, every hospitality business owner should know and fulfil their responsibilities surrounding payroll tax obligations. This includes meeting deadlines and properly accounting for records, to name a couple.
Late payroll and taxes lead to additional fees and penalties as per the Taxation Administration Act.
#4. Upkeep of wages and taxation (PAYG) changes that occur annually
As of July 2018, every company with an active payroll (employees) need to be registered and up-to-date with Single Touch Payroll (STP). In addition, every July the CPI percentage increase is effective on all wages that occur in the award and this includes trainees as well as apprentices.
With the potential change in government, there may be changes in the way the PAYG is taxed on gross wages. All businesses must ensure they are taxing employees (including HELP, TLS, SSL, ABSTUDY) to ensure that taxes are being applied accurately.
#5. Under or overpaying superannuation
Common errors include surrounding the under and overpayment of superannuation include:
- Overpaying employees on superannuation. This is dependent on the employee’s Gross earnings per month.
- Superannuation Guarantee is in alignment with the legislation of the ATO.
- Superannuation needs to be paid via a clearinghouse, not via direct debit transfer (EFT) or by cheque to separate superfunds.
- Back payments of missed superannuation require ATO forms and paperwork to be submitted. Our team have seen and heard this missed detail.
These five common challenges are errors that our team have regularly seen when it comes to hospitality payroll. If any of this sounds familiar (or worse - unfamiliar), outsourcing hospitality payroll is for you.
Why outsource your payroll?
Simply put: Outsourcing your payroll will reduce your costs and ensure consistency, as well as accuracy. Outsource your payroll with BENCHMARQUE today for:
- Increased productivity
- Accurate and compliant payroll processing and data security
- Industry-leading support and a tailored payroll solution to fit your unique needs
- Time and resource savings
As industry leaders and with over 11 years of experience behind us, we’ve put an enormous amount of effort into effective payroll procedures so you don’t have to. We are experts in hospitality payroll outsourcing in Sydney, so you can be the experts in front of house service, allowing you the freedom to focus on profitability. Enquire about our payroll services below.