How do you simplify the payroll process?

This article was produced in partnership with Australian Payroll Association

Jodi Walters of HRD Australia sat down with Tracy Angwin, Founder and CEO of Australian Payroll Association, to discuss getting payroll right.

Payroll. Put simply, it’s the process of paying your employees. But to put payroll in a somewhat clearer perspective for you, in Australia, there are 50 different acts of parliament that payroll employees need to be aware of when processing their payroll. From the Australian tax office, workers compensation, and common law to child support and immigration and many more moving parts to consider, how do businesses simplify the payroll process?

“There’s only three things you need to do to get payroll correct,” says Tracy Angwin, Founder and CEO at Australian Payroll Association, 30-year passionate payroll stalwart, and author of several payroll books. “It’s your people, it’s your technology or payroll platforms and the governance and controls that surround that.”

1. Your people: Your payroll employees should absolutely be qualified, and you should have on-going training for your payroll team.

There is an expectation in offices for people to be qualified at their role. HR, IT, marketing, and finance colleagues all need to be qualified. “For some reason,” says Angwin, “there’s not an expectation on payroll professionals to be qualified, even though they are managing the payment of what is typically the largest expense of an employer.” And because acts in parliament can be fluid it’s not enough to be qualified, you must also have on-going training to keep up with changes in legislation.

“Your payroll people need to be trained to look at payroll and be able to say if something doesn’t seem right.”

2. Your payroll technology. Payroll systems aren’t compliant by themselves.

“Your technology needs to be fit for purpose, set up correctly and audited regularly,” says Angwin. “My biggest bugbear is with payroll software marketing teams claiming their payroll systems are compliant, that’s absolute rubbish – a payroll system isn’t compliant or non-compliant, it’s the way you set up a payroll system that makes it compliant.” Simply setting up a payroll system and leaving it won’t work either, Angwin told HRD. “The biggest cause of over or under payment is the ‘set and forget’ mentality.” For instance, one of the questions that Angwin gets asked the most is ‘do I have to pay superannuation on leave loading’ – “The answer isn’t yes or no, it’s, it depends. And a payroll system can’t generally figure that out by itself.”

3. Processes – fraud, inefficiency, errors, governance, and control

This is where we see not just over and under payment issues but issues around fraud, inefficiency, and errors “Until everyone who touches payroll is above suspicion of any fraudulent activity, it means your processes are not sound enough,” warns Angwin. The other important thing Angwin said is you must be doing regular process and compliance audits on your payroll function. “Most importantly,” adds Angwin, “They have to be done by a certified payroll expert, not an accountant – accountants are good at lots and lots of things, but payroll auditing is generally not one of them.”

“Business needs to figure out that payroll is a set of competencies that stand alone – it’s not HR, it’s not finance, it’s not industrial relations but if you get those things right in payroll you should be able to sit back and relax.”

How does your payroll compare? Take this 22 question checklist to find out.

Tracy Angwin
Tracy Angwin is the CEO of Australian Payroll Association and sought out for her commentary and guidance on all payroll topics, including why employers get payroll wrong and optimising the payroll function.

Tracy is driven by a belief that payroll is a business critical function that can have devastating financial and emotional consequences if botched.  It is impossible to have a high performing, motivated and engaged workforce, if payroll isn’t correct and delivered on time.

Australian Payroll Association is on a mission to provide confidence in how employees are paid.  This includes delivering payroll advisory and consulting as well as specialist payroll training and qualifications.