My painful history with payroll tax

I’ve been running my own businesses in Australia for 20+ years now. Payroll tax has always been a sore point for me, I’m always at a loss as to why we’re being penalised by the state for hiring people? I was under the impression that creating jobs was good thing for the economy…

Added to the pain of the tax itself was the process to calculate and pay each month. It’s easy to make mistakes or to accidentally leave out earnings that should be taxable.

Businesses can easily get caught out not knowing they’ve hit the threshold for payroll tax. It’s proven to be more complex than I thought to manage workers across multiple states, contractors and company grouping rules.

A few years ago, I received an unpleasant back payment request from a random audit from the SRO (revealing we should have included a short term contractor in our calculations).

It’s apparent that most payroll systems fall short when it comes to calculating your monthly payroll tax liability.

Finally, an Australian payroll tax calculator that works for Xero

The absence of Xero being able to do any payroll tax calculation has long been a pain point for users. Most companies use spreadsheets to manage their payroll tax calculations.

Our mission at Paytools is to make payroll better by tackling some of the unloved, manual and ignored problems. We want to replace home grown spreadsheets with secured, verified and maintained online tools.

So I’m excited to announce we’ve released Payroll Tax Manager – an Australian payroll tax calculator for Xero, automatically calculating your monthly liability reading directly from Xero.

With Payroll Tax Manager you can:

  • Automate monthly liability estimates reading Xero pay data
  • View when you’re approaching state tax thresholds
  • Make manual adjustments to include non-payroll earnings
  • Keep who/what/when audit trail of actions

Setup is quick and easy with our AI bot Pat, he’ll automatically map your employee work locations and pay items to be included – all you have to do is review and approve.

Here’s a quick tutorial walking you through how easy it is to calculate our monthly payroll tax liability using our Payroll Tax Manager for Xero.

How to access Payroll Tax Manager for free

If you’re using Xero, you can try Payroll Tax Manager for free as part of our 14-day free trial.

Australian payroll tax calculator

We’ve got a bunch of ideas on how to keep improving Payroll Tax Manager and we’ll be adding more features over the next few months.

We also love feedback so please don’t hesitate to reach out and tell us what you think.