Understand who is on your payroll and what their income means to you
Many small to medium business owners often find themselves with a range of different types of employees on their payroll, especially as the company grows. Your staff could easily comprise permanent personnel, casual or day workers, as well as those who freelance on temporary contracts.
It’s important to distinguish between these groups clearly when you pay them as it could have serious legal ramifications if an employee is classified incorrectly. This could also have direct tax implications for your business, as well as the level of company contributions you need to pay for them.
The payroll software from QuickBooks can help you work out exactly how your personnel should be categorised. We also offer regular updates on tax law and statutory upgrades. Contact us on 0861 726 657 to learn more about how we can help you.
Payroll software to help you make the right payment
One of the major differences in employees is between those getting paid wages and those who earn a salary. These two terms can’t be used interchangeably as they have implications on how the remuneration is calculated and tax is paid. Another type of worker to consider is a freelancer who is on a contract for a set period of time or until the conclusion of a particular project.
Learn the difference:
- Wages – These employees are given an hourly rate and tend to be paid on a weekly basis. This means that the amount they’re paid every week can vary depending on time spent working.
- Salaries – This is when an employee earns a fixed amount per week or month. However, they’re expected to work a certain number of hours each week and generally tend to have a higher level of responsibility than those who are paid a wage. The amount paid is usually worked out according to a yearly total and then divided over 12 months.
- Contract workers – A freelancer should be invoicing your company for the agreed-upon amount and often pays their own tax. Many employers prefer not to be responsible for the tax of someone who is hired on a contract basis.
If you feel you need more help, you can always enrol in one of the payroll courses we offer on our software at QuickBooks. Contact us today on 0861 726 657 to learn more about how to reimburse those on your payroll.