Bookkeeping doing payroll tasks on computer
thought leadership

The value of payroll knowledge

Nov 2020

EzyPay is a New Zealand based payroll bureau that’s been running since 2000. With 5 employees and over 200 clients, EzyPay focuses on providing compliant payroll outsourcing services so their clients can free up time and stress. We spoke with Justin Ryan, Managing Director of EzyPay, about NZ payroll, the importance of payroll knowledge and the benefits of outsourcing payroll rather than managing it in-house.


What do you value in a payroll system?

We use a commercial system that’s been heavily modified for bureau use. We struggled to find a system years ago but we worked with a developer to create a phenomenal piece of software that does everything we need it to do. It provides automation and multiple capabilities for timesheet input, and has eliminated all paper timesheets.


What are the main issues with NZ payroll?

The DIY attitude. Employers think they can do payroll themselves but they often don’t have the skills to do it. The uptake of bureau services in NZ is very low compared to Australia and the UK. When it comes to payroll, the software is about 10% of the equation; 90% is knowledge of the Act. Payroll people seem to get the least amount of training even though they’re handling the most important aspect of the business. 

David Jenkins of the NZPPA has been raising the profile of payroll in NZ organisations and providing training. I have a lot of respect for him.

In my opinion, the many horror stories we hear in the media around holiday pay errors are a result of tracking and paying annual leave in hours. The Holidays Act stipulates weeks, and although MBIE says it is fine to represent that in hours or days, this must be tied back to weeks somehow. Calculating by the hour is too granular and virtually impossible to get right if the employees work variable hours/days, yet many payroll systems only allow accruals by hours.


What is important in software for ensuring compliance?

Calculation transparency. We’ve just taken a client through an audit and looked at their data, and MBIE were happy with our calculations. It’s important to have calculation transparency in your payroll software so that you can check results, and when you’re queried on how you got to that result, you can explain easily. Clients often ask how we got to the value and we can always show them. All MBIE wants is justification for your calculations. They want to ensure staff are being paid fairly; they’re not out to get you.


What value does a bureau bring?

Knowledge. It’s an intangible asset. We’re not the ambulance at the bottom of the cliff; we’re the gate at the top of the cliff stopping people falling. You need the knowledge behind the software. The beauty of bureau is you have knowledge across industries from working with so many clients. There’s also the knowledge base from working in a team of payroll professionals - something you wouldn’t get being the payroll person in-house.


Why is having payroll knowledge so important in NZ?

I’m not saying a payroll software can’t get calculations right. But the user of a payroll software must understand what the software is doing and the consequence of their actions. No payroll software should say it’s 100% compliant unless it knows the operator running it.

There are 2 types of people: those who want to know which button to push in a payroll software, and those who want to know why they have to push that button. Those who ask ‘why’ are the ones made for payroll. Button pushers aren’t. You need a problem solver; someone who can see when things aren’t right and fix them. 


Tell us about your team

My team is young, curious and hungry for knowledge. Some have years’ of payroll experience, but some of the younger ones had no prior experience of payroll until joining. But they’re extremely smart, they learn quickly and always ask why. Sometimes people with experience can have pre-existing ideas; they won’t be innovative. My mindset is all around cutting redundant processes. I’m always thinking about ways to reduce steps in a process and make things easier. We’re all encouraged to question everything at EzyPay. It’s fine to make mistakes; it’s all part of learning. And then you won’t make that mistake again.

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