How to Create a Payroll Processing for Hospitality & Tourism
A comprehensive procedure for calculating, reviewing, and processing staff member wages, superannuation, and PAYG withholding in compliance with Australian employment legislation.
Purpose
To ensure all employees and contractors are paid accurately and on time in accordance with their employment agreements, applicable awards or enterprise agreements, and Australian taxation and superannuation legislation.
Scope
Covers the end-to-end payroll cycle including timesheet collection, pay calculation, deductions, superannuation contributions, PAYG withholding, payslip generation, and payment execution for all employees.
Prerequisites
- Up-to-date staff member records in the payroll system including tax file numbers and superannuation fund details
- Approved timesheets or attendance records for the pay period
- Current award rates, enterprise agreement terms, or individual contract details loaded into the system
- Access to the payroll system with appropriate processing permissions
Includes food safety compliance (HACCP), RSA requirements, liquor licensing documentation, and tourism accreditation record keeping.
Step-by-Step Procedure
Collect and Verify Timesheets
Gather approved timesheets, leave applications, and overtime records for the current pay period from all departments.
- 1.1Send a reminder to managers two days before the timesheet deadline
- 1.2Download or collect approved timesheets from the time-tracking system
- 1.3Follow up on any missing or unapproved timesheets
- 1.4Verify that leave taken matches approved leave applications
- Establish a firm cut-off time and communicate it clearly to all managers
Process Payroll Adjustments
Enter any one-off adjustments for the pay period including new starters, terminations, pay rate changes, back-pay, bonuses, and salary sacrifice arrangements.
- 2.1Process new staff member setups with correct award classification and super fund
- 2.2Enter termination details and calculate final pay including accrued leave
- 2.3Apply any approved pay rate changes effective for this period
- 2.4Enter bonus payments, allowances, or deduction changes
- Double-check termination calculations against the National Employment Standards
- Ensure salary sacrifice arrangements are correctly set up before processing
Run Preliminary Pay Calculation
Process the preliminary payroll run to calculate gross pay, PAYG withholding, superannuation guarantee contributions, and net pay for all employees.
- 3.1Import timesheet data into the payroll system
- 3.2Run the pay calculation for the full staff member population
- 3.3Generate the preliminary payroll summary report
- 3.4Review total wages, PAYG, and super figures against the prior period for reasonableness
Review and Validate Payroll
Perform a detailed review of the preliminary payroll report to identify and correct any errors before finalisation.
- 4.1Compare headcount to the prior period and investigate any discrepancies
- 4.2Review large variances in individual pay amounts against the prior period
- 4.3Verify PAYG withholding amounts are correct for each tax bracket
- 4.4Confirm superannuation is calculated at the current guarantee rate on ordinary time earnings
- 4.5Check that leave balances are accurate and leave loading is applied where required
- Use a payroll variance report to quickly identify amounts that differ from the prior period by more than a set threshold
Finalise and Approve Payroll
Once all corrections are made, finalise the payroll run and obtain authorisation from the designated approver to proceed with payment.
- 5.1Make all required corrections identified during review
- 5.2Re-run the payroll calculation and confirm the final totals
- 5.3Generate the final payroll summary for management approval
- 5.4Obtain written or electronic approval from the authorised signatory
Generate Payment File and Payslips
Create the bank payment file for direct credit to staff member bank accounts and generate individual payslips for distribution.
- 6.1Generate the ABA file or bank-compatible payment file from the payroll system
- 6.2Verify the total payment amount matches the approved payroll summary
- 6.3Generate payslips for all employees in the current pay run
- 6.4Distribute payslips via the staff member self-service portal or email
- Always verify the ABA file total matches the payroll total before uploading to the bank
Submit Payment to the Bank
Upload the payment file to the banking platform and submit for processing, ensuring dual authorisation where required.
- 7.1Log into the banking platform and upload the ABA payment file
- 7.2Set the payment date to align with the scheduled pay day
- 7.3Have a second authorised signatory review and approve the payment batch
- 7.4Record the batch reference number for reconciliation
Process Superannuation and PAYG Remittance
Calculate and remit superannuation contributions to staff member funds via a clearing house and record PAYG withholding for remittance to the ATO.
- 8.1Generate the superannuation contribution file from the payroll system
- 8.2Submit contributions to the nominated super clearing house
- 8.3Record the PAYG withholding liability for the period
- 8.4Ensure superannuation is paid by the quarterly due date to avoid the super guarantee charge
- Process super contributions each pay cycle rather than waiting until the quarterly deadline to reduce risk
Post Payroll Journal Entries
Post the payroll journal entries to the general ledger, ensuring wages, PAYG, superannuation, and leave provisions are correctly recorded.
- 9.1Export the payroll journal from the payroll system
- 9.2Review the journal entry for correct account codes and cost-centre allocations
- 9.3Post the journal to the general ledger in the correct accounting period
- 9.4Reconcile the payroll clearing account to confirm nil balance
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
At least 99.5% of pay calculations are correct on first run, with fewer than 0.5% requiring adjustment.
Employees are paid on the scheduled pay day 100% of the time.
Superannuation contributions are lodged and paid by the quarterly due date with zero super guarantee charges incurred.
Frequently Asked Questions
How do I process a termination payment?
Termination payments must include accrued but untaken annual leave, any long service leave entitlements, and the applicable notice period or payment in lieu. Use the ATO schedule for PAYG withholding on employment termination payments.
Are we required to report payroll data to the ATO via Single Touch Payroll?
Yes. All Australian employers must report payroll information to the ATO through Single Touch Payroll (STP) each time a pay event is processed. Ensure STP reports are submitted on or before pay day.
What is the current superannuation guarantee rate?
The superannuation guarantee rate is set by the Australian Government and increases periodically. Check the ATO website for the current rate applicable to the financial year.
How long must payroll records be retained?
Payroll records must be retained for seven years as required under the Fair Work Act 2009 and ATO record-keeping requirements.
What should I do if an staff member disputes their pay?
Acknowledge the dispute, review the payslip and timesheet records, and provide a written explanation. If an error is confirmed, process a correction in the next available pay run or as an ad-hoc payment if the underpayment is material.
Want this customised for YOUR business?
We'll tailor every step to your exact operations, tools, and team structure.