What payroll records must I keep?¶

When you pay staff, you must keep records that show what you paid and why. There are two sets of rules to follow. One comes from Fair Work (the Fair Work Ombudsman), and one comes from the ATO (the Australian Taxation Office).

The two sets of rules cover different records and have different time limits. This lesson explains what to keep and for how long.

In one line

Keep your employee records and pay slips for 7 years to meet Fair Work rules, and keep your tax and super records for 5 years to meet ATO rules.

Why this matters¶

Good records show that you paid your staff correctly and paid the right tax and super. Fair Work inspectors and the ATO can ask to see them. Keeping the right records for the right time keeps you on the safe side of the rules.

What you will learn¶

The employee records and pay slips you must keep for Fair Work
The tax and super records you must keep for the ATO
How long each set of records must be kept

Understanding the concept¶

Fair Work records. You must keep records about your employees and their pay. These include the employee's details, their pay rate and how they are paid, the hours they work, leave they take, and super contributions. You must also keep a copy of every pay slip. Fair Work requires these time and wages records to be kept for 7 years. The records must be in English, easy to read, and not changed except to fix a genuine mistake.

ATO records. You must also keep records for tax and super. These include the tax you withhold from pay (PAYG withholding, or Pay As You Go withholding), your super records, and wage records. The ATO requires most business records, including employment, payroll and super records, to be kept for 5 years. The 5 years usually starts from when you prepared the record or completed the action it relates to, whichever is later.

For accountants & bookkeepers

The two periods are separate obligations, not one combined rule. Fair Work sets a 7-year period for employee time and wages records and pay slips under the Fair Work Act. The ATO sets a 5-year period for tax and super records. Some ATO records may need to be kept longer where a period of review still applies. In practice, keeping payroll records for the longer of the two periods satisfies both.

Example¶

Sam runs a small café and pays two staff. Each pay run, Sam keeps a record of the hours worked, the pay rate, the amounts paid, the tax withheld, and the super. Sam also keeps a copy of each pay slip. Sam keeps the employee and pay-slip records for 7 years to meet Fair Work rules, and keeps the tax and super records for 5 years to meet ATO rules.

Common mistakes¶

Keeping only one set of records — Fair Work and the ATO each have their own rules.
Throwing records out too early — the periods are 7 years (Fair Work) and 5 years (ATO).
Not keeping a copy of pay slips — pay slips are part of the records you must keep.
Changing a record to hide a mistake — you may correct an error, but you must keep a note of what was fixed and why.

How this works in myaccountant¶

In the app — myaccountant keeps your payroll records for you. When you run a pay run, it records the pay, the PAYG withholding and the super, produces the pay slip, and stores the lodged Single Touch Payroll report. Your records stay together in one place so you can find them when you need them.

Key points¶

You must keep two sets of payroll records: Fair Work and ATO.
Fair Work requires employee records and pay slips to be kept for 7 years.
The ATO requires tax and super records to be kept for 5 years.
Fair Work records must be in English, easy to read, and unaltered.
Keeping records for the longer period satisfies both sets of rules.

Learn next¶

General information only — not tax, super or financial advice.

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