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Payday errors rampant as new laws kick in

More than two out of five Australian workers say they experience issues with their pay, including late payments and underpayments, as small businesses continue to grapple with an incoming compliance change.

Business Jotham Lian 30 September 2019
— 1 minute read

A survey of 1,000 Australian workers by Xero and Dynata has found that payday problems are widespread across Australia, with 43 per cent of workers experiencing issues with their pay, rising to 49 per cent for those employed by small businesses.

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The most common payment errors include incorrect salary payments at 24 per cent, late salary payments at 22 per cent, underpayment of salary at 22 per cent and overpayment of salary at 10 per cent.

Late payments, which increased to 29 per cent in small businesses, caused two in five employees to feel less engaged and productive at work, with one-third considering leaving their job as a result of being paid late.

“There are a number of reasons why employees might be experiencing anomalies with their pay, but the majority of employers try to do the right thing when paying staff,” said Matthew Prouse, head of industry at Xero Australia.

“Small businesses can sometimes have issues due to manual payroll processes, where the likelihood of error is much higher.”

The survey findings come ahead of today’s deadline for small businesses with 19 or fewer employees to become Single Touch Payroll compliant.

Mr Prouse believes the new compliance law change will help small businesses cut down on payday errors.

“Single Touch Payroll is a new way of working that will help small business owners to streamline their operations,” he added.

“It makes it easier for employers to do the right thing and will be a catalyst for greater accuracy, security and efficiency when paying employees.”

However, as of 26 September, only approximately 380,000 small businesses were reporting through STP, out of the estimated 750,000 small business population.

Tax Office data has also revealed that only 4.19 per cent of small employers are covered by a deferral or exemption, or have been granted a quarterly reporting concession.

Payday errors rampant as new laws kick in
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Jotham Lian

Jotham Lian

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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