Payroll Record-Keeping Obligations: What Australian Employers Must Keep and for How Long

In the event of a Fair Work audit or an underpayment dispute, your employment records are your primary defence. Without them, you have no way to demonstrate compliance — and the Fair Work Act places the burden of proof squarely on employers to show they have met their obligations.

This guide covers exactly what payroll records you must keep, for how long, and what format they must be in.

The Legal Basis for Record-Keeping

Your record-keeping obligations flow from the Fair Work Act 2009 and the Fair Work Regulations 2009. These set out the minimum records you must maintain and the consequences for non-compliance. Additional record-keeping requirements apply under:

• The Income Tax Assessment Act (for ATO purposes)
• State long service leave legislation
• Workers' compensation legislation
• Superannuation legislation

What Records You Must Keep

Employment Details

For every employee, you must record:

• Employer information: Your name, ABN, and address
• Employee name
• Australian Business Number (if any) of the employee
• Employment commencement date
• Employment type: Full-time, part-time, or casual
• Whether they work at different locations (if applicable)

Pay Records

For each pay period, you must record:

• Rate of pay — the rate at which the employee was paid
• Amount paid — the gross and net amount paid in each pay period
• Hours worked — for employees who are paid by the hour, the number of hours worked in each pay period
• Penalty rates — if penalty rates applied, the number of hours worked at each rate
• Overtime — hours worked as overtime and the amount of overtime pay
• Allowances — any allowances paid and the reason for them
• Bonuses and commissions — if paid, the amount
• Deductions — any amounts deducted from pay, the reason, and the amount
• Pay period — the beginning and end dates of each pay period

Leave Records

• Annual leave — the amount accrued and the amount taken in each period
• Personal/carer's leave — the amount accrued and taken
• Any other leave taken

Note: For family and domestic violence leave, you must keep records but must not record the reason for the leave in a way that could be accessed by others and compromise the employee's safety.

Award or Agreement Classification

If an employee is covered by a modern award or enterprise agreement, you must record:

• The name of the award or agreement
• The employee's classification under the award or agreement

Superannuation Records

• The amount of superannuation contributions made in each period
• The date and method of contribution
• The name of the fund the contribution was paid to

Individual Flexibility Arrangements

If you have an Individual Flexibility Arrangement (IFA) with an employee under a modern award, a copy of that arrangement must be kept.

Pay Slips: What They Must Include

You must issue a pay slip to each employee within 1 working day of paying their wages. Pay slips must be in writing (electronic pay slips are acceptable) and include:

• Employer's name and ABN
• Employee's name
• Date of payment
• The pay period
• Gross pay
• Net pay
• Any deductions (itemised by description and amount)
• Any allowances (itemised)
• Superannuation contributions (the name of the fund and the amount)
• If the employee is paid at an hourly rate: the hourly rate and number of hours worked
• If the employee is paid a salary: the salary amount
• Any bonuses, commissions, or other payments

Pay slips do not need to include the employee's address or bank account number, but they must be legible and accessible to the employee.

How Long Must You Keep Records?

Employment records must be kept for 7 years from the date the record was made (or from the end of the relevant period). This includes:

• Records of former employees (not just current)
• Records that relate to periods more than 7 years ago cannot be destroyed while a claim is pending

For tax purposes, the ATO requires business records (including payroll records) to be kept for 5 years from when you prepared or obtained the records, or completed the transactions they relate to.

The longer 7-year Fair Work period takes precedence where both apply.

Format and Accessibility

Employment records must be:

• In writing or electronic form
• In English — or in a language other than English if the record is accompanied by an English translation
• Legible and accessible to a Fair Work Inspector without unreasonable delay

If you use payroll software, ensure your records can be exported and produced for an inspector when required. Software that stores records in a format that cannot easily be exported may create practical problems during an inspection.

Records must be kept in a place accessible in Australia — records stored solely offshore may not be accessible to an inspector.

Protected Records and Confidentiality

Employment records are confidential. You must not permit access to employment records by people other than:

• The employee (who has the right to access their own records)
• A person authorised by the employee
• A Fair Work Inspector
• A court or tribunal

You cannot share an employee's employment records with third parties (including other employees) without the employee's consent, unless required by law.

Penalties for Non-Compliance

Failing to keep accurate employment records — or failing to produce them when required — carries specific penalties under the Fair Work Act:

• Failure to make or keep employment records: Up to $19,800 (individual) / $99,000 (corporation) per contravention
• Failure to issue a pay slip: Up to $19,800 (individual) / $99,000 (corporation) per pay slip
• Failure to produce records to an inspector: Same penalty scale

Each employee and each pay period can constitute a separate contravention. A business with 10 employees that fails to keep records for 6 months can face liability for hundreds of individual contraventions.

Additionally, where an employer cannot produce records, the courts may use a reverse onus approach — effectively requiring the employer to disprove the employee's claim about their entitlements. Without records, you cannot do this.

Common Record-Keeping Mistakes

1. Not Keeping Timesheets for Salaried Employees

Many employers assume that if an employee is on an annual salary, they don't need to track hours. This is incorrect where:

• The employee is covered by a modern award (most professional and administrative roles are)
• The employee's annualised salary requires an annual reconciliation against actual hours
• Overtime claims or entitlement disputes arise

2. Using Rounding in Time Recording

Rounding time (e.g., to the nearest 15 minutes) can be acceptable in some circumstances but can also result in systematic underpayment. If you use rounding, ensure it does not always favour the employer.

3. Not Keeping Records for Former Employees

Your 7-year obligation covers the period from the end of employment — not from when the employee is currently employed. Former employee records are frequently not kept, resulting in liability if a claim is lodged years after the employment ended.

4. Inadequate Pay Slip Information

Pay slips that omit superannuation details, allowances, or leave accruals are non-compliant — even if they are otherwise accurate for the gross/net pay amount.

5. Paper-Only Records That Are Lost or Damaged

Physical records that are destroyed by fire, flood, or poor storage create serious problems. Consider digitising critical records and maintaining secure backups.

How Reguladar Helps

Record-keeping obligations are the foundation of all employment compliance — without them, you cannot demonstrate compliance in any other area. Reguladar surfaces the specific record-keeping requirements that apply to your business type and workforce, and helps you understand what documentation you need to maintain and for how long.

Rather than looking up the Fair Work Regulations each time a question arises, you have a personalised dashboard that tells you exactly what obligations apply to your business.

Get your employment records in order. Start your free compliance check at Reguladar and understand your complete employment law obligations today.