Holidays Act 2003, that little phrase is enough to put the shivers up most business owners, or if it doesn’t it should!  Having gained a lot of experience with payroll over the past few years and becoming members of the NZ Payroll Practitioners Association (NZPPA), we have learned there is a lot more to payroll than simple data entry! You have to THINK PAYROLL and be aware of all the areas that could trip you up, because the software that is available is not perfect.  

That said, there are some very good payroll software providers but not all software is created equal.  Some are obviously better for certain industries while others are more general.  What is important when choosing payroll software is to ensure you are looking at the right options for your industry or business structure.

Once you have settled on the software it all comes down to dealing with different scenarios and interpreting them correctly.  This is where your data entry person or general administrator can get tripped up, and sometimes it might be years and thousands of dollars later that you find the mistake!  That is when you realise that perhaps having a specialist payroll provider who THINKS PAYROLL might have been a good idea!

Here is a good example, you have an employee who was full time before Covid hit, but now things have changed so they, or you, have decided to cut back their hours and now rather than working 40 hours per week they are only working 20.  So that’s simple right, they are only entitled to half the annual leave (let’s leave out public holidays for this one but that is an issue that also needs to be dealt with in this scenario).  So, you are correct BUT have you updated their contract or informed them of this and are they okay with it?  If this has not been done, then you as the employer are still liable to pay them the full amount of annual leave as if they had been working full time!  And that can add up to quite a lot over a few years.

This is just one example, and it also highlights the need for your payroll professional to be in regular contact with your HR provider to ensure things like this are dealt with correctly.

So next time you think about getting a data entry person or office administrator to pop some numbers into the payroll system, perhaps get in touch with a provider who THINKS PAYROLL!

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