Employing Staff – Guide for New Employers
You will need to check the award wage rate at Fairwork to ensure you are paying the correct rate. Read the award thoroughly to ensure you capture all the correct policies under the award.
Ensure you provide an employment contract that states all the details, including (but not limited to):
Start date
Employment basis
Hours of work
Conditions around breaks
Leave entitlements
Salary or hourly rates
Previously, the employer would provide the new employee with a Tax File Declaration Form and a SuperChoice form. Now the Employee must access their MyGov account and enter the new employer (you will need to provide the ABN for the business to the new employee), where they will download a document with the tax and super details to provide to the employer. This must be kept on file.
The superannuation rate is currently (FY2024) calculated at 11% of the gross wage - this is paid to the employees super fund via a ‘clearing house’ and is ON TOP of the gross wage.
Superannuation must be paid at least quarterly – although we recommend to pay per payrun for cash flow purposes. By July 2026 it is likely that paying super per payrun will be legislation anyway, so get used to it now.
Superannuation must be paid to a clearing house, who will then disperse the funds to the employees superannuation funds.
We recommend the Xero clearing house which is built into Xero.
Provide the employee with the National Employee Standard information sheet
If they are casual, you must also provide them with the Casual Employment information sheet
Provide employee with an employee details form to complete for the following details:
Bank account
Medical conditions/allergies
Emergency contact
Make sure you provide the new employee all your policies and procedures so that expectations can be met.
Ensure you have read up on contractor vs employee rules if paying contractors:
Once payroll is set up in Xero, it will calculate the correct PAYGW and superannuation for your employees.
Payslips must be sent to the employee within one day of payroll – this can be done via Xero.
Employees may submit leave requests via Xero – Xero will keep track of annual and personal (sick) leave.
The NET pay amount must be paid to the employee. Xero will not pay automatically. A bank transfer must be made.
Payment can be done by downloading an .aba file from Xero and uploading this file into your bank
The file will contain all the details to pay the employee.
PAYGW is kept by the employer, who must pay the PAGYW to the ATO on a monthly or quarterly basis.
We recommend putting this amount aside into a savings account each payrun so it is ready to pay to the ATO when required.
STP – or Single Touch Payroll – must be set up in Xero. Xero will connected to the ATO. You must report each payrun on the day it is run to the ATO via the STP reporting function. Once set up it is a simple click of a button.
Year End STP Finalisation must be completed by 14th July each year. Employees Income Statements will show as TAX READY in their MyGov accounts once the process has been completed. Income Statements have replaced PAYG Payment Summaries and Group Certificates.
