Did you know that payroll in NZ is one of the most complicated in the world and with the complexities of the Holidays Act 2003 you certainly can’t use a ‘set & forget’ or ‘one size fits all’ approach to your payroll?
Running a payroll is possibly one of the most important tasks for an employer and your hard-working employees will certainly expect that you will get their pay 100% correct. The Holidays Act 2003 and Wages Protection Act 1983 are complex pieces of legislation and can be interpreted differently depending on your understanding of payroll legislation and compliance. Suitable payroll software, an understanding of legislation and best practice, and most importantly, regular payroll audits can help reduce the risk of errors and non-compliance
So, you may ask, what is a payroll audit, why should you do one, when and how often?
It is simply that – an audit of your payroll set up and processes to ensure compliance and accuracy. It checks that your employees are being paid as per their employment agreement, and that their payments / deductions comply with New Zealand legislation. It also ensures that proper payments and employee contributions are made and that leave entitlements are applied and being paid correctly and at the correct rate.
Employee details change all the time, including days and hours of work, pay rates and many other changes. To avoid underpaying or overpaying your staff and to make sure you are in line with current legislation and paying your staff correctly a payroll audit should be a regular occurrence in your business.
There are so many factors to consider:
Check you are not overpaying or underpaying your staff (are you paying at least minimum wage?). Auditing your payroll regularly can stop small problems turning into big ones as well as help to avoid incorrect IRD filings and penalties, external audits, and grumpy employees.
Depending on the type of business, employee changes and types of employee contracts this could vary, however you should consider doing an audit if any of the following occur:
Conducting a payroll audit is crucial to your business as it provides that necessary check that you are compliant with our very complex payroll legislation and in turn gives your staff confidence that you are paying them correctly. If you have any questions, concerns or would like assistance conducting a payroll audit please get in touch with us at 3rd Arm Admin as our staff are certified payroll experts. Feel free to call us on 04 2329199 or fill in your details below and we will be in touch.