Is your pay correct?
Ahhh, pay day.
For some, the best day of the week/fortnight/month and for others, a dreaded day where money comes in and flies out the window on bills and paying for the lifestyle.
Regardless of which category you fall in to, you should always check that you are being paid the correct amount.
Your payslip explained
Your pay slip shows more than just checking that you have been paid for the hours that you worked. Here are some items on your payslip that you need to check:
- Gross Pay
- This is your earnings for the pay period BEFORE tax and other deductions have been considered.
- Net Pay
- This is the amount of pay that you should receive after deductions and tax have been taken out.
- This line is your pay in the future. Generally, Superannuation is compulsory savings of a portion of your pay to access in your retirement.
- CHECK that this amount is paid at a minimum of 9.5% of your ordinary time earnings (OTE).
- CHECK that this amount is actually been made to your super fund each quarter.
- This is the amount of tax that is being held on our behalf. Generally, tax is paid on most types of income, and PAYGW is where your employer pays the tax on your behalf through the year, with the amount being finalised with your Income Tax Return.
- Check that the correct amount of PAYGW is being held on your behalf. The ATO has resources, including this online calculator for you to check here
- If you have been studying at University, you are likely to have a HECS/HELP debt. This is where the Australian Government has paid your course fees on your behalf, with the amount to be paid back when your income reaches a certain amount.
- The repayment income thresholds change each year, with repayments being compulsory when your annual wages are more than $51,957 for year ended 30 June 2019. These change each year and can be checked here
- These can be varied depending on your contract, but for any amounts to be deducted from your pay, you would have had to sign a document to confirm that this can be done.
- Always check that these deductions are as you expect, and if in doubt, ask for the documentation so that you have a copy for your own records.
- Leave Accrued
- Where you are employed as a ‘permanent’, you are entitled to receive annual leave and sick/personal leave. The accrued amount and balance may be included on your payslip – this is not compulsory however.
- If you are unsure of your entitlements, check your employment contract, or speak with your payroll officer.
- Bank Accounts
- The fun part, this is where the bank account for your pay is listed.
- Many employers offer deposits for more than one bank account – a great opportunity to take one step out of budgeting by having saving and spending automatically allocated.
In a Nutshell…
Take a moment on your next pay day, to actually read your payslip in detail.
Check that you are being paid everything that you are entitled to, and if in doubt, speak with your accountant or payroll officer for clarification.
We have payroll solutions as certified partners with Xero, MYOB, Quickbooks and Epayroll.
If you have any doubts as an employer, contact us to arrange a Payroll Health Check – New Financial Year special – if you hire 5 or less employees we can complete a payroll health check for you for $199.00
- Karen Patterson