The Australian payroll system is one of the most complex in the world, costly to administer and needs to be reformed.
Last year, payroll administration cost Australian businesses $2.16 billion, and with so many complicated and different regulatory requirements, corporate compliance issues and laws for each state, companies are needlessly spending hours on payroll rather than devoting time to improving employee engagement and increasing productivity.
Dear Government, wake up now!
Government across Australia, State and Federal, should recognise that this is a huge overhead for business and an unnecessary bureaucratic cost.
It is complicated and time-consuming to administer and with eight states and territories and a Federal Government, staying on top of compliance sometimes feels like keeping up with Mo Farah in a marathon.
For example, annual leave accruals are governed at Federal level under the Fair Work Act, whereas long service leave is covered at State level.
Throw in the complexities of parental leave, part-time work, sick leave, redundancy, and various tax and superannuation requirements, and payroll can turn into a task that is not only frustrating and time consuming, but expensive too.
What good will payroll reform do?
Simplifying payroll will have significant impacts on the bottom line of many businesses across Australia. Although outsourcing payroll eases the pain for many businesses, real changes need to come from the top at both State and Federal levels.
Think of it like this: outsourcing is the painkiller, reform is the cure…
Granted, outsourcing can simplify things for many businesses, but in order to really make a difference to increased productivity by many companies in this country, the payroll legislation must be streamlined.
Cutting administration payroll costs and allowing management to devote their time to achieve greater employee engagement, will in turn lead to a more productive workforce.
However, payroll reform alone will not be enough
In order for Australian companies to be truly competitive on the international stage, reform should not be limited to payroll, Government should also look into the red tape associated with industrial relations legislation and Australia’s overly complex tax systems for business.
Of what use is so much regulation? Australian businesses are weighed down by the burden of unnecessary regulatory obligations that other countries don’t have to deal with.
If we are to realistically compete internationally, whatever the industry – tourism, education, services, or the motor industry – we need to get rid of expensive and complicated systems.
I therefore urge politicians to examine the current overly complex payroll, tax and industrial relations regulations and call on the Government to fix costly red tape that is wasting business billions of dollars each year.
Dean Morelli is a human resources and payroll expert and the founder and Managing Director of Aussiepay, an Australian provider of outsourced payroll solutions.