Payroll record-keeping¶

Running payroll creates records, and the law says you must keep them. These are the pay and wage records that show what you paid, what tax you took out, and what super the employee earned. Keeping them properly is not just good housekeeping — it is a legal obligation, and two different rules apply depending on the type of record.

This lesson is about pay and wage records. It is not about an employee's personal records such as their contract or tax file number declaration — those are covered in the Employees module.

In one line

You must keep time-and-wages records for 7 years under Fair Work rules, and tax and super records for 5 years under the ATO's rules, and the records must be accurate.

Why this matters¶

If a question ever comes up — from an employee, from Fair Work, or from the ATO — your records are the proof of what happened. Keeping accurate records protects your business and your staff, and it makes tasks like your activity statements and end-of-year work far easier. Not keeping the right records, or keeping records you know are wrong, can land a business in trouble.

What you will learn¶

The main pay and wage records you must keep
How long each type of record must be kept
Why records must be accurate and never altered improperly

Understanding the concept¶

There are a few kinds of pay and wage record to keep.

Pay records (time-and-wages records). These show the detail behind each pay — things like hours worked, the pay rate, gross and net pay, and the amounts taken out. Fair Work, the national workplace regulator, requires employers to keep these time-and-wages records for 7 years. Fair Work also says the records must be in a legible form and in English.

Pay slips. Every employee must be given a pay slip for each pay. These are part of your pay records too.

Tax and super records. These are the records behind what you report to the tax system — the wages, the PAYG amounts you withheld, the information sent through Single Touch Payroll (STP), your activity statements, and the super you paid for your employees. The ATO requires you to keep these tax and super records for 5 years. Generally the five years runs from when you prepared the record or completed the transaction it relates to.

Two rules, two periods: 7 years for time-and-wages records (Fair Work) and 5 years for tax and super records (the ATO). Because some records serve both purposes, keeping everything for the longer period is the safe, simple approach.

Whatever you keep, the records must be accurate. Fair Work is clear that records must not be altered, except to correct a genuine error, and that it is unlawful to keep records you know are false or misleading. You do not rub out and rewrite a figure to make it look right — you correct an error properly and keep the trail.

For accountants & bookkeepers

The two retention clocks run independently: Fair Work sets 7 years for employee time-and-wages records, while the ATO sets a general 5-year period for business tax and super records (with some records, such as certain super and asset records, needing to be kept longer). Where a single document supports both a Fair Work and an ATO obligation, the longer applicable period governs how long you keep it. Corrections should be made as traceable adjustments, never by overwriting the original.

Example¶

Nadia keeps digital payroll records for her three employees. For each pay she has the hours, the rate, the gross and net pay, the tax withheld and the super. She keeps the pay slips she issued and the STP information sent for each pay, plus her activity statements. When one employee later queries a pay from eighteen months ago, Nadia opens the record and confirms the figures on the spot. She never edits an old record to "tidy it up" — if something was wrong, she corrects it as a proper adjustment so the history stays intact.

Common mistakes¶

Throwing records out too early — the longest applicable period, 7 years for time-and-wages records, is longer than many people expect.
Assuming one retention period covers everything — tax and super records are 5 years, but time-and-wages records are 7.
Editing or overwriting an old record to make it look correct, instead of making a traceable correction.
Keeping records in a form that is hard to read or not in English.

How this works in myaccountant¶

In the app — the pay and wage records from each pay run are stored for you: the pay details, the pay slips you issued, the STP information lodged, and the super and activity statement figures. Because they are kept in the app, you can look back at past pays and reports without keeping a separate paper file. Corrections are made through the app rather than by overwriting the original figures.

Key points¶

Employers must keep pay and wage records — pay records, pay slips, and STP and super records.
Fair Work requires time-and-wages records to be kept for 7 years.
The ATO requires tax and super records to be kept for 5 years.
Because some records serve both, keeping everything for the longer period is safest.
Records must be accurate, legible, in English, and not improperly altered.
Correct a genuine error properly — never overwrite a record to hide a mistake.

Learn next¶

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

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