One of the most satisfying things about having a small business, aside from owning your time, is that you also get to provide job opportunities for other people in your community. Unless you plan to run your business solo, employees are integral parts of any business. Without them, it would be difficult to operate and grow in an increasingly competitive market.

For their time and effort, your workers require fair and on-time compensation. This is the reason payroll is such an important aspect of every business operation, whether it’s a large corporation or a small business entity.

In New Zealand, as with all other countries for that matter, managing payroll can be a full-time job. You have to maintain employee records and navigate changing labour laws to avoid steep fines and penalties. Unless you have an accountancy background or have a staff member who does, it can be difficult for you to handle yourself. Luckily, if you’re an entrepreneur in Dunedin, NZ, it won’t be hard to hire accountants Dunedin companies trust with matters like their payroll management.

Having professional help when it comes to processing your payroll leaves you more time to focus on the core operations of your business. That said, as the head of your company, it’s always beneficial to learn every part of your business, including payroll management. Here’s a brief guide on how to manage your payroll and achieve high employee satisfaction and retention:

1. Maintain Compliance with Wage Laws

As an entrepreneur, you are responsible for staying compliant with up-to-date government regulations relevant to your business, including labour laws. In New Zealand, employers with one or more employees are required to withhold income tax and remit it to the Inland Revenue Department (IRD) under the country’s Pay as You Earn (PAYE) system. Moreover, New Zealand protects workers from abuse with minimum wage requirements that are dependent on the industry.

Non-compliance with the country’s labour laws may result in steep fines and even jail time. But even if this was not the case, you should demonstrate your commitment to ethical business practices and employee well-being by adhering to these laws.

2. Plan and Implement Clear Payroll Guidelines

To achieve a smooth payroll process, you must also prepare and implement payroll guidelines that abide by NZ’s labour laws. For instance, if the employee comes in late, should there be deductions on their pay? If there are commissions to be credited to their payroll, how should this be computed?

There should also be transparency in payroll processing, where infractions and benefits are clearly outlined in the payslip. What’s more, you should establish payment schedules, overtime policies, and any other relevant payroll procedures to provide clarity and consistency for everyone involved. This includes your HR staff, bookkeeper, and accountants.

3. Keep Accurate Employee Records

It’s important to maintain accurate employee records for payroll accuracy and compliance. Employee records include the hours worked, leaves taken, and any other relevant information to ensure that each of your employees is compensated correctly.

To ensure accurate records, you can build structured processes, such as a leave calendar and timesheets, and share them with employees. Using official forms and processes, employees can properly account for their leaves, overtime pay, commissions, and the like. It would also be good for you to invest in biometrics technology for a more accurate time stamp for your employees or a cloud-based time clock app for employees working remotely.

4. Invest in a Reliable Payroll System

If you plan to process your payroll in-house, you should also invest in a more robust and easy-to-use payroll system than the one you may be using today. In doing so, you’ll be able to reduce errors and streamline your payroll operations.

Look for a system that meets the specific needs of your small business. Whether it’s a cloud-based software or an integrated accounting solution, it should boast features like automation and direct tax filing to help simplify payroll tasks.

5. Consider Outsourcing Your Payroll Process

For many small business owners with multiple employees, outsourcing payroll can be a cost-effective and efficient solution. Outsourcing allows you to leverage the expertise of payroll professionals who can handle complex payroll tasks on your behalf. This not only frees up your time to focus on growing your business but also ensures accuracy and compliance with NZ’s payroll regulations.

6. Link Payroll System to Employees’ Bank Accounts

Are you still paying your employees with cash or checks? If so, you may be wasting a lot of time and effort on your payroll. It’s time to offer direct deposits as a convenient and secure way to pay your employees.

You can ensure timely and hassle-free payments without the need for paper checks by linking your payroll system directly to your employees’ bank accounts. This not only saves time and resources but also provides added convenience for your employees since they can access their salary via ATM or digital wallet.

Your effort to manage your payroll efficiently will contribute greatly to employee engagement, leading to boosted morale and productivity. Whether your business will be handling your payroll in-house or outsourcing the process to professionals, the most important thing is that your employees will always be correctly and promptly compensated. If this is something that you can always guarantee them, they will reward your organisation with excellent work ethic and company loyalty in return.