Payroll Calculator for Small Businesses

Payroll Calculator for Small Businesses: One of the most essential things for a business in Australia is calculating and managing payroll systems. Especially if you are a business in Australia, it’s not easy to manage payroll under such strict laws and regulations.

We consider that for small businesses, it’s more difficult to calculate payroll rather than the large ones as they have access to more sources and facilities, whereas the small business have to look after all the factors on their own.

If you are a small business in Australia who’s tired of calculating payrolls and is confused about the tax concerns, you have a simple tool at your hand- Australia’s Payroll Calculator for small businesses.

In this guide, we’ll tell you all that you need to know about Australia’s Payroll calculator, how and why you should use it.

How does the Australia’s Payroll calculator for small businesses work? This calculator is a very user friendly and time saving tool made by the ATO for Australians. It allows you to manage your expenses and calculate them in a snap. Small businesses especially are always looking for money saving deals and options, therefore this tool is a perfect fit for them.

You have to enter your or your employee details such as the wage or salary, expenses, deductions, credits etc. Once you put all these required details in the calculator, it will automatically generate a report of the amount of taxes you have to pay or the salary you owe to your employees.

The best thing is that you don’t have to worry about any errors or mistakes since it is accurate and covers all of Australia’s tax obligations. 

Payroll Calculator for Small Businesses
Payroll Calculator for Small Businesses

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How to Calculate Payroll for Small businesses?

Here’s a small step-by-step guide to calculate payroll for small businesses in Australia:

  1. Calculate Employees Income

Firstly you have to calculate your employees gross income, including all additional pays, overtime, bonuses, allowances etc.

  1. Calculate Taxable Income

Calculate all the deductions and exemptions. Then calculate the portion of the income that is subjected to tax.

  1. Calculate the amount withholding

Calculate the PAYG (Pay as you go) withholding using the ATO’s Payroll software. This is the amount that an employer withholds from the employee’s income to give to the ATO.

  1. Superannuation Contributions

Calculate the Superannuation contribution you need to make on your employees behalf. The current rate is set at 11% of your employees regular income.

  1. Payroll Tax

If your business has reached the minimum payroll threshold in Australia, then you are required to pay payroll tax. The current rate of payroll tax in Australia is 5.45%.

  1. Maintaining all the Records

You have to maintain all the records of the payments and contributions you have made such as pay stubs, superannuation contributions, PAYG withholding and payroll tax payments. Keep all records of transactions.

  1. Reporting Payroll

After all these steps have been done, the last and the most important step is reporting at the ATO. You have to lodge a BAS, make tax summaries and summary reports and provide this all to the ATO.

How is the Small Business Tax Calculator Used? 

Using this calculator is a very simple and uncomplicated process. To begin with, you should have all your annual records and receipts with the help of which you will put data in the calculator.

Enter your gross income and the expenses or deductions that you need to make from that income.

After entering all the information into the respective categories, press the ‘calculate’ button to know the remaining income.To estimate from different perspectives, you can change amounts to see how different situations can affect your income.

With this easy to go tool at your hand, you can easily calculate your incomes and also have an estimate about your business expenses and financial management.

Payroll Calculator for Small Businesses
Payroll Calculator for Small Businesses

Common Avoidable Mistake while using Australian Payroll Calculator for Small Businesses

For small businesses, this calculator is a tailor made fit. It is the best and the most affordable option for them as it saves them from the cost of other softwares or accountants. By providing all the accurate results, helping you analyse your business from different scenarios, this tool is just unstoppable!

But, for accurate results, you also need to provide accurate information. It is one of the most common mistakes people make, which can lead to miscalculations and loss for your business as well. Therefore, enter all the correct data and double check before calculating.

Also keep all the receipts and details for accurate information.

Benefits of Using Calculator for Small Businesses

Here are a few of the many benefits of using this Australian payroll calculator for small businesses:

  • Saves your Time:

Time is one of the most important elements for small business. They already have a lot to look after, that too, manually. From all the employee information to the daily operations, all on their own. Therefore, time has a huge significance for them.

Now, that’s where this calculator comes in handy. It saves you all that time that would take you manually to calculate the payroll which can also result in errors. This is an error-free time saving tool.

You can utilise the same time with some other of your business tasks. That way you can also think about different business ideas and how you can grow your business.

Moreover, it is available at any time of the day just with the access of the internet. You can put information in it and get your desired results within a second.

  • Provides Accuracy:

Accurate results are important for all businesses to save themselves from the mistake of overpaying or underpaying.

Also, inaccuracy can result in penalties from the ATO and can also ruin your business’s reputation in front of the employees and in the market too.

This calculator is made by the ATO and is up-to-date with all the tax rules and obligations. So, there’s no chance that your correctly put information will give you inaccurate results from this calculator.

  • Saves you Money:

This tool also saves your money as small businesses are already struggling with a lot of other finances. It saves you from the finances of installing some huge softwares or hiring an accountant for your business.

You just need the internet to access this calculator at any second of the day.

  • Helps you with your Deductions and Credits:

This calculator also helps you in recognizing your business deductions and credits. 

It provides the list of expenses you can claim as deductions. These expenses are related to your business such as travel expenses, office supplies etc. You can claim them back.

Moreover, this tool also helps small businesses acknowledge the tax credits they can receive. 

Therefore by using this tool, small businesses can stay compliant to the Australian tax rules while still saving themselves money.

  • Helps you with your Financial Plannings:

As small business owners can struggle with affording a tax accountant, therefore this tool can help them with all their future business expenses and plannings.

They can put whatever amounts they want to in that calculator and know how different amounts and situations can have an impact on their small business.

It keeps you prepared and estimated for different situations along their way.

Wrapping Up

Payrolls often cause more damage to a business than any other thing. In such a lawful country like Australia, it’s not easy to stay compliant with all the rules on your own. And taking penalties is also not easy for small businesses.

Therefore this tool can help you with all your payroll management and tax obligations. Give it a try!