Monday 29 July - Creating Confidence In How People Are Paid

Payday Super: Payroll profession advocacy and representation with Australian Payroll Association

In May 2023, the federal government announced its intention to require employers to pay their employees’ super on pay day, replacing the current quarterly contribution requirements. This change is intended to come into effect from 1 July 2026.

Following this announcement, both Treasury and the ATO have been actively consulting on the matter by convening working groups made of up industry experts, industry associations, key stakeholders, and members of legislative bodies such as Treasury and the ATO itself, to assist in policy design. Following valued input in similar working groups for STP, Australian Payroll Association were invited to attend the payday super working groups to ensure that the voice of the payroll professional was heard. ?

One of our key goals when attending these sessions was to ensure that the challenges facing payroll departments were heard, and to advocate for the simplest possible solution to payday super. The current superannuation framework is complex, and the penalties for getting it wrong can be significant, so we need to ensure that a system moving to more regular payments can be achieved through the simplest means possible.

Some of the areas raised for discussion, which were debated in detail, include:

Defining Pay Day

What is pay day? It seems this would be a simple question to answer. Most would agree that it’s the day employees normally expect to receive their pay, being the pay date on their payslip. That could be weekly, fortnightly or monthly (or the very occasional bi-monthly). But how will out of cycle payments be handled? Will these also be deemed to be a pay day for the purpose of pay day super? This could result in super being paid many times during a week if there are out of cycle pay runs.

Onboarding of new employees

Every payroll professional will have experienced the frustration of a new employee not making a super choice and therefore super stapling being applicable.

We asked the question; how can an employer pay super on pay day if you don’t yet have the employees’ super fund? Super stapling is constrained in that you can’t request the employees’ super fund details from the ATO until you have first submitted a pay event (that is, you have paid the employee their first pay). It’s a backwards process that the ATO is aware of but hampered by privacy legislation. We do hope to see some concessions for new employees when it comes to the timing of their first super payment.

Late Payment of Super

Currently, if super is not paid in full by the relevant quarterly cut-off date, the employer is obligated to submit the (onerous) SG Charge Statement to the ATO. What will this look like under a payday super system? We debated whether an interest charge would still apply, and if so, from when? Would it apply from the employees’ pay day, or will there be a grace period? Will the $20 administration fee still be relevant, and will the ‘shortfall’ still be calculated on salaries and wages rather than on Ordinary Time Earnings? What will the additional penalties and charges be, if any, for non-compliance? All these details need to be built into the new payday super model.

Super obligations of other parties

The key driver for payday super is to ensure that employees have the benefit of funds being received in their super accounts as soon as possible, setting them up for a successful retirement balance. This then is not just the responsibility of employers to pay super on time, but also on the other parties involved in the process such as clearing houses and super funds themselves.

There is a requirement for clearing houses to speed up their processing times, and for super funds to allocate funds efficiently, with file failures and un-allocated funds to be notified to the employer within a reasonable timeframe and with enough information provided so that employers can make an informed decision as to their next steps.

We are looking forward to seeing how the above challenges will be addressed when the model and draft legislation for payday is super is released, and to continue sharing our knowledge, concerns and recommendations to the working groups in the future.

Payroll Quick Reference Guide

Payroll Business Continuity Plan (BCP)

Two weeks ago, an unfortunate "sensor configuration update" within the Falcon cybersecurity platform resulted in a global computer outage affecting approximately 8.5 million Windows devices worldwide. This incident caused significant disruption to systems across the globe.

In response to this event, it is critical that organisations, including our own, take proactive measures to ensure the continuity of key business functions, such as payroll operations. It is essential that payroll Business Continuity Plans (BCPs) are reviewed and tested to ensure they can sustain on-time pay delivery even during unexpected disruptions.

We urge all businesses to assess their current BCPs and make necessary adjustments to enhance resilience against unforeseen events. To assist in this process, we have prepared a comprehensive outline that details essential components of a Payroll BCP.

For organisations without a current BCP in place, the downloadable document provides a valuable resource outlining key considerations for developing a robust plan.

Click Here - to access the downloadable document.

Australian Payroll Summit - Sydney

Agenda

Anat Hassner Jasmine Fernance Simone Dixon C.P.S. Chontelle Weyman Toni Minovski Paul Gordon & Tracy Angwin

For ticket information - Click Here.

Payroll - Jobs of the Week

We thought we’d share two outstanding opportunities available with our clients at the moment. Ready to take your payroll career to new heights?

Job Opportunity 1

A premier manufacturing and construction company is seeking a talented Senior Payroll Officer based in Sydney.

What You’ll Do:

• Manage end-to-end payroll processes independently.
• Ensure accuracy and compliance in all payroll activities.
• Collaborate with team members to streamline operations.

What you will get in return:

• A supportive team environment where your contributions truly matter.
• Competitive compensation and benefits package.
• Opportunities for growth and professional development within a thriving industry.

