Thankyou Payroll is a payroll intermediary based in Wellington, New Zealand with a triple bottom line approach to business centering on people, planet and profit. Led by strong social and environmental values, Thankyou Payroll is New Zealand’s only carbon zero payroll intermediary and has donated hundreds of thousands of dollars to community groups and projects in the country.
Most recently, Thankyou Payroll not only celebrated 10 years as a business, but also announced their first dividend payment from a social enterprise to its shareholders. We speak with the CEO of Thankyou Payroll - Christina Bellis - on The Holidays Act and the role of technology within the payroll landscape.
What industries do you serve the most of?
We built the platform to primarily service small and medium businesses which makes up 97% of New Zealand’s business landscape. About 10% of our customer base are charities and the other 90% are small and medium businesses. Over the past year we’ve seen notable onboarding in the areas of construction and consumer services like trades people and salons.
What is most valuable to your clients?
On the whole, time is really valuable to our clients. It’s not uncommon in a small business for one person to get saddled with running payroll when they’re not necessarily trained in it but it needs to be done. Payroll can be complex, and clients value our platform that makes it really easy, saves them time and stress, pays their employees accurately and keeps them compliant with the legislation.
What do you think is the most complex part of payroll for any payroll professional?
Understanding The Holidays Act and applying it correctly to payroll. It’s a piece of legislation that is outdated for today’s workforce - it’s like trying to fit square pegs into round holes.
Would you be able to elaborate on specific aspects you feel are harder for people to get right in terms of understanding The Holidays Act?
It comes down to how much they should pay within The Holidays Act and how to be fair. For instance, knowing when to use average daily pay or when to use relevant daily pay, and how that works with sick leave or other specific kinds of leave such as bereavement, etc, and especially with employees on variable hours - something we’re seeing more of in our workforce. Additionally, when you read it, the legislation is not black and white - there is room for interpretation which can make you unsure of the suitable application.
Do you think current payroll systems are set up for efficiently interpreting Holidays Act compliance?
I think you can set up a system as close as possible but it’s hard for a system to automatically deduce every different scenario. Sometimes if you need to change an employment setting in the system to fit a new scenario you might need to apply it a certain way in order to remain compliant.
That’s one reason Thankyou Payroll has a client support team available five days a week. It’s a big point of difference for our company, and it’s important that if our clients need to do something, we want to help make sure that they do it right, and don’t inadvertently create an issue.
Many of us intermediaries are set up as efficiently as possible for The Holidays Act compliance but again, The Holidays Act is not a perfect piece of legislation so it’s hard to get it perfect every time unless the user’s data is entered properly. So we do the best we can to help our clients input the data and manage those tricky situations with the current Holidays Act.
Do you have other ways around ensuring you’re compliant with The Holidays Act?
We’ve just upgraded the area in our system that talks to IRD, and check the compliancy at the same time. We’re also in the process of improving areas of our user interface, and where we can better guide our clients through the entire process to give them a better understanding of how calculations are derived for their checks and balances.
It’s important that employers are still involved in what’s happening with legislation as ultimately it is their responsibility that it’s doing what they think is right which is why we want to enable them to be more associated with the process.
What do you think would improve Holidays Act compliance?
We could improve the education provided for those who are using payroll software. But simply speaking, there needs to be a complete overhaul of the current Holidays Act to better reflect our current workforce. Right now it’s set up for staff that predominantly follow a five day, 40 hour work week, but that’s not the reality anymore and hasn’t been for awhile.
The spirit of the law is reasonably fair but it’s the execution that needs improvement. It’s currently being reviewed and they will make changes because we all know it doesn’t work, but it’s still going to take time before it passes into new legislation.
I’m interested to see how they implement it too - will we simply draw a line in the sand and any leave that has been previously accrued follows the old legislation, or will the new Act need backdating to affect any leave currently owed to an employee? It’ll be interesting!
It’s also important that those at the forefront of reviewing The Holidays Act are including payroll intermediaries in the conversation to understand the issues that we see and what our clients are struggling with. Based on what I can see at the moment, there are voices that are missing from that conversation that could add real value.
What do you think the role of technology plays in payroll?
It’s a really important one. We live in an age where many people expect an app for everything and where automation is widely used to free up time and resources. The rise of intermediaries has been immensely beneficial for Inland Revenue - they used to receive thousands of paper submissions with payroll and taxation data which then needed transcribing into their system - so many opportunities for human error! The advancements of technology allow a few buttons pushed and the information is transmitted accurately to the IRD for thousands of businesses. Those advancements were big for stopping errors and saving time and money.
Small businesses in their early stages are often time poor and don’t necessarily have all the knowledge and skills around some of these things. So using payroll systems like ours that are based in technology improves their operations and gives them more time to concentrate on other areas of their business.
Another improvement is digital record keeping - it’s much better than paper. Cloud storage and backup systems are far superior to a box in the back of your closet. Technology also facilitates better communication between employers and employees.
What was your experience of using automation? Do you feel like there is a resistance in the industry towards it?
We use a large amount of automation in our own platform which is efficient and time saving. Automation allows us to focus on other areas of growth for the business and it takes care of many smaller admin tasks and client communication.
As far as the resistance goes - I haven’t noticed it in the payroll world. I personally don’t resist it, in fact I’m an advocate for more of it. I’m pro finding ways that we can save time and use people’s skills and strengths more efficiently.
There’s of course that argument that automation replaces jobs. It’s a fair comment, but I’d also argue that since the beginning of time humans are always looking at how we can make something better, how we can improve it. Autopilot in airplanes allowed pilots to concentrate on other elements of the journey - looking ahead at weather, plotting courses for fuel efficiency, identifying any problems earlier than they would if they had to focus on flying. Or engineering, where they’d have roomfuls of engineers crunching numbers and algorithms to make a building - and now the human error in that is removed, and it can be done more safely and repeatedly. When we find ways to be more efficient it frees our minds and capabilities to look at other innovative solutions.
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