Do you know that you could actually obtain financial assistance from the government if you outsource your payroll tasks to an accredited payroll services provider?  This government assistance is more popularly known as the PAYE subsidy that especially favours small employers like you.  If you are not taking full advantage of the PAYE subsidy, then you’re missing out on a great opportunity to streamline your business operations at the government’s expense. 

The Root of the PAYE subsidy

You are mandated by law to make deductions on your employees’ gross wages on behalf of the Inland Revenue Department.  This Pay as You Earn (PAYE) system has also since been expanded, so now employers are also required to deduct employee contributions and other financial obligations (e.g. payment for child support) from their employees’ salaries as well. 

On the surface, such an arrangement seems ideal.  The funds you are able to withhold can be used for business operations until such time when you are required to turn the deductions over to Inland Revenue.  Funds withheld from your employees’ wages could therefore help you recover from temporary cash flow problems. However, costs for non-compliance (e.g. you failed to deduct PAYE off your employees’ wages) are quite steep. 

By carrying out your payroll functions yourself, you incur opportunity costs.  The time, effort and money spent on making and preparing your employees’ payrolls and doing other payroll-related activities are resources that could have been spent on more important activities. 

PAYE Subsidy Basics

PAYE subsidy was the government’s response when it became apparent that the PAYE system represents a crippling inconvenience and a major expense especially to small businesses.  Through this scheme, the government would pay you money if you let a professional payroll services provider deal with your payroll. 

The PAYE subsidy works this way.  You have to outsource your payroll functions to an accredited PAYE intermediary or payroll agent.  Then, for every employee you have (the number of employees is capped at five), the government will pay $2 every pay day.  Of course, the subsidy is paid out as a lump sum and is paid directly to your payroll agent.  This way, you pay your payroll services provider only the balance after the government subsidy has been duly claimed and applied. 

Maximising PAYE subsidy benefits

It’s clear to see how you could benefit from the PAYE subsidy.  The direct benefit is the subsidy itself which can make payroll management outsourcing much more affordable for you.  Significant indirect benefits are also present, however. 

Get rid of penalties.  The burden of complying with government rules shifts from you to your payroll agent so you no longer risk being fined for non-compliance with tax regulations.

Manage your time better.  The payroll agency you appoint will pay your employees’ salary, will make deposits, will file the forms, and do everything else required in payroll management for you.  Thus, you get more time for more important endeavours.

Minimise employee disputes.  As a fringe benefit, you reduce complaints regarding incorrectly computed net wages since highly trained, experienced and professional accountants ^[1] would be doing your payroll calculation for you. 

So, what are you waiting for?  Find your accredited payroll services provider ^[2] at www.theofficeelves.com ^[3] now and start maximising your PAYE subsidy benefits.