Sometimes that’s easier said than done! Recently even large organisations aren’t always getting this right. So, what do you need to do to be compliant?
- Pay an employee as per their employment agreement and their employment type (e.g. casual, part-time, permanent etc.)
- Pay an employee at least minimum employment law requirements
- Ensure that leave and holidays are accounted for and paid correctly
- Use the required calculation or the greater of the required calculations when paying staff ordinary hours, leave and holidays
- Keep employee records and your pay records for at least seven years - more info from MBIE or this DairyNZ factsheet.
- Tally hours worked and pay employees that have varying hours correctly. (This is why recording employee hours each day is so useful.)
- Ensure every employee is receiving at least minimum wage for every hour worked and provide top up payments where appropriate
- Deduct PAYE and send to IRD
- Make any deductions necessary eg. WINZ, KiwiSaver etc.
- Make a payslip available
The information and hours of work inputted into a payroll system plays a large part in whether you are correctly paying employees. If you are not recording accurate time and hours of work data via a timesheet or time recording system, you will not be paying employees correctly - for example holiday pay will be incorrect, and minimum wage top ups may not be happening.
There is a lot of terminology involved in paying employees. For the most up to date and correct information we suggest you look at the MBIE website.
Payroll Software
Completing pay calculations on spreadsheets and using IRD/MBIE tools at home can be sufficient. However, with the complexities listed above and with the added headache of varying hours a payroll company/service takes the hassle out of calculating and paying staff and is more accurate.
Over the past few years there has been a move for farmers to use payroll software. Overwhelming, employers have found that the time savings in doing the calculations and the knowledge that all those records were readily available, outweighed the cost of the software.
If you are considering a payroll system we have put together some handy ideas on what to consider, click here for more information.
Please be aware that this is generic advice and every situation is different. We suggest that you seek your own legal advice before making a decision regarding pay and payroll to ensure that you meet legal requirements.
It’s also important to consider if your payroll provider is selling you a software product or an advisory service. If it is just the software, then you will need both the technical and legal knowledge to operate the software so that it calculates correct payments. If an employee is paid incorrectly the employer is usually required to pay them the correct amount at their cost.
Several payroll companies have partnered with the rural sector to make their products more customised to a farming business. Mention DairyNZ to them to see if they currently have any specials.
Are you a payroll company that would like to be included in this list? If so please contact DairyNZ by email at peopleteam@dairynz.co.nz