Job Opportunity 2

A Consultancy Firm specialising in delivering expert financial and operational solutions to clients across various industries is looking for a Senior Payroll Officer to join their team.

This role involves managing end-to-end payroll operations, ensuring accuracy in payments, and providing exceptional service. This role is based in Norwest NSW.

Apply now and be part of this client’s commitment to excellence in client service and professional growth.

Please contact [email protected] ?if you are interested in these positions for a confidential career conversation.

Test your Payroll Knowledge

50% Off* Our Payroll Knowledge Assessment this week

The assessment comprises of 35 multiple choice questions which will help you gauge your technical knowledge.? Use the code PKA50 at check out to receive the discount this week only

To access Click Here.

Closing Loopholes – Visual snapshot

Changes coming in August 2024.

Please note this is only a summary timeline of the Closing Loopholes changes.

For more detailed information - Click Here

Credit : The Fair Work Ombudsman

What a Head of People and Culture looks for from the payroll department

Here’s what a HoPC typically expects from the payroll department and how you can align your operations to meet these expectations effectively.

Key payroll expectations of a Head of People and Culture

1. Employee experience and satisfaction:The payroll department plays a pivotal role in shaping the employee experience. Accurate and timely payroll processing directly affects employee morale and trust in the organisation. A seamless payroll process ensures employees feel valued and supported.
2. Compliance with employment legislation:Ensuring compliance with employment laws and regulations, including fair work standards, leave entitlements, and superannuation, is critical. The payroll department must stay updated with legislative changes and ensure that all payments are processed correctly and compliantly.
3. Support for HR initiatives:Payroll should support HR initiatives such as employee benefits, remuneration packages, and reward programs. Accurate payroll data is essential for HR to design and implement these programs effectively. Payroll’s role in executing these initiatives helps enhance the overall employee value proposition.
4. Data integrity and analytics:The HoPC relies on accurate payroll data for workforce planning, turnover analysis, and budgeting. Payroll should provide reliable data and insights that help HR make informed decisions about recruitment, retention, and employee development.
5. Integration and collaboration:Effective integration between payroll and HR systems is vital. This integration ensures data consistency, reduces manual work, and supports cohesive HR processes. Collaboration between payroll and HR teams enhances overall organisational efficiency and employee satisfaction.
6. Employee self-service and transparency:Providing employees with self-service tools for accessing payroll information, updating personal details, and managing leave requests fosters transparency and empowerment. These tools reduce administrative burdens on HR and payroll, allowing employees to manage their information directly.

Need to convince your HoPC that you need APA membership and training?

1. Enhance employee experience:Highlight how APA membership provides access to resources and training that improve payroll accuracy and timeliness. Better payroll processes lead to higher employee satisfaction and trust, aligning with HR’s goals of fostering a positive workplace culture.
2. Ensure compliance and reduce risk:Explain the importance of APA’s resources in keeping the payroll department updated with the latest employment laws and regulations. Compliance support from APA minimises the risk of non-compliance, protecting the organisation from legal issues and enhancing HR’s ability to maintain fair work practices.
3. Support strategic HR initiatives:Demonstrate how APA’s training and resources can enhance payroll’s ability to support HR initiatives. Whether it’s managing complex remuneration packages or implementing new benefits programs, APA’s support ensures payroll can execute these initiatives accurately and efficiently.
4. Leverage data for HR decision making:Point out the advanced payroll analytics webinars and training provided by APA. These tools help the payroll department provide HR with critical data for workforce planning and decision making, enhancing HR’s strategic role in the organisation.
5. Foster integration and collaboration:Emphasise the importance of integrating payroll and HR systems. APA’s resources can help the payroll department implement best practices for system integration, ensuring seamless collaboration between payroll and HR teams and improving overall operational efficiency.
6. Promote employee self-service and transparency:Highlight the benefits of APA’s guidance on implementing employee self-service and other payroll related tools. These tools empower employees to manage their information, fostering a culture of transparency and trust, which is a key focus for HR.

Meeting the expectations of a Head of People and Culture involves aligning payroll operations with HR’s goals of enhancing employee experience, ensuring compliance, and supporting strategic initiatives. By focusing on these areas and leveraging the resources available through APA membership, the payroll department can position itself as a vital partner in fostering a positive organisational culture and achieving HR objectives.

Payroll FAQ

Question.

How do I process a cash out of RDOs or Time of in lieu (TOIL)?

Answer.

When cashing out RDOs and TOIL while an employee is still employed, PAYG needs to be withheld at marginal rates, using Schedule 5 – Tax Table for back payments, commissions, bonuses and similar payments.

For STP reporting purposes:

• Cash out of RDO – report as a Paid Leave Type C – cash out of leave in service
• Cash out of TOIL – report as Overtime Cash outs of RDOs are OTE and therefore subject to superannuation.

Cash outs of TOIL are not OTE and therefore not subject to superannuation.

Australian Payroll Association