28 Oct 2015

Lets Address The Elephant In The Room!!!

Ok, unless you have been hiding under a rock for the past week you would know that BookPals has launched!!!

So I was talking to a friend of mine yesterday and he came out with the following statement -

"Your bookkeeping thing looks great - but how do I process staff pays?"

I just stared back, smiled and asked -

"How do you process pays now?"

To which he replied -

"I just "times" the hours my guy works by his hourly rate - then I check how much tax I have to keep out of his pay - and then I pay him the rest."

I just looked at him and said "That's it!!!"

Here's the thing - for years we have had bookkeeping systems being created that have all these fancy payroll option things attached to them and my question is - WHY?

You know how to pay your staff - 'cause you've been doing it for years - so why do you need to turn into some kind of "computerised payroll expert" when you start using bookkeeping systems?

And the answer is YOU DON'T!!!

That's why BookPals has taken the mystique out of running pays.

Have a look at the image below and tell me if it looks familiar to you -

So what have you got - you've got "Dean's Weekly Pay" where Dean gets paid $1000.00 gross a week and you hold $183.00 in PAYG Withholding (that's the name of the tax that gets withheld from gross wages to anyone outside of Australia reading this) and $817.00 gets withdrawn from your bank account and paid to Dean (it can either be paid to Dean's bank account or given to him in cash - whatever is best for you and/or Dean!!!).

That's it - you've just run your staff's pays!!!!

"Where do I find out how much tax to keep from Dean's pay?" I hear you say and my response is
"Where do you now?"

Do you have a copy of your country's tax withholding tables in your office drawer?

Is Dean on a set wage (i.e. salary) and you found out how much tax to withhold from his wages from your Accountant at the beginning of the financial year?

Do you look it up online each pay period?

The thing is, you're doing something to work out how much tax to withhold from Dean's wages now - so you just keep doing the same thing!!!

"But hang on" - I hear you say - "What about his superannuation?"

Have a look at this image -

This is as hard as adding two new lines to Dean's pay above - you already know how much super you have to pay your staff (in this example it is 9.5% of Dean's gross wages) so you get your calculator out and you "times" his gross wages ($1000.00) by his super rate (9.5%) and presto - you get $95.00!!!

"But why have you got $95.00 listed twice - I'm only paying him once?"

Ok, so this is the closest you'll get to an accounting lesson in this whole thing, but let me make it easy for you - you need it there twice because you haven't actually paid Dean's super yet - you've just put it away in safekeeping until it comes time to pay it - in other words it's sitting in that little "piggy bank" (probably your business bank account) and you're just showing this in your bookkeeping records on the bottom line of that image above.

"So what do I do when I pay Dean's super?"

That's easy - have a look at the image below -

It's as simple as taking the money out of the "piggy bank" and paying it into Dean's super fund from your bank account -

That's It!!!

There is nothing difficult about paying your staff - and when you start using BookPals you can either do it as easily as I described above - or if you aren't interested in doing it, get a bookkeeper inside the XLerator Community to do it for you and you can do all the rest of the bookkeeping yourself.

Start using BookPals - it really is going to make your business bookkeeping easier and more straightforward.

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