Payroll tax can be complex and is often misunderstood by small businesses. This is mainly due to the threshold amounts of wages on which the tax is paid varies based on each state, making understanding the definition of wages and what is included in regards to remuneration confusing. Keeping track of annual leave, sick leave, termination leave etc. is tough to calculate and establish in an accounting system, making registrations collection a difficult process. To ensure accurate calculations, it is essential for businesses to understand their obligations regarding taxes and employee entitlements.
To ensure the efficient and accurate recording of payroll taxes, it is essential to properly define and standardise the process. This includes establishing what wages are exempt from the payroll tax, as well as ensuring that all data pertaining to salary costs and payment summaries are accurately recorded. If done correctly, this will enable easy recording and payment of these taxes. Additionally, clear communication between employers and employees regarding the withholding of taxes should be established in order to avoid any potential discrepancies or errors.
Get started with a complimentary introduction appointment to learn more about our payroll compliance services.
