Could a four-day work week be the boost your business is looking for?
31 March 2023
The idea of a four-day work week has been thrown around for a number of years, but how do the figures stack up?
A recent pilot involving 30 companies and almost 1,000 employees in businesses in Australia, Ireland, and the US found that the four-day work week is a winner. Companies rated the four-day work week trial a 9 out of 10, expressing extreme satisfaction with their overall productivity and performance. Employees also rated the pilot highly, with 97% saying they want to continue on a four-day week.
Despite employees working only four days, the companies involved saw a 38% increase in revenue year-on-year, despite no reduction in pay for employees. Every single business involved in the trial is sticking with the four-day week, and employees loved their day off so much that most said they would need a significant pay rise to go back to working five days.
Maybe it’s time to think about whether it could work at your business. It could be just the thing you need to attract good talent – which has been in short supply in New Zealand lately.
The advantages of the four-day week are:
- It improves staff morale, wellbeing, and retention.
- It can cut overheads by up to 20%.
- Productivity is likely to remain at 100%; some studies show an increase.
- It’s easier to recruit new team members.
- Emissions created by commuting will be reduced.
The disadvantages of the four-day week:
- Your total revenue may suffer.
- It simply won’t work for many businesses, particularly those focused on customer service.
- You’ll have to decide whether to limit your operating hours or try to manage workers’ schedules and workloads to allow a four-day work week to succeed.
- There are no long-term studies of the positive effects on staff morale – there are some indications that it may fall back to the baseline over time.
- Squeezing more into four days of work could prove stressful for you and your team.
We can help you run the numbers
If you’re considering a four-day week, or another flexible arrangement, we can help. It’s useful to identify your least profitable days, for instance, if you plan to simply shut up shop for one weekday. Or we can help you work out optimal staffing requirements based on revenue streams.
Our team can work with you to do a cost-benefit analysis of what a four-day work week might look like for your business, discuss how you can change the way your business operates – and help you reap the rewards.
Managing payroll can sometimes feel like navigating a maze; complex regulations, tight deadlines, and countless calculations can easily overwhelm business owners. However, with the right strategies and tools, payroll can be streamlined into a smooth and efficient process. Here’s how you can simplify your payroll process while ensuring full compliance. Embrace Technology Choose the Right Payroll Software Investing in good payroll software is one of the best steps you can take. Look for features that automate calculations, tax submissions, and generate detailed reports. Many software options now offer cloud-based solutions, providing the flexibility to manage payroll anytime and anywhere. Stay Informed on Compliance Know the Laws It’s crucial to stay updated on federal, state, and local labor laws, as these often change. Non-compliance can lead to penalties, so consider subscribing to industry newsletters or updates from trusted legal resources. Record Keeping Maintain meticulous records of employee hours, wages, and payroll taxes. Proper documentation safeguards you from legal troubles and helps resolve any discrepancies promptly. Set a Consistent Payroll Schedule Consistency is key in payroll processing. Choose a payroll frequency that suits your business - whether it’s weekly, bi-weekly, or monthly - and stick to it. This creates predictability for both you and your employees, allowing better financial planning and cash flow management. Automate Tax Calculations Manual tax calculations are prone to errors. Automating tax withholdings through your payroll software ensures accuracy and compliance with the latest tax rates and contributions. This reduces the likelihood of costly mistakes and late penalties. Regularly Audit Your Payroll Process Conduct internal audits periodically to identify errors and inefficiencies in your payroll process. This proactive approach helps catch and remedy issues before they escalate, ensuring your business remains compliant and efficient. Consider Outsourcing If payroll complexities feel overwhelming, consider outsourcing. This allows you to focus on your core business activities while ensuring that payroll is handled by experts who stay abreast of ever-changing regulations and compliance requirements. If payroll continues to be a challenge, our team of experienced accountants is here to help. We offer comprehensive payroll solutions tailored to fit the needs of small and medium businesses, ensuring compliance and efficiency at every step. Contact us today to learn more about how we can support your payroll processing needs.
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As an employer, there are several obligations and expectations set by the Inland Revenue Department (IRD) that you must adhere to. Understanding these requirements is essential for maintaining compliance and avoiding any potential penalties. Let's take a closer look at what the IRD expects from you as an employer. Register as an Employer Before you hire your first employee, you are required to register as an employer with the IRD. This is a crucial first step in ensuring that you can meet all tax and payroll obligations. Accurate Record Keeping The IRD requires you to keep accurate and detailed records of all employment-related transactions. This includes: Employee personal details Wages and salary paid Payroll dates and methods PAYE deductions and remittances Details of benefits or allowances provided to employees Maintaining proper records helps ensure that you are reporting and remitting the correct amounts to the IRD. Deduct PAYE Tax You are responsible for deducting PAYE (Pay As You Earn) tax from your employees' pay. This involves calculating the correct amount of PAYE and ensuring it is deducted from each employee's salary or wages before their net pay is provided. Pay Employer Contributions In addition to PAYE, you may also be responsible for contributing to your employees' social security and retirement benefits, depending on the country you operate in. These contributions are typically paid in conjunction with PAYE tax. Issue Statements and Forms At the end of the tax year or upon employment termination, you should provide each employee with a statement showing their total earnings and PAYE deductions. Additionally, filing the appropriate end-of-year PAYE schedules with the IRD is required. File Employer Returns Employers are required to file regular returns with the IRD, which could be monthly, quarterly, or annually, depending on specific regulations. These returns should accurately report all payroll activities, including PAYE deductions. Handle Tax Codes and Changes It's crucial to apply the correct tax codes for each employee's circumstances. Any changes in employment status or tax code must be updated promptly to ensure accurate tax withholdings. Comply with Audit Requests The IRD may audit your business to ensure compliance with employer obligations. As such, being prepared to provide all requested information and records in a timely manner is vital. Adhering to these expectations from the IRD is not just about compliance; it's about fostering a transparent and trustworthy relationship with your employees and the tax authorities. If you need assistance with understanding or managing your obligations as an employer, consider reaching out to a professional accountant. Our team is here to help you navigate these responsibilities seamlessly, ensuring peace of mind and allowing you to focus on growing your business. Feel free to contact us for further information or assistance.
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