Why ePayroll is a Better Option (than Employing an In-House Officer)

It is the purpose of this section of the eEasyTax website to demonstrate that it is a better option for the employers in Australia to utilize our ePayroll services instead of employing a payroll officer performing payroll functions for their organization.

Basically, ePayroll will:

• enable wages savings up to 50%;
• eliminate the need to arrange temporary replacement during leave of absences of the in-house officer; and
• achieve probably better staff performance in yielding the desired results.

How Does ePayroll Work?

Before providing details on how ePayroll works, we would like to introduce our Organisation Chart for ePayroll for the next 2 years.

As shown, we are planning to assist the payroll functions of a maximum of 4 companies from 2024 to 2026.

A member of the Management Team has been assigned as the Manager of the ePayroll Centre responsible for the overall day to day management, including training and supervision of the ePayroll Team Members.  He will be assisted by a Centre Secretary.

For each company, ePayroll will assign a Liaison Officer whose duty is to assume the role of bridging communications between the company and ePayroll.  The Liaison Officer, based in the Philippines, will be working on Australian working hours and officers of the Australian company are free to contact the Liaison Officer by email, instant messenger or by phone.  

For each company, ePayroll will also assign a minimum of 2 Team Members to work on the payroll of the employees of the company.  The Team Members will be working on the payroll of the employees of the company everyday when ePayroll receives timesheets so that payroll calculations for each employee will be up to date 24 hours after receiving the timesheets which could be sent from the company to ePayroll daily, if possible.  Any officers of the company can contact ePayroll Team Members via email or the instant manager program.  

From a communication point of view, any officers of the company can contact ePayroll Team Members, the Liaison Officer, the Centre Secretary, and the Centre Manager via email, instant messenger or mobile phone on a 24/7 basis.  

This way, any emergency instructions, including calculations of terminal pay for any employees under summary dismissal will be able to be attended to in the shortest period, normally within 2 to 3 hours, given the fact that payroll calculations are always up to date 24 hours after receipt of the daily timesheets.

At present, ePayroll uses Xero in meeting the Single Touch Payroll requirements of ATO.  However, ePayroll can specifically train its staff to utilize any special payroll packages the Australian employer desires us to use.

Monetary Savings

From a monetary saving point of view, the minimum wage for an adult worker in Australia in Jun 2024 is $45,905 per annum, as confirmed by the following snipshot:

According to the National Award for Payroll Officer, employers must also pay:

• Superannuation– 5% of salary
• Annual Leave– 4 weeks per year
• Annual Leave Holiday Loading– 21.5% of holiday pay
• Carer’s Leave– 10 days per year
• Long Service Leave– per Award
• Worker’s Compensation Premium – around 2% of salary

The practical implication will mean that the total amount to employ a payroll officer will be at least 1.2259 times of the basic salary, even if we ignore the Long Service Leave and the Worker’s Compensation premium.

Bing, an AI program, advised that the average salary for a payroll officer in Australia is $80,618 per annum; below is a copy of Bing’s comments.  By the time when we add the amounts for the first 4 items above, the employer will be looking at an annual outlay of $98,829.  This amount is excluding wages payable to replacement staff during the absence of the payroll officer on leave.  If this element is included, we will be looking at over $100,000 per annum.

Replacement Staff while Payroll Officer is On Leave

If the employers opt to use our services, they will be paying around $50,000 per annum and there is no need to organize replacement for the in-house payroll officer during his absences on leave.

We know by law that any full-time worker in Australia is allowed 4 weeks Annual Leave and 10 days Carer’s Leave per year.  These are their statutory entitlements.  Normally, employers will have to organise replacement staff to perform the payroll duties when the in-house officer is on leave.  The advantage of using ePayroll is that because ePayroll employs a number of Team Members to perform the duties, there will be no need to worry about getting a replacement.  This arrangement not only simplifies the procedure but also enables better performance in minimizing possible errors created by the temporary replacement.

The Myth for the Need in Employing In-house Employees

One of the advantages of employing in-house payroll officer is that it enables the employer to give instructions to the payroll officer face to face, thus minimizing any misunderstanding in communication. To an extent, this is the most important advantage in employing a local member.

However, employers must take into consideration of the following factors, in considering using ePayroll as an alternative solution:

• ePayroll’s Management Team is consisted of 3 senior accountants with hands-on experience in running businesses in both the industry and the profession.  The ePayroll Manager is a native English speaker experienced in training.  Our Centre Secretary and our Liaison officers are trained payroll personnel with effective English skills.  We expect no communication gaps both in terms of payroll accounting concepts & practices, and the English language skills.
• Covid-19 had prevented employees from returning to work and opened the door to allowed workers performing duties on a remote basis; this alternative arrangement has introduced a new element in the corporate working practices in that more and more organisations are beginning to accept remote workers as a corporate norm.  Indeed, at the end of the day, it is the finished product that counts, and not necessarily the need to give verbal instructions to a local member, face to face, which matters.
• During the past year, almost everyone in the corporate world is talking about AI and the likely adverse impacts in the future history of mankind.  There are so many prophecies about many of the office tasks being replaced in the AI era and we, as managers, must prepare ourselves to face the challenges ahead.  One of the most important considerations is of course, we must be prepared to adopt changes, including critically looking at reducing our expenditure in any possible way.  In this regard, a saving of $50,000 a year on the salary of a Payroll Officer, is not an amount to be sniffed at by any business operation.

Conclusions

• ePayroll will reduce the amount of wages and related payments by 50 percent, or around $50,000 a year.
• ePayroll will also eliminate the need for staff replacement during the local member’s absences on leave.
• ePayroll is consisted of experienced payroll personnel with good communication skills.
• ePayroll will enable at least comparable, if not a superior, outcome because the way the tasks are performed.
• Covid-19 had altered the corporate working culture in that more and more business entities are adopting remote work as the norm.