Not for Profit Organisations Employee & Payroll Support
Workers in your not-for-profit organisation can be employees, independent contractors, or volunteers. The status of a worker may affect the tax treatment of dealings between your organisation and that worker.
There may be some confusion in an NFP about who is considered to be:
- an employee – who is engaged and paid a remuneration that may include wages, taxes, superannuation, annual leave, sick leave, and long service leave
- an independent contractor – is an entity or an individual that the NFP may engage in doing a specific project for an agreed price. Some independent contractors may be eligible for superannuation and may need to be included for workcover reporting. Use the ATO tool to determine if the contractor is qualified for superannuation.
- a volunteer – is a person who is engaged to perform tasks or services without a contractual obligation for a monetary value but may need to be covered under the NFP’s insurances.
Processing payroll in a not for profit organisations follows the same compliance principles as any other Australian Business with few extra entitlements.
Katia, our principal bookkeeper, has a long experience working with Not for Profit organisations where she has learned about and dealt with complexities of payroll in the NFP sector, including salary sacrifice/packaging. An NFP may have staff employed under different awards, shift, and working away allowances to attend camps and community events, etc.
Payroll is a very tricky part of bookkeeping in any organisations, and there are many factors to be taken into account:
- ensure to follow the Fair Work’s National Employment Standards a minimum if the NFP does not follow a specific award
- record-keeping of employee and payroll information needs to be kept, including the record of hours, payroll information, contracts, tax file number declaration forms, super choice forms, and personal details. An organisation can have employees under different awards and agreements; therefore, monitoring the classifications, levels, rates, and conditions can be cumbersome – we can help to point you in the right direction
- allowances including shift allowances, working away allowances, working overnight (camps), travel allowances, telephone allowances, first aid allowances, etc
- salary sacrifice/salary packaging can be interpreted as an employee at any business can sacrifice part of their wages into super. In an NFP, an employee can also sacrifice part of their wages before tax to go into their mortgages, rent, etc. this is available to employees of NFP’s who have been accepted as Public Benevolent Institutions.
- monitoring and journaling leave liabilities, monthly quarterly or annually
- analysing payroll expenses against budget
- seeking approval from the signatories for payroll payments
- super & PAYG reconciliations, reporting and submissions including payslips, SGC, STP & IAS
- set up an efficient, easy to follow system including security, confidentiality, and privacy, taking into account the organisation’s policies and procedures
- liaising with the auditor for any payroll and bookkeeping matters
In conclusion, we are here to help you by passing on our knowledge and expertise to take you a step further to achieve your organisation’s goals and support you while you help your communities. We strongly believe in having work, family, and community values. Here are my top 5 Values:
- Empowerment: we think we have to empower each other to promote optimism and a ‘can-do’ attitude that gets things done faster and better to build healthy families, organisations, and communities
- Ethics: Our ethics define who we are. This virtue helps us provide the foundation to make sound judgments when faced with ethical dilemmas for our clients.
- Professionalism: A professional environment establishes respect for authoritative figures and clients, and colleagues.
- Commitment: Commitment is one of the most important values an organisation must have to meet its goals and stick to its vision. Without motivated individuals, an organisation could lose all that they have earned over the years, be it respect or market position.
- Efficiency: Efficiency allows organisations to promote better work practices, reduces stress, and produce better outcomes.
LET US KNOW HOW WE CAN HELP YOU TO PUT YOUR NUMBERS IN THE RIGHT SPOT.
Stay tuned for our next blog, in which we talk about reporting in the NFP sector.