How to read a payslip
The numbering and abbreviations on pay slips can be confusing at times. In this blog article, we explain what to look out for on a payslip and how to read a payslip.
What to look for on a payslip
There are several important pieces of information on a payslip, including:
- Employees’ names. Your payslip should clearly display your employees’ names to ensure it has been issued to the correct person.
- Your business/company name. This is the name of the company or organisation you own and are paying from.
- Your Australian Business Number (ABN). This is a unique identifier that the government uses to track Australian businesses for tax purposes.
- Pay period dates. Your payslips should display the start and end dates of the pay period you are paying employees for.
- Payment date. This is the date that you pay your staff wages on.
- Gross pay. This is the total amount of money earned before any deductions are applied.
- Net pay. This is the amount of money your employees take home after all deductions have been made.
- Taxes withheld. This is the amount of tax that has been withheld from an individual’s pay under PAYG.
- Superannuation. This is the amount of money that has been contributed to your employees’ superannuation fund.
- Leave balances. It’s important to display current leave balances, including annual leave, sick leave, and long service leave, on payslips.
How to read your payslip
Now that you know what to look for on a payslip, let’s go through a step-by-step guide on how to read it:
Step 1: Check your employees’ personal details
Ensure that your employees’ name and other personal details are correct, including their tax file number (TFN) and your business’ ABN.
Step 2: Check the pay period
Check that the start and end dates of the pay period match the dates your employees worked.
Step 3: Check the gross pay
Make sure that the gross pay matches the amount your employee is expected to earn for the pay period. Once your hourly rate or salary is entered into Payroller, gross pay amounts are automatically calculated for you.
Step 4: Verify superannuation, deductions and entitlements
Review superannuation contributions, deductions and entitlements to ensure that they’re accurate.
Step 5: Check the net pay
Check that the net pay matches the amount you are about to pay. This amount is the gross pay minus any deductions. Payroller automates net pay calculations so you’re confident about payroll accuracy.
Step 6: Check leave balances
If your payslips display leave balances, check that they’re up-to-date.