Payroll checklist for new employers¶

Taking on your first employee means setting a few things up before pay day. Some steps are handled with the ATO (the Australian Taxation Office), and some with Fair Work (the Fair Work Ombudsman). This checklist walks through the main ones.

Working through these steps before your first pay run helps you pay staff correctly from the start.

In one line

Register for PAYG withholding, use STP-ready software, collect a TFN declaration, offer super choice, check award pay rates, and set up record-keeping.

Why this matters¶

Getting set up correctly before your first pay run means the right tax is withheld, super is handled properly, and staff are paid at the correct rate. It also means your reports to the ATO and your records are right from day one.

What you will learn¶

The main steps to set up payroll
Which steps are ATO steps and which are Fair Work steps
What to have ready before your first pay run

Understanding the concept¶

Here are the main setup steps for a new employer.

Register for PAYG withholding with the ATO. If you employ people, you must register for PAYG withholding (Pay As You Go withholding) before you start withholding tax from pay. This is done with the ATO.
Use STP-ready software. You report each pay to the ATO through Single Touch Payroll (STP). To do this, you need payroll software that can lodge STP.
Have new employees complete a TFN declaration. A TFN declaration (tax file number declaration) tells you how much tax to withhold. Your employee gives you this information when they start.
Offer a choice of super fund. You generally offer eligible new employees a choice of super fund. If an employee does not choose one, you may need to request their stapled super fund from the ATO — this is the fund already linked to that employee.
Check pay rates and conditions. Most employees are covered by an award — a document that sets minimum pay rates and conditions for an industry or job. Check the correct award and minimum pay rates with Fair Work before you set your pay.
Set up record-keeping. You must keep employee records, pay slips, and tax and super records. Set up a way to keep these from your first pay run.

For accountants & bookkeepers

The steps split across two regulators. The ATO covers PAYG withholding registration, STP reporting, the TFN declaration, and stapled-fund requests. Fair Work covers pay rates, awards, minimum wages and record-keeping periods. You must also give every new employee the Fair Work Information Statement before, or as soon as possible after, they start — and new casual employees the Casual Employment Information Statement as well.

Example¶

Jordan is hiring a first employee. Jordan registers for PAYG withholding with the ATO and sets up STP-ready software. The new employee completes a TFN declaration, and Jordan offers them a choice of super fund. Jordan checks the relevant award for the correct pay rate through Fair Work, and sets up a place to keep the payroll records. With those steps done, Jordan is ready to run the first pay.

Common mistakes¶

Running a pay before registering for PAYG withholding.
Using software that cannot lodge STP.
Not collecting a TFN declaration from a new employee.
Guessing the pay rate instead of checking the relevant award.
Leaving record-keeping until later instead of setting it up first.

How this works in myaccountant¶

In the app — myaccountant is STP-ready. You set up your employees, and each pay run works out the PAYG withholding and super, produces pay slips, and lodges the STP report to the ATO. Your payroll records are kept for you from the first pay run.

Key points¶

Register for PAYG withholding with the ATO before you withhold tax.
Use software that can lodge Single Touch Payroll.
Have new employees complete a TFN declaration.
Offer a choice of super fund, or request the stapled fund.
Check the relevant award for the correct pay rate with Fair Work.
Set up record-keeping before your first pay run.

Learn next¶

General information only — not tax, super or financial advice.

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