What is payroll?¶

Payroll is everything involved in paying the people who work for you. It is more than moving money into a bank account. Each time you pay your staff, a few things happen together.

You work out the right pay, hold back some tax for the ATO, set aside super, give each person a payslip, keep a record, and report the pay to the ATO.

In one line

Payroll is paying your staff correctly and, at the same time, handling their tax, their super, their payslips, your records, and your report to the ATO.

Why this matters¶

Payroll touches your staff's pay and their entitlements, so getting it right matters to them and to you. Knowing the parts helps you see that a single pay run does several jobs at once, not just one.

What you will learn¶

What payroll is in plain terms
The main jobs payroll covers each pay
Why payroll is more than paying wages

Understanding the concept¶

Payroll brings together a handful of jobs. Each pay run usually involves:

Paying wages. You pay each person the correct amount for the work they did.
Withholding tax. You hold back an amount of tax and send it to the ATO. This is PAYG withholding (pay as you go withholding, or PAYGW).
Super. You set aside superannuation (super) — money paid towards each eligible person's retirement.
Payslips. You give each person a payslip that shows their pay and the amounts taken out.
Records. You keep records of the pay and hours.
Reporting. You report the pay to the ATO through Single Touch Payroll (STP) each time you pay staff.

Some of these come from workplace law, which Fair Work looks after. Others come from tax and super rules, which the ATO looks after. The next lesson explains who handles what.

For accountants & bookkeepers

Payroll sits across two authorities. Fair Work covers pay, payslips and record-keeping. The ATO covers PAYG withholding, super guarantee and STP reporting. A single pay run produces obligations under both.

Example¶

Sam runs a small cafe and pays two staff each fortnight. When Sam runs the pay, the staff receive their wages, an amount of tax is held back for the ATO, super is set aside for each of them, and each person gets a payslip. Sam also keeps a record of the pay and reports it to the ATO. All of that is payroll.

Common mistakes¶

Thinking payroll is only the wage payment — it also covers tax, super, payslips, records and reporting.
Forgetting the payslip — each person is entitled to one after they are paid.
Skipping the record — the pay details need to be kept.

How this works in myaccountant¶

In the app — you set up your employees and run a pay run. myaccountant works out the PAYG withholding and super, produces payslips you can email to your staff, lodges STP to the ATO for the pay run, and keeps your payroll records.

Key points¶

Payroll is everything involved in paying your staff.
Each pay run does several jobs at once.
You pay wages, withhold PAYG tax, and set aside super.
You give payslips, keep records, and report to the ATO through STP.
Fair Work and the ATO each look after different parts.

Learn next¶

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

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