Did you know that small business account for nearly 98% of Australia’s commercial enterprises? Of these, sole traders account for 62% which means that there are close to 800,000 businesses owned and operated by one person. While sole traders are simple and cost effective, there are significant risks and in many cases this structure is not appropriate.
Employing staff incorporates a significant amount of risk and responsibility for a business owner, although the benefits of a team can be amazing and help a business to grow rapidly.
Looking to hire staff?
If you are looking to take the step and expand, it’s important to get it right from the beginning. Regardless of whether you are looking for part-time or full-time staff, you must educate yourself on what is required via Fair Work Australia. There is a significant level of compliance including superannuation, wages and withholding taxes, ATO reporting insurances and other legal requirements. If you fail to comply, the penalties can be quite harsh, and business owners are expected to be informed.
How do I know what the regulations are?
If you visit business.gov.au there is a page titled “People” and then “Hiring.” The small business section of fairwork.gov.au also has pay calculators. Small business owners should also have policies in place that address diversity in the workplace, sexual harassment and provide clear guidelines for staff who have a complaint.
If you choose to move to a commercial location to accommodate your growing team, it is your responsibility to ensure it meets the health and safety requirements. Reports show that up to 115000 serious workers compensation claims were made between 2018 – 19. In 2019, more than 180 employees were fatally injured on a job.
Insurance cover is essential
Taking out worker’s compensation insurance and other business insurance is essential for a small business. The guidelines can vary per state so it is important to look up the legal requirements of your state. The premium may be based on the wages you pay and the industry you operate in. SME businesses are often the most vulnerable when it comes to employee claims. It is important for business owners to seek advice from a qualified insurance broker, as all policies are not the same, and it takes experience to select the appropriate cover for your business.
Single Touch Pay Roll
Your business must also register the employee under single touch payroll. This can be managed by your book keeper or accountant.
If you are looking to expand your business make sure you do your research to ensure you are complying with current laws and regulations. If you need guidance, Aspect and Advisors West Perth are here to help.