One of the most significant success milestones for small businesses and entrepreneurs is employing their first staff member; it’s an accomplishment that symbolises business growth and prosperity. However, inducting a staff member, especially payroll, can be complicated, especially with a lack of payroll experience or staff management skills. In this article, we share with you our five tips to setting up your first staff member with payroll and outline the pitfalls to be wary of during this tricky process.

Establish employment type

The type of employees you have dictates many staffing decisions in your business. The most common type of contractual employees are casual, part-time and full time; however, there are many other options depending on your industry. Establishing your type of employees allows you to address better pay structures, contracts, rostering, and the specifics of the role, especially the division of hours.

Address minimum wage requirements

Don’t get caught out by underpaying your staff, as this is an error most first-time employers make. Paying your team the right amount for their age and industry falls under your legal obligations, and you are best to understand these requirements as soon as possible. Generous award rates are also a valuable tool to foster staff loyalty and low staff turnover, as employees value employers who recognise their worth. Other pay requirements as an employer include tax withholding, which is dependent on the salary and nature of employment, as well as superannuation contributions, which required factoring into the pay cycle.

Find a payroll system

Paying your staff through antiquated payroll systems, such as cheques or manual bank transfers, positions your business for failure. Invest in a dynamic and easy to use payroll system, that allows you to program in staff hours and automate their payments to them directly and their superannuation funds. Electronic payroll systems are valuable for record-keeping, as it centralises staff data into one convenient location that can be shared with other team members as your business expands.

If in doubt, get help

Delivering accurate and timely payroll can be very challenging, especially for small businesses and entrepreneurs with high task loads and stretched schedules. Outsourcing your payroll systems is an excellent way of ensuring your payroll is completed by professionals, who understand payment and superannuation requirements, as well as how to handle salary issues, such as public holiday deadlines, leave accruement, and taxation requirements.