Do you know that you could actually obtain financial assistance from the government if you outsource your payroll tasks to an accredited payroll services provider? This government assistance is more popularly known as the PAYE subsidy that especially favours small employers like you. If you are not taking full advantage of the PAYE subsidy, then you’re missing out on a great opportunity to streamline your business operations at the government’s expense.
The Root of the PAYE subsidy
You are mandated by law to make deductions on your employees’ gross wages on behalf of the Inland Revenue Department. This Pay as You Earn (PAYE) system has also since been expanded, so now employers are also required to deduct employee contributions and other financial obligations (e.g. payment for child support) from their employees’ salaries as well.
On the surface, such an arrangement seems ideal. The funds you are able to withhold can be used for business operations until such time when you are required to turn the deductions over to Inland Revenue. Funds withheld from your employees’ wages could therefore help you recover from temporary cash flow problems. However, costs for non-compliance (e.g. you failed to deduct PAYE off your employees’ wages) are quite steep.
By carrying out your payroll functions yourself, you incur opportunity costs. The time, effort and money spent on making and preparing your employees’ payrolls and doing other payroll-related activities are resources that could have been spent on more important activities.
PAYE Subsidy Basics
PAYE subsidy was the government’s response when it became apparent that the PAYE system represents a crippling inconvenience and a major expense especially to small businesses. Through this scheme, the government would pay you money if you let a professional payroll services provider deal with your payroll.
The PAYE subsidy works this way. You have to outsource your payroll functions to an accredited PAYE intermediary or payroll agent. Then, for every employee you have (the number of employees is capped at five), the government will pay $2 every pay day. Of course, the subsidy is paid out as a lump sum and is paid directly to your payroll agent. This way, you pay your payroll services provider only the balance after the government subsidy has been duly claimed and applied.
Maximising PAYE subsidy benefits
It’s clear to see how you could benefit from the PAYE subsidy. The direct benefit is the subsidy itself which can make payroll management outsourcing much more affordable for you. Significant indirect benefits are also present, however.
Get rid of penalties. The burden of complying with government rules shifts from you to your payroll agent so you no longer risk being fined for non-compliance with tax regulations.
Manage your time better. The payroll agency you appoint will pay your employees’ salary, will make deposits, will file the forms, and do everything else required in payroll management for you. Thus, you get more time for more important endeavours.
Minimise employee disputes. As a fringe benefit, you reduce complaints regarding incorrectly computed net wages since highly trained, experienced and professional accountants would be doing your payroll calculation for you.
So, what are you waiting for? Find your accredited payroll services provider at www.theofficeelves.com now and start maximising your PAYE subsidy benefits.
5 Comments
Mary Erbe
I am a small businessman and I was not aware of this PAYE subsidy benefits. After reading your article I come to know about this. This is really good article for small employers like me. Now I am searching accredited payroll services provider to outsource my company payroll functions. So, that I can take PAYE subsidy benefits. I think this will give me more cash, time and concentration to grow my business. Can you suggest where I can find the list of accredited payroll services providers in my area.
K. Todd Farley
Good article but a note of caution for the readers. Payroll functions may be operated by an existing payroll service provider, accountant, tax professional, which can provide payroll services to an employer. To receive the PAYE subsidy they must first registered. Only some payroll providers are registered as PAYE intermediaries. Therefore, one should be careful to choosing a PAYE intermediary so that employers may be satisfied by their services. So, be careful to ask the payroll intermediary whether they are registered to receive the subsidy.
Mason Belushi
Small employers who pay less than $100,000 in PAYE each year are eligible for a subsidy if they use a listed accredited payroll services provider. This benefit is given by govt. to encourage small employers to outsource their payroll functions so that they can focus on growing their business. The article missed out the eligibility condition of less than $100,000 payment. Anyway, I appreciate your efforts to the article as easy to understand as possible. This is really a good scheme and small entrepreneurs should take advantage of this scheme.
Ana Getz
Good article. However, I wonder about the motive behind such schemes by the government. Is it to ensure that they receive their money fast and accredited payroll services providers are actually government agents to collect the taxes? Or the main motive is to create jobs for accredited payroll services providers. I am finishing school and would be interested to know how one can become an accredited payroll services providers and what are the career options in this field.
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