One of the biggest expenses all businesses face, especially in the tourism and hospitality industry, is the cost of wages. Besides purchases of stock, payroll is generally the second highest expense with businesses needing to make sure they are complying with penalty rates, superannuation, WorkCover and payroll tax. However, a recent development will see the cost of employment increasing.
The Fair Work Commission Expert Panel has recently released an announcement that the national minimum wage will increase by 2.4%. This increase will be effective from 1 July 2016 and it will see the minimum wage increase to $672.70 per week.
The FWCEP noted some key economic changes which brought about the review:
- Improvement in the economy over the second half of 2015;
- Real GDP growth of 3 per cent over the year leading to the December quarter 2015;
- Stronger labour market conditions over the past year, and a decrease in the unemployment rate from 6.1 per cent last year to 5.7 per cent this year;
- Higher labour productivity growth than the previous five year period; and
- Increase in company profits of 2.8 per cent over the year to December quarter 2015.
Although this wage review brings with it an increase in challenges, business owners should be aware of the facilities that are available in order to minimise the effects and to help monitor wages as efficiently as possible.
One way that Cloud accounting can help manage this is through the use of the Deputy ‘add-on’. Deputy is an all-in-one employee scheduling, time & attendance and communication software that seamlessly integrates with Xero. Deputy can be used to help track your wage bill on a real time basis so you can ensure your business stays on top of wages rather than it becoming unmanageable.
If you have any questions regarding Deputy and how it can help your business, please feel free to contact our office.