Hiring Your First Employee and Payroll Simplified

Ready to take the leap from solopreneur to employer? Hiring your first employee is exciting but can feel overwhelming. Let's break down when it's the right time and how to handle payroll without losing your sanity.

You're ready to hire when you're consistently turning down good work because you don't have time. If you're working 60+ hour weeks for months and still can't keep up with demand, it's time to get help. Look at your finances too. Can you afford to pay someone for at least 6 months, even if business slows down? 

Start by identifying what tasks eat up most of your time that someone else could handle. Administrative work, customer service or routine tasks are often good starting points. Don't hire someone to do the work only you can do, hire them to free you up for high-value activities. Also consider, could you outsource specific tasks to freelancers or contractors? This gives you flexibility without the commitment of payroll, superannuation and employment law compliance.

Once you've decided to hire, payroll becomes your new reality. Payroll software makes this manageable. MYOB Payroll is excellent for small businesses. It handles all tax calculations, processes PAYG withholding, calculates superannuation contributions and integrates with Single Touch Payroll for ATO reporting. 

Xero Payroll works well if you're already using Xero for your accounting. Everything integrates seamlessly and you can run payroll right from your accounting software. Remember, payroll isn't just about cutting cheques. You'll need to register for PAYG withholding, set up superannuation contributions and ensure you're compliant with Single Touch Payroll reporting requirements.

Set up a payroll schedule and stick to it. Most small businesses pay weekly, fortnightly or monthly. Whatever you choose, consistency is key. Your employees need to know when they're getting paid and you need to plan your cash flow accordingly. Keep detailed records of everything. Hours worked, overtime, annual leave, sick leave, document it all. This protects both you and your employees and you'll need these records for ATO and Fair Work compliance. Don't forget about your obligations under the Fair Work Act. You'll need to understand minimum wage rates, penalty rates for overtime and weekend work and annual leave entitlements. 

Take your time to find the right person, set up proper systems and don't be afraid to ask for help when you need it. Got questions about managing your books? Schedule a call and let me know what you're struggling with, we're here to help!