Have your payroll managed and always paid correctly
Getting payroll wrong is not a minor administrative error, it is a legal liability that compounds silently with every pay run
Payroll services for small businesses in Melbourne
Packages start at just $150 per month & the first consultation is free.
- If you have not reviewed your award rates since the last Fair Work Commission Annual Wage Review, there is a very high probability you are underpaying at least one employee right now, and that underpayment is growing with every pay run that passes
- Deliberate underpayment of wages is now a criminal offence in Australia, and the distinction between deliberate and inadvertent is determined by investigators rather than by your own assessment of your intentions, which means getting payroll wrong is a risk that extends well beyond an administrative fine
- Super paid one day late is not a minor timing issue, it triggers the Superannuation Guarantee Charge which is not tax deductible, includes compounding interest calculated from the beginning of the quarter, and requires an SGC Statement lodged with the ATO that most business owners do not know they are required to complete
- STP Phase 2 requires every pay run to be reported to the ATO with disaggregated income type classifications, and if your payroll system was configured before Phase 2 and has not been reviewed since, the income type data being submitted to the ATO every payday is very likely incorrect
- Payslips that do not include specific prescribed information including the employer ABN, pay period dates, and super fund contribution details are non-compliant under Fair Work regardless of whether the amount paid to the employee was correct, and the fine for non-compliant payslips applies per employee per pay period
- Every hour you spend processing payroll yourself is an hour spent managing a compliance function with real legal consequences using knowledge that is almost certainly less current than it needs to be, and the cost of getting it wrong is invariably higher than the cost of having a professional manage it from the start
Get payroll management for your business done by a professional bookkeeper in Melbourne
Payroll is the most compliance-intensive function a small business manages on a regular basis. It involves obligations to the Australian Taxation Office, obligations under the Fair Work Act, obligations to the superannuation system, and reporting obligations through Single Touch Payroll that flow directly to the ATO every payday. All of these must be met correctly, on time, for every employee, every pay cycle, and the consequences of getting them wrong have become significantly more serious in recent years.
- Deliberate underpayment of wages is now a criminal offence in Australia.
- The Superannuation Guarantee Charge for late or missed super is not tax deductible and compounds from the start of the quarter.
- ATO data matching through STP means payroll errors are increasingly visible in real time rather than surfacing only at the end of the year.
For most small business owners managing their own payroll, the risk is not dishonesty or indifference. It is incomplete knowledge applied under time pressure, with genuinely competing demands on the same limited hours.
The gap between what the relevant Modern Award actually requires and what the payroll system has been configured to pay is where liability accumulates silently, invisible in the accounts, until a Fair Work audit, a departing employee’s back-pay claim, or an ATO compliance notice makes it visible at exactly the moment when addressing it is most expensive and most disruptive.
What a bookkeeper does to manage your accounts payable
The Nature of Payroll Compliance
- Payroll is not pressing a button in Xero or MYOB and transferring money to employee bank accounts.
- It is a layered compliance function that requires correct setup, current knowledge of a legislative environment that changes every year, and consistent execution across every pay cycle without exception.
- Each component of that function has its own requirements, its own deadlines, and its own consequences when it goes wrong.
Award Classification and Annual Reviews
- Before the first pay run is processed, every employee must be classified under the correct Modern Award at the correct classification level for their role and experience, and the minimum rate for that classification must be confirmed against the current Fair Work award schedule.
- Fair Work reviews minimum award rates annually and the updated rates take effect from the first full pay period after the relevant date each year.
- A business that set its payroll rates when it first hired staff and has not specifically reviewed them after each annual review is likely paying at least some employees at rates that are no longer legally compliant, with the underpayment growing with every fortnightly pay run that passes.
PAYG Withholding Calculations
- The PAYG withholding calculation must be applied from the correct ATO tax table for each employee’s individual circumstances, including their residency status, whether they have a HECS-HELP debt, any tax offset claims they have made, and the frequency with which they are paid.
- Applying the wrong table produces either under-withholding or over-withholding, both of which create problems for the employee’s annual tax return and both of which reflect poorly on the employer when the discrepancy eventually surfaces.
Leave Entitlements and Accruals
- Leave entitlements including annual leave, personal leave and long service leave accrue at rates set by the National Employment Standards and the applicable Modern Award.
- The payroll system must be configured to accrue each type of leave at the correct rate from the employee’s first day of employment, and the accrual calculation must reflect the correct ordinary hours for the employee’s role and classification.
- If the configuration is wrong from setup, every subsequent pay run accrues leave at the wrong rate, producing balances that are incorrect and a termination payment liability that does not reflect what is actually owed when an employee eventually leaves.
Superannuation Obligations
- Superannuation is currently calculated at 12 percent of each eligible employee’s ordinary time earnings, a definition that includes most regular wages and most allowances but excludes overtime in most cases.
- The contribution must be calculated on the correct earnings base, processed through a SuperStream-compliant clearing house, and received by the employee’s fund before the quarterly deadline.
- A payment that leaves the business’s bank account on the due date but takes several days to reach the fund through the clearing house is a late payment for SGC purposes, and a single late payment triggers a Superannuation Guarantee Charge that is not tax deductible and includes compounding interest calculated from the beginning of the quarter.
Single Touch Payroll (STP) and Payslip Requirements
- Every pay run must be reported to the ATO through Single Touch Payroll on or before the day employees are paid.
- Under STP Phase 2, the report must disaggregate income into specific categories including ordinary wages, paid leave, overtime, allowances and salary sacrifice, all reported separately rather than as a single gross figure.
