Gold Partners Share Payroll Trends & Tips for the New Financial Year

Payroll can be intimidating, and with the current government talking about the Holidays Act, change could be on the cards this new financial year. Thankfully, two of our awesome Gold PayHero partners - Di and Irene - are here to share their expertise on how to set yourself up for success. 

Di Crawford-Errington - Ontrack Bookkeeping 

What emerging trends do you see in payroll management for the new FY?

Employers rely on software too heavily without understanding the legislation, but this is starting to shift. There's a lot more awareness of payroll rules and that it's easy to get it wrong. As you (PayHero) know, people can’t expect the software to do everything. You need to critically think about what you’re selecting and how you’re setting up people and pay codes. Due to the complexity, businesses are beginning to view payroll as a profession, instead of a back office, data entry job. 

What do you recommend businesses do to tighten their processes and minimise costs?

Things are tough for many businesses and changes are being made, but what I’m seeing is some of these changes are knee-jerk reactions, rather than strategic thinking. Take a strategic look at your business. This might involve getting support from someone who can help you or it might just be taking yourself out of the business for a day or two and putting some things down on paper. It’s amazing what a difference it can make to go somewhere new to do this thinking. At Ontrack, we provide consulting support to help employers look at systems and processes, set up payroll, and provide them with ongoing support if they need it.

What are some common payroll mistakes and how can they be addressed?

Paying leave incorrectly. To fix it, you need to know how leave works and ensure you are following legislation, as opposed to what you think should be happening. 

What is your top payroll tip?

Create an employment contract with all the details, and make sure payroll can handle it. For example, if an extra week of leave is offered as an incentive, employers should know what this looks like. Can this extra leave be cashed up? Does it need to be taken in one block? Also, if it’s included as annual leave, you can determine in the contract that accrued holiday pay will remain at the required 8%, rather than increase with the extra week to 10%. If you don't add this, people might be getting overpaid. Employers need to understand the effect that statements written into a contract have on payroll and ensure both parties understand the parameters.

What is your favourite thing about PayHero?

PayHero keeps the leave in weeks, as per legislation. There is software that claims to keep the leave in weeks, but it’s actually based on hours and therefore is still incorrect. PayHero does this really well and it's why we partner with the product.

Learn more about Di and what her team offers at Ontrack Bookkeeping.

Irene Bennetts - Admin Army

What emerging trends do you see in payroll management for the new FY?

The message about compliance is starting to reach the small business community, not just the big enterprises, as you are acknowledging the risk profile it presents. We are seeing more people be proactive and recognise that their previous payroll has not necessarily been calculating holiday pay correctly. 

Also, people want a payroll system that can be automated as much as possible. That’s why we love PayHero AutoPilot as the combination of compliance and automation is gaining traction in the broader market. PayHero will get you as close as you can to complying with the Holidays Act, but it’s still important for businesses to understand the legislation as there’s still a level of interpretation that exists on this piece of tricky legislation. 

What do you recommend businesses do to tighten their processes and minimise costs?

Businesses working with a bookkeeper or accountant could lower their pay frequency. At Admin Army we have a fixed fee for each pay run, so if you decrease the cadence it halves our work and halves the cost profile for our clients. I’m not necessarily an advocate for moving to monthly payroll, but a fortnightly cycle is a nice middle-ground as employees are still receiving funds regularly and it’s easy to budget. 

Adjusting the pay cycle is also a good option for businesses doing payroll in-house, as there are already so many hidden costs with processing payroll. You might think payroll only takes 10 minutes to complete, but there is a huge amount of time spent communicating with staff and educating them on different topics. Recently I spent 30 minutes with someone to help them understand their leave balance. Managing these questions and training takes a lot of time, not to mention fixing a pay that has been processed incorrectly. That’s the whole beauty of delegating to people who are experts in that area. 

What are some common payroll mistakes and how can they be addressed?

Storing leave in anything other than weeks. Even storing in weeks has its perils, but at least that’s what the legislation says. 

What is your top payroll tip?

Outsource to an expert. We offer a payroll health check to get a snapshot of what’s happening in your payroll software. We take a look at your data and provide a report with suggestions for remediation or improvement. 

What is your favourite thing about PayHero?

The user-friendliness - I hear the same from my team as well. PayHero is pleasurable to use.

Learn more about Irene and what her team offers at Admin Army.

Hundreds of partners are using PayHero to manage payroll processing for thousands of Kiwi businesses. Check out our partner directory to connect with someone in your area. Interested in becoming a PayHero partner? Learn more here.