Hiring your first employee: payroll obligations to plan for

An overview of PAYG withholding, payroll reporting, super and workers compensation checks.

Hiring an employee creates payroll and employment obligations that are separate from paying a contractor. Plan the setup before the first pay run.

Depending on your circumstances, you may need to register for PAYG withholding, collect tax file number declarations, calculate withholding, and report payroll information through Single Touch Payroll.

Employers also need to check superannuation guarantee obligations, the correct award or agreement, leave entitlements and workers compensation requirements for their state or territory. Super rates and payment timing can change, so check the rules that apply on the date wages are paid.

Set up a reliable process for timesheets, approvals, payslips, payroll records and payment dates. If you are unsure whether someone is an employee or contractor, get advice before deciding how to treat the arrangement.