Key takeaways
- Learning how to do payroll comes down to a repeatable process: gross pay, tax, super, net pay, Single Touch Payroll reporting, then paying the tax and super by their due dates.
- The process is the same whether you are running payroll for one employee or five, so a system that works now will scale as you grow.
- Payroll software for small business removes the manual work and the guesswork from tax and super calculations and STP lodgement.
- Good payroll software calculates tax and super, generates payslips and lodges STP automatically.
- Handling small business payroll manually risks a missed STP lodgement or a miscalculated super amount, which becomes a headache later.
- Easy Business App handles payroll for a small team from $14.95 a month, with Single Touch Payroll and super built in.
Running payroll for the first time can feel more daunting than it is. Once you understand the steps and have the right tool, it becomes a quick, routine job. Whether you are working out how to do payroll for your first hire or tidying up the process for a team of five, the fundamentals are the same.
What payroll actually involves
At its heart, payroll is the process of paying your staff correctly and reporting it to the ATO. For each pay run you need to:
- Calculate gross pay for the period
- Withhold the right amount of tax
- Work out super
- Pay the net amount to each employee
- Report the pay run to the ATO through Single Touch Payroll
- Pay the withheld tax and the super by their due dates
For a small team, this happens every week, fortnight or month, depending on how you pay. The steps do not change with the size of the team, which is why the same process works whether you are running payroll for one employee or five.
How to do payroll, step by step
If you are learning how to pay employees, here is the shape of it:
- Set each employee up with their details, tax file number declaration and super fund
- Enter their pay rate and hours for the period
- Let your system calculate tax and super, or work it from the ATO tax tables
- Approve and pay the net wage into their bank account
- Send the STP report to the ATO
- Keep the payslip on record and give a copy to the employee
The parts that trip people up are the tax and super calculations, and the STP reporting. This is where doing it by memory or in a spreadsheet gets risky.
Why software makes the difference
Payroll software for small business exists to take the manual work and the guesswork out of those steps. Good payroll software will calculate tax and super for you, generate payslips, and lodge STP automatically each time you run a pay.
For a small team, the value is not just speed. It is confidence that the numbers are right and the ATO reporting is done. When you handle small business payroll manually, a single missed STP lodgement or a miscalculated super amount can turn into a headache later.
A few things worth looking for in payroll software:
- Automatic tax and super calculations
- Single Touch Payroll built in
- Payslips generated and sent for you
- Support for both employees and contractors
- Pricing that suits a small team rather than a large one
Keeping it simple as you grow
The nice thing about getting payroll right early is that it scales with you. The process for one employee is the same as for five, so a system that works now will still work as you take on more staff.
Easy Business App handles all of this for a small team. Payroll starts at $14.95 a month for up to four employees or contractors, with Single Touch Payroll and super built in, so a pay run takes minutes rather than an afternoon. If you are setting up payroll for the first time, see how straightforward it can be at easybusinessapp.com.
Frequently Asked Questions
- How do I do payroll for a small business? To do payroll, you calculate each employee's gross pay, withhold the right amount of tax, work out super, pay the net wage, and report the pay run to the ATO through Single Touch Payroll. Payroll software for small business does the calculations and reporting for you.
- What is the best payroll software for a small business? Good payroll software calculates tax and super, generates payslips, supports both employees and contractors, and lodges STP automatically. For a small team, look for pricing that suits a small business rather than a large one.
- How do I pay employees? To pay employees, agree a pay rate that meets the award or minimum wage, calculate gross pay, withhold tax, pay the net amount, report through STP and pay super by the due dates. The steps repeat each pay cycle.
- Can I run payroll for just one employee? Yes. Running payroll for one employee follows the same steps as a larger team. Small business payroll software makes a single pay run quick, with tax, super and STP handled automatically.
- How much does payroll cost with Easy Business App? Easy Business App payroll starts at $14.95 a month for up to four employees or contractors, or $29.95 a month for unlimited, with Single Touch Payroll and super included.