- Incorrect income type classification in STP flows directly into each employee’s pre-filled tax return and can affect their Centrelink entitlements, Family Tax Benefit assessments and child support calculations.
- Fair Work requires payslips to be issued within one business day of payday, and payslips must contain specific prescribed information including the employer’s ABN, the pay period dates, gross and net pay, all allowances and deductions separately itemised, and the super fund and contribution amount for that pay period.
What payroll errors actually cost a small business
The financial consequences of payroll errors in a small business are rarely visible in real time. They accumulate in the background over months and sometimes years, invisible in the accounts, growing larger the longer they remain unidentified and unaddressed.
The steel manufacturer case study we shared includes a payroll component that illustrates exactly this pattern. Payroll had not been reconciled for more than twelve months, which meant that the wages recorded in the accounting software and the actual payroll payments made to employees had diverged over an extended period without anyone identifying the discrepancy.
The reconciliation of the payroll records was part of the broader remediation work that ultimately recovered more than $15,000 in identified errors and corrections across the full file.
The caulking company case study demonstrates a super-specific dimension of the payroll problem. The previous bookkeeper had no SuperStream clearing house set up for super contributions, meaning the super process was manual, unreliable, and at ongoing risk of producing late payments that would have triggered SGC consequences.
Once the process was restructured with proper clearing house integration, the super obligation was met correctly and on time within a simplified system that cost a fraction of what the previous arrangement was charging.
Read the full case study.
A Fair Work back-pay claim covering two years of incorrect award rates for three employees, including the superannuation that should have been paid on the underpaid wages, can reach tens of thousands of dollars. An SGC assessment for super paid outside the quarterly deadline, including compounding interest and the per-employee administration fee, costs more than the original super liability would have.
An ATO review triggered by STP data mismatches is time-consuming, stressful and potentially expensive even when the errors were entirely unintentional. None of these outcomes are unusual for businesses that have been managing their own payroll without specialist support.
How a bookkeeper can manage payroll for Melbourne businesses
We manage payroll for small businesses across Melbourne and nationally, working within MYOB, Xero and QuickBooks across industries including hospitality, healthcare, real estate, trades, professional services and consulting.
Every employee is set up under the correct Modern Award classification with the correct rates applied from day one. PAYG withholding is calculated from the correct ATO tax tables for each employee’s individual circumstances. Leave accrues at the right rate from the beginning of the employment relationship.
Super is calculated on the correct earnings base, processed through a compliant clearing house, and initiated early enough to ensure receipt by the fund before the deadline.
STP is lodged with the ATO every payday.
Payslips are issued within one business day. Award rates are reviewed and updated following each annual Fair Work Commission wage review so that the business is always paying at or above the current legal minimum without the owner needing to monitor the process themselves.
From July 2026, Payday Super will require superannuation contributions to reach the employee’s fund within seven business days of every payday, changing super from a quarterly obligation to a per-payday one. Matthew prepares his payroll clients for this transition well in advance, adjusting the payment process and cash flow planning so that the change in obligation does not become a source of SGC liability for businesses that were not ready.
Payroll services are available as a standalone service or as part of a broader bookkeeping package that includes bank reconciliation, accounts payable, BAS lodgment and financial reporting. Packages start from $150 per month and the first consultation is free.
Frequently asked questions
How do I know if I am paying the right award rates?
The Fair Work Commission publishes current award rates updated following each Annual Wage Review, and the applicable rates depend on the award covering the industry, the employee’s classification level within that award, and whether any enterprise agreement applies.
Matthew reviews the award classification and current rates for every employee as part of the onboarding process and updates them following each annual Fair Work review, so the business is always paying at the correct legal minimum without the owner needing to track the changes themselves.
What is STP Phase 2 and does it affect my payroll?
Single Touch Payroll Phase 2 expanded the information reported to the ATO with every pay run, requiring employers to disaggregate gross income into specific categories including paid leave, allowances, overtime and salary sacrifice, all reported separately rather than as a single gross figure. It is the current reporting standard for all Australian employers.
If a payroll system was set up before Phase 2 and has not been specifically reviewed and updated for the Phase 2 reporting requirements, there is a reasonable chance the income type classifications in the system are currently incorrect and the STP reports being lodged do not reflect what the ATO requires.
We have casual staff with variable hours. Can you manage that?
Yes. Casual payroll with variable hours, including the correct casual loading under the applicable award and penalty rates for evenings, weekends and public holidays, is a standard part of the payroll management service.
For businesses using rostering tools including Deputy, Tanda or RosterElf, Matthew can receive approved timesheets directly from those platforms and process payroll from the timesheet data, removing the manual hours entry step and significantly reducing the risk of pay run errors that originate in incorrectly transcribed timesheet information.
What happens to payroll when an employee leaves?
Termination payments involve specific calculations for unused annual leave, unused long service leave where applicable, and in some cases redundancy payments or payment in lieu of notice. The tax treatment of each component differs from regular wages and must be applied correctly both in the payroll system and in the STP report marking the employee as ceased.
Matthew manages the full termination process including the final pay calculation, the payslip, the super obligation on the termination payment where it applies, and the STP finalisation entry.
What does payroll management cost for a small business?
Payroll management is priced based on the number of employees and the frequency of pay runs. As part of a broader bookkeeping package it is included within the monthly package structure. The first consultation is free and Matthew will provide a clear indication of what is involved and what it will cost before any engagement begins.