Knowing what payroll tax is and how to handle it can be a tricky situation for many businesses. Using payroll outsourcing can be a huge help in avoiding future payroll tax audits and in providing an extra layer of security to your pay system. Accounting for payroll tax can be a complicated process, and we hope to simplify it through this article.
Paying Attention to Payroll Tax
Being able to be aware of payroll tax is the first step to taking care of it. Many times, the simple fact that many businesses were unaware of it is what caused them to suffer later on and to be audited. Payroll services in Australia can be of great help here, as professionals will be able to offer you the insight and the tools you need in order to understand how to keep track of this tax and how to pay it.
In Australia, if your business pays out over a certain amount of money in a year, then it is considered that you have exceeded the payroll tax threshold and you will need to pay the government a portion of this income, usually somewhere around 5% of the total payroll for all of your employees. This includes all of the salaries, wages, bonuses and deductions for each employee as a total sum. Depending on the state that you are located in, rules will vary. However, the general rule is that you must enroll within a week after the end of the month when your business reached the payroll tax threshold and begin making payments soon thereafter. By working with a reliable payroll service, you can avoid a lot of complications and issues with this important task. More details!
Tips to Keep Payroll Tax Down
There are many ways in which businesses can help keep their payroll tax as low as possible beyond simply using payroll outsourcing. Here is a short list of ways that you can use personally to help keep your payroll tax down:
By using bonus and wage dividends instead of full wage and bonus packages. This is a great way to lower your payroll tax while still being able to reward your hard workers appropriately.
When you are doing your best to save your company money, it is important that you be personally aware of the payroll tax threshold and the time limit on payments. If you aren’t, you could end up relying entirely on someone else and they may or may not come through for you when needed.
Change Your Business Model
Changing the way that you do business can help you lower your payroll tax. This could involve reducing work hours and using independent contractors. This is very open ended and varies from business to business.
By using all of the tips and resources mentioned, you should be able to begin understanding payroll tax more thoroughly and to see changes that will help your business save money in the long term. By knowing all of the details involved, and working with a professional payroll service, your business will be on the way to success in no time. For more details, visit: https://www.forbes.com/sites/johntharvey/2019/08/22/three-reasons-to-be-in-favor-of-a-payroll-tax-cut/#53a802437a